Property investments along coastal towns such as Mombasa, Malindi and Lamu generate substantial yields on return on investments. The real-estate market in these towns is on an upward trend with property appreciation rates and growth rates increasing steadily. Reports indicate that by 2012, Kenyan coastal towns registered the highest growth globally with 20% growth increase, overtaking international popular coastal cities such as Miami.
The process of buying property in the coastal town of Mombasa is similar to buying property elsewhere in Kenya. However, property purchases in Mombasa are an intricate affair given the fact that majority of property in this city does not have title deeds.
It is in the background of this that the majority of property transactions are done either by using mother titles or based on gentleman’s agreements, which are often marred with under-handedness, fraud and double sale or purchase of property, leaving the majority of properties with endless court cases.
Steps Guiding the Purchase of a maisonette in Mombasa
It is important for you as a potential buyer to purchase a maisonette with an individual title deed other than relying on gentleman agreements to authenticate your purchase and ownership.
1.) Contract a real-estate agent (commission of 5.51%).
- Although the same commission is charged here by real estate agents as in other parts of Kenya, you are likely to dig deeper to pay for additional searching and viewing fees that cost approximately Ksh3,500 and Ksh1,500 respectively.
- Real-estate agents are crucial in searching for a suitable maisonette that meets your needs and expectations. They have ample knowledge about important aspects of a property, such as the security of the area, property ownership and costs of the various available maisonettes for sale.
- Agents can assist through conveyancing- (provision of in-house legal services) and they can help link you up with suitable mortgage lenders, to finance your purchase.
- Agent fees are payable when the signature of sale is made.
2.) Hire a real-state lawyer (rate of 1.5%).
- Purchasing a massionate in Mombasa should be facilitated by a lawyer to help in property acquisition.
- After you have identified a suitable maisonette and you have met with the seller and agreed to transact, your lawyer will first conduct a title check at the lands registry located in Mombasa town at a cost of Ksh500 to ensure the massionate is registered.
3.) Pay deposit (10 – 30%)
If the property is registered, the lawyer will draft a conditional, preliminary contract duly signed and executed by both parties, upon which you will have to pay refundable 10-30% deposit of purchase price.
*Please ensure that both parties are in agreement about how the property will be financed
4.) 90 Day Transaction Period
Once the deposit has been paid, the transaction process begins which takes about 90 days after the parties sign the preliminary contract. Within this period:
- The vendor must find all the required clearances from the city council of Mombasa, such as rates and land-rent clearance certificates (Ksh7,500) and consent transfer to ensure all local levies and utility bills are cleared before transfer of property ownership.
- Your lawyer must then prepare a draft transfer costing 4% flat rate at the Mombasa Lands office and obtain a stamp duty for the same.
- A Ministry of Lands official will then inspect and verify the maisonette while ascertaining the sale price is aligned with its actual value.
- Your lawyer then finalizes registration of property transfer
5.) Close The Deal
Upon registration of property transfer, you can then settle the payment balance with the seller and, 30 days later, you can settle pending legal fees and taxes.
Note: For those outside Kenya, they can use their preferred lawyer to purchase a maisonette in Mombasa through Power of Attorney.
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