Conversion and Sectional Titles

In Kenya, conversion and sectional titling are legal processes governed by the Sectional Properties Act, 2020, which facilitates the subdivision of buildings into units for individual ownership, along with shared ownership of common areas. This enables the issuance of separate titles for individual units (such as apartments or offices) within a building, while the land on which the property stands remains jointly owned. Below is a detailed explanation of the process:

1. Preliminary Steps: Feasibility and Compliance

Before initiating the process, the property owner(s) must ensure the following:

• Building Compliance: The building complies with local zoning laws, building codes, and regulations.
• Existing Title: The property must have a valid and unencumbered title deed. The title may be freehold or leasehold, with a lease term of at least 21 years remaining.
• Professional Team: Engage professionals such as a land surveyor, architect, and lawyer experienced in sectional titling.

2. Preparation of a Sectional Plan

A sectional plan is a crucial document that illustrates how the property is subdivided into units and common areas. The process involves:

• Surveying the Property: A licensed surveyor prepares a detailed plan that defines each unit's boundaries, floor areas, and the shared areas.
• Architectural Drawings: These show the design and layout of the building.
• Approval: The sectional plan must be approved by the Director of Surveys and comply with the Survey Act.

3. Registration of the Sectional Plan

Once approved, the sectional plan is registered at the Land Registry. Key steps include:

• Submitting the sectional plan alongside the original title deed.
• The Registrar cancels the original title and issues a Sectional Property Register for each unit, including the mother title for common property.

4. Issuance of Unit Titles

• Unit Titles: Separate titles are issued for each unit, making them legally independent properties.
• Common Areas: Ownership of common areas (e.g., staircases, lobbies, parking) is proportionately shared among unit owners, as detailed in the sectional plan.

5. Creation of a Management Corporation

A management corporation is automatically established upon registration of the sectional plan. It handles:

• Governance: Enforcing by-laws and managing the property.
• Maintenance: Maintaining common areas and amenities.
• Contributions: Collecting service charges from unit owners.

6. Subdivision of an Existing Title (Conversion Process)

If an existing development needs conversion to sectional titles:

• Application for Conversion: Property owners apply to convert the existing title under the Sectional Properties Act.
• Retrospective Compliance: The building may need adjustments to comply with sectional titling requirements (e.g., access to utilities, fire safety).
• Submission of Documents: Include the sectional plan, original title, and consents from mortgagees or other interested parties.

7. Tax and Financial Implications

• Stamp Duty: Payable on transfer of unit titles, typically borne by purchasers.
• Service Charges: Unit owners must pay for the management and maintenance of shared areas.

8. Final Steps

Once all unit titles are issued:

• Sales or Transfers: Units can be sold, mortgaged, or transferred individually.
• Registration of Owners: New owners are registered in the Land Registry.

Challenges and Practical Considerations

• Disputes Among Owners: Coordination among multiple owners can be challenging.
• Compliance Costs: Conversion may require additional investments to meet legal requirements.
• Professional Fees: Surveyors, architects, and legal counsel must be compensated.

By following these steps under the Sectional Properties Act, 2020, property owners can legally convert and issue sectional titles, unlocking the potential for enhanced property rights, better management, and improved marketability.