Sectional Properties Registration in Kenya: What Developers and Homeowners Must Know

Sectional properties (commonly “sectional titles” or “strata”) are now a mainstream instrument in Kenya’s urban growth story: they let developers convert apartment blocks and mixed-use buildings into individually-titled units with shared common property and a mandatory management regime. The 2020 Sectional Properties Act modernised the field, rewired ownership rights, and created a registration pathway that lenders, buyers and planners must respect. We dive into the law, the registration mechanics, the commercial upside, governance traps, financing implications, and five bold moves developers and counties should adopt now to turn sectionalization into predictable value.

What exactly is a sectional property (and why the fuss?)

A sectional property divides a building into discrete units (apartments, offices, retail pods) that individual owners can own outright (title or lease), while common property (lobbies, stairwells, shafts, external walls, services) is owned jointly by the unit owners. The regime clarifies boundaries, unit factors (shares in common property), and creates a statutory corporation to manage common property, levies and maintenance. The 2020 Act replaced the older law and expanded modern protections and registration pathways.

Why care? because sectional titles turn previously illiquid “apartment under a mother title” situations into individual tradable assets that are easier to mortgage, inherit, and sell — but only if the sectional plan and corporation are properly registered and governed.

Stacked Ownership — Modern Nairobi Apartment with Balconies and Shared Court Inside

The law that matters (short list — read these first)

• Sectional Properties Act, No. 21 of 2020 — establishes sectional plans, unit registers, corporations, by-laws and the conversion rules. It is the primary statute.

• Sectional Properties Regulations (2021) — practical forms, filing steps (e.g., Form LRA 9, SP forms), and the registration mechanics in the Lands Registry.

• Land Registration Act (2012) & Land Registration (General) Regulations — interact with sectional registration (unit registers, certificates of lease/title).

• Survey Act & Survey Regulations — sectional plans must be georeferenced and signed/endorsed by Survey of Kenya; survey sequencing rules apply.

  
  

Load-bearing legal facts you must not ignore: the Act applies to freehold and to leasehold parcels with sufficient unexpired term (the new law lowered thresholds compared with the old Act), the Registrar opens Unit Registers and issues unit titles/certificates, and the Regulations prescribe specific forms and corporation registration steps.

The practical registration flow (the step-by-step reality)

1. Get the building plans in order — sectional plans derive from approved building plans (county approvals must exist). Prepare the building-level drawings that define unit boundaries and finishes.

2. Commission a georeferenced sectional plan — licensed surveyor draws a sectional plan that includes unit numbers, approximate floor area, parcel references and unit factors; the Ministry’s guidance requires geo-referencing and Director of Survey sign-off.

3. Prepare corporation documents — the Regulations require an application to register the corporation that will manage common property (Forms SP 7, SP 8 etc.). The Registrar registers the sectional plan and opens Unit Registers.

4. Submit via ArdhiSasa / Lands Registry — the practical submission is now digital in many cases; the ArdhiSasa portal has step tutorials for sectional plan applications.

5. Registrar issues unit title certificates / leases — upon registration the parcel register is closed and Unit Registers plus certificates (Form SP 13/SP 14) are issued for each unit.

6. Handover & consumer protection — developers must not sell units claiming titles that don’t yet legally exist; the Act and guidance prohibit transfers before registration.

   
   

Why sectional registration is a commercial game-changer (the upside)

• Mortgageability & liquidity: Lenders prefer single-unit collateral with clear boundaries and unit title certificates—this expands mortgage markets for apartments and SMEs in co-owned buildings.

• Clearer consumer protections: buyers get individual title/lease and statutory by-laws — fewer disputes about who owns what and better legal recourse.

• Developer reputational arbitrage: compliant developments sell faster and with better resale values; non-compliant “mother title” apartments create post-sale friction.

• Efficient management funding: statutory corporations can levy unit owners, maintain sinking funds and enforce rules — keeping buildings safer and values intact.

  
  

Hard, often-overlooked technical & governance realities (where deals fail)

1. Sequencing & geo-referencing — the Survey Regulations and Ministry notices are strict: sectional plans must be geo-referenced, carry parcel numbers and floor areas and be signed by the Director of Survey. Skip this and the Lands Registry will reject the application.

2. Conversion of long-term leases — many pre-existing apartment projects were sold as long-term leases under a single mother title. The new regime requires conversion/registration of qualifying long-term leases into sectional units within statutory windows (there are timelines and transition rules in the Act and Regulations) — developers and owners who ignore conversion face legal uncertainty.

3. Corporation vs Company tension — the Act creates a statutory corporation (not a company) to manage common property; default by-laws are set out in the Regulations, and developers must ensure handover governance mechanisms (reserves, management agreements, transfer of control). Mis-managed handovers create costly disputes.

4. Tax & stamp duty nuances — the conversion of long-term leases and issuance of unit titles interacts with stamp duty and transfer tax rules; practice notes suggest scenarios where additional duty may not be charged if duty was already paid on original instruments — but you must check specific treasury/notices and get tax advice per project. (Legal opinions vary — don’t assume.)

5. Selling before registration = legal risk — the Act and practice guidance prohibit piecemeal sales that leave buyers without unit certificates. Developers who market units pre-registration must use robust escrow, clear buyer disclosure and time-bound contracts.

   
   

Financing & bankability — what lenders will ask for

Lenders will want a lender-grade package that includes:

• Registered sectional plan (or clear timeline & escrow if in conversion).

• Unit title certificates or confirmed date for issuance.

• Developer’s compliance certificates, proof of fully paid statutory dues, and no-encumbrance certificates on common property.

• Management corporation constitution/by-laws and sinking-fund projections.

• Physical defects liability & performance guarantees for structural/warranty risks.

Insight: Developers who package the plan + management agreement + a funded sinking account close faster and secure lower loan conditionalities.

Governance design — make it bulletproof before handover

• Default by-laws are the starting point (Regulations include first registration by-laws). But good developers draft improved by-laws that protect minority owners, define reserve-fund rules, set clear enforcement and dispute resolution, and regulate short-term lets.

• Transparent handover timeline — handover milestones (e.g., practical completion, final inspection, register opening) should be contractually linked to any developer control of the corporation.

• Reserve & sinking fund rules — build a 3–6% annual capex forecast into levies and seed the reserve at handover to avoid early special assessments.

• PropTech for management — online ledgers, e-collections and digital access control reduce leakages and increase compliance (think: mandatory e-levy collection on the platform). This is a provable value add for buyers and lenders.

  
  

Risks & how to neutralize them (developer playbook)

• Risk: Rejection for non-georeferenced plan. → Fix: insist on a Survey-of-Kenya pre-endorsement checklist and get Director sign-off before submission.

• Risk: Long-term lease conversion lapses. → Fix: audit all pre-existing leases immediately; convert eligible leases with an urgent plan (Regulation timelines are strict).

• Risk: Buyers’ distrust because unit titles not immediate. → Fix: escrow arrangement + staged title issuance plan + transparent portal updates.

• Risk: Post-handover disputes over common property. → Fix: clear by-laws, initial reserve fund, and a documented handover package including certified works and utility acceptance certificates.

  
  

Five bold moves (outside-the-box) that will set you apart

1. Publish a public “unit data room” at pre-sales — geo-tagged sectional plan, expected certificate issuance date, bankable management agreement and reserve-fund plan. Transparency reduces purchase friction.

2. Offer lender-ready packs for each unit (title/lease certificate, survey extract, compliance certificate) to encourage mortgage take-up at secondary market stage.

3. Design for mixed-use micro-markets — allow flexible unit-use overlays (home office/mini retail) anticipating hybrid work and ground floor retail demand; ensure by-laws have clear short-let rules.

4. Seed a technology-enabled management platform at launch — levy collections, complaint logging, maintenance scheduling and reporting — buyers will pay a premium for predictable building services.

5. Partner with TVETs & micro-contractors for building upkeep and local employment: lower operating costs, increase community buy-in and add social value to the asset.

   
   

Checklist for developers (quick, printable)

•  Confirm land tenure (freehold/leasehold + unexpired term ≥ statutory threshold).

•  Obtain approved building plans from County.

•  Commission georeferenced sectional plan (Surveyor + Director sign-off).

•  Prepare corporation documents and draft by-laws (Regulation SP forms).

•  Lodge application on ArdhiSasa / Lands Registry with required forms (LRA9, SP7 etc.).

•  Ensure no pre-sale without escrow and clear buyer disclosure.

•  Seed sinking fund & publish management plan at handover.

Sectionalization is not a legal formality — it’s a market design decision. Developers who master the Act, the Regulations, geo-referencing discipline and transparent handover governance will capture faster sales, lower financing costs and better secondary market liquidity. Those who treat sectional registration as a checkbox will be the ones caught in conversion backlogs, buyer disputes and lender friction.