Off-Plan Property Buyer Guide in Kenya

Buying off-plan property can be a good investment, especially where the project is well planned, properly approved and managed by a credible developer. It can allow a buyer to secure a unit early, pay gradually and benefit from possible appreciation once the development is complete.

But off-plan property carries a special risk: the buyer is paying before the unit is fully built.

That means the buyer is not only buying land, walls and finishes. The buyer is buying into a promise. That promise must be supported by proper land ownership, approvals, developer capacity, a strong sale agreement, safe payment terms and a clear transfer process.

Off-plan property means buying a house, apartment, maisonette, townhouse or commercial unit before construction is complete. Sometimes construction has already started. In other cases, the buyer is committing money when the project is still at the planning or early approval stage.

This is why the first question should not be “how much is the unit?” The better question is: what exactly am I buying, and how will it legally become mine?

• ✓Confirm the exact unit being purchased.
• ✓Confirm the size and layout of the unit.
• ✓Confirm the floor, block or house number.
• ✓Confirm whether parking is included.
• ✓Confirm whether common areas are clearly identified.
• ✓Confirm what ownership document will be issued after completion.

Every off-plan development sits on land. If the land has a problem, the entire investment may be exposed.

A buyer should confirm who owns the land and whether the developer has legal authority to sell units. If the developer is not the registered owner, the buyer must understand the arrangement between the developer and the landowner.

This may involve a joint venture, development agreement, sale agreement or another structure. It should never be assumed.

• ✓Confirm who owns the land.
• ✓Confirm whether the title matches the project location.
• ✓Check whether the land is charged to a bank.
• ✓Check whether there are cautions, restrictions or disputes.
• ✓Check whether there are unpaid rates or land rent issues.
• ✓Confirm whether the developer has authority to sell the units.

A good project requires more than attractive brochures and sales presentations. The developer should have the legal authority, financial ability and practical capacity to complete the project.

Many buyers rely on advertisements, site visits and sales representatives. That is not enough. The buyer should know who is behind the project and whether they have a record of completing similar developments.

• ✓Confirm whether the developer is a registered company or individual.
• ✓Confirm the directors or promoters behind the project.
• ✓Check whether the developer has completed other projects.
• ✓Check whether there are known complaints or disputes.
• ✓Confirm whether the project is funded by buyer deposits, bank financing or private capital.
• ✓Confirm whether the contractor is properly identified.

A project should not only look attractive on paper. It should be supported by the necessary approvals.

Buyers should ask whether the development has county approvals, approved architectural plans, relevant construction permits, NCA project registration and NEMA approval where applicable. What is marketed to buyers should match what has been approved.

• ✓Request county-approved architectural plans.
• ✓Confirm development permission.
• ✓Confirm construction approvals or permits.
• ✓Confirm NCA project registration where applicable.
• ✓Confirm NEMA approval or EIA licensing where required.
• ✓Confirm road access, water, drainage, sewer and utility arrangements.
• ✓Confirm whether the approved plans match the brochure and floor plans.

In an off-plan transaction, the sale agreement should not be treated as a standard formality. It is the document that determines what the buyer is purchasing, when the developer should complete, when payments are due and what happens if the project delays or fails.

A weak agreement can leave the buyer exposed even where the project looked attractive at the beginning.

• ✓Confirm the purchase price.
• ✓Confirm the payment schedule.
• ✓Confirm the completion date.
• ✓Confirm construction milestones.
• ✓Confirm refund rights.
• ✓Confirm consequences of delay.
• ✓Confirm the defect liability period.
• ✓Confirm handover documents.
• ✓Confirm whether the developer can change design, size or finishes.
• ✓Confirm the dispute resolution process.
• ✓Confirm developer default and buyer default clauses.

A developer may ask for a booking fee, deposit and instalments before completion. The buyer should understand what each payment means and whether it is protected.

A payment plan only tells you when to pay. It does not tell you what happens if the project delays, fails or changes.

• ✓Confirm whether the booking fee is refundable.
• ✓Confirm when the deposit becomes non-refundable.
• ✓Confirm whether payments are linked to construction milestones.
• ✓Confirm where the money will be paid.
• ✓Confirm whether payment is going to a developer account, advocate-client account or personal account.
• ✓Confirm whether receipts will be issued.
• ✓Confirm what happens if construction stalls after payment.
• ✓Confirm whether the buyer can suspend payment if the developer defaults.

A buyer must understand how the unit will eventually be registered and transferred. For apartments and multi-unit developments, the buyer should know whether the final ownership will be through sectional title, certificate of lease, sublease or another structure.

The buyer should also understand how common areas, parking and service charge will be handled.

• ✓Confirm whether the booking fee is refundable.
• ✓Confirm when the deposit becomes non-refundable.
• ✓Confirm whether payments are linked to construction milestones.
• ✓Confirm where the money will be paid.
• ✓Confirm whether payment is going to a developer account, advocate-client account or personal account.
• ✓Confirm whether receipts will be issued.
• ✓Confirm what happens if construction stalls after payment.
• ✓Confirm whether the buyer can suspend payment if the developer defaults.

At completion, the buyer should not accept handover simply because the developer says the unit is ready. The buyer should inspect the unit and compare it with the agreement, approved plans, specifications and promised finishes.

This is especially important where the buyer relied on a show house, brochure or sample unit.

• ✓Confirm whether the unit matches the agreed size and layout.
• ✓Confirm whether the finishes match the agreement.
• ✓Confirm whether fittings and fixtures are complete.
• ✓Confirm whether parking and common areas are available as promised.
• ✓Check whether there are visible defects.
• ✓Confirm whether completion documents are available.
• ✓Confirm whether the defect liability period is clearly recorded.

Kenyans living abroad face added risk because many decisions are made through photos, videos, agents, relatives or online updates.

A relative may visit the site, but that does not confirm title status. An agent may send photos, but that does not confirm approvals. A developer may share construction updates, but that does not disclose financing problems or transfer risks.

• ✓Appoint your own advocate.
• ✓Give instructions in writing.
• ✓Avoid relying only on relatives or agents.
• ✓Keep all communication and receipts.
• ✓Ensure payments are traceable.
• ✓Confirm whether a Power of Attorney is needed.
• ✓Have all documents reviewed before signing or paying.

A buyer should slow down or seek legal advice where the transaction appears urgent, unclear or heavily controlled by the developer or agent.

• ✓The developer refuses to share title documents.
• ✓Documents are promised only after payment.
• ✓Payment is demanded urgently.
• ✓Money is requested into a personal account.
• ✓The project has no clear approvals.
• ✓The agreement protects the developer more than the buyer.
• ✓There is no clear completion date.
• ✓Refund terms are unclear.
• ✓The developer cannot explain how final ownership will be transferred.
• ✓You are discouraged from appointing your own advocate.
• ✓The project relies mainly on brochures, videos and verbal promises.

Off-plan property is not automatically unsafe. Many genuine projects are completed successfully. The problem begins when buyers pay before checking the documents.

A proper review should answer five basic questions:

• Who owns the land?
• Who has authority to sell?
• What approvals are in place?
• What exactly is being bought?
• What happens if the developer does not complete?

If these questions are not answered clearly, the buyer is not investing from a position of confidence. The buyer is relying on trust.