Description

Conveyancing

1. Fred Sitati has recently developed a 24 flats’ apartment block in Donholm in Nairobi. The flats had been advertised for sale off plan and are virtually at foundation stage. The Project Architects have not issued the requisite construction completion documents.

The title pertaining to the land upon which the apartment block will rest is a 99-year lease registered pursuant to the provisions of the Registration of Titles Act, Cap 281 of the Laws of Kenya. (Now Repealed). The residue of the leasehold term is 85 years, the Government of Kenya having issued the head lease title with effect from 1st January, 2000. The Certificate of Title is registered in the name of Developers Limited. The principal shareholders of this Company are Fred Sitati and Rhoda Mwikali. The same parties are also listed at the Registry of Companies as the Directors of the company.

SME Foundation, a Non-Governmental Organization registered under The Non-Governmental Organizations Act has agreed to purchase the entire apartment block to house its staff most of whom are working in the Donholm area with small and medium start-up businesses.

Fred borrowed Kshs.200,000/- from Mortgages Centre Limited to purchase the land and finance part of the construction costs. In order to raise more construction capital Fred has decided to dispose off his five properties namely Nairobi/Waithaka/BIock15 a Title Deed, Mombasa Municipality/Changamwe,’Block118/4 a Certificate of Lease, a Conveyance L.R 209/188845 for land in Lavington Nairobi, an assignment for Land in Ngara Nairobi, and C.R. Number 990123 registered in the name of Rhoda Mwikali (Fred’s wife).

You have recently been sworn to the roll of Advocates of the High Court of Kenya and are working in the law firm of MMH & Mwaura Advocates and have been tasked by the conveyancing partner with handling Fred’s transactions. SME Foundation has also instructed the same firm. The foundation is ready to pay the entire purchase sums from funds solicited from The Youth Fund USA, a foreign development partner who had donated USD 3.5million to fund SME activities. You are privy to this information and also the fact that SME Foundation is ready to pay 70% of the consideration immediately after contract signing.

(a) What transfer instruments will you draw on behalf of SME Foundation and at which Lands registry will these documents be registered?

(5 Marks) (b) SME Foundation has agreed to pay  for each flat but is concerned about the level of workmanship by the inexperienced contractor that Developers Limited has contracted. SME Foundation therefore requests that the Agreement for Sale bind the vendor strictly for all latent and patent defects discovered after hand-over of the units for at least one year. Developers Limited has no objection to the incorporation of this proposal in the Agreement for Sale. What documents must be availed at contract completion to give effect to this covenant? Which parties are liable to issue these documents and why?

(5 Marks)

(c) You are also representing the purchasers of the five other properties listed herein. The purchasers need to be advised from the very onset how the firm will handle their transactions and which Registrars Will issue their titles. All Of them are concerned that as a newly admitted advocate you may not fully understand how to ensure they ensure they get proper titles. List the transfers that you will prepare and which Registrars will register the same.

(5 Marks)