THE LAND LAWS (AMENDMENT) ACT NO.28 OF 2016 PART 1:

THE LAND LAWS (AMENDMENT) ACT NO.28 OF 2016 PART 1:

The Land Laws (Amendment) Act No. 28 of 2016 (the “LLAA”) received presidential assent on 31^st August, 2016.

AMENDMENTS MADE TO THE LAND ACT NO.6 OF 2012(the “LA”)-PART 1

Highlights of changes introduced by the LLAA to the LA include the following:-

·       The Cabinet Secretary with effect from 21^st September, 2016 is now empowered to publish guidelines on the penalties for non-compliance with the provisions of Article 60(1) (a) and (c) of the Constitution as regards maximum land holding acreage and Article 40, with regards to minimum land holding acreage. 

·         The Land Compensation Fund which was previously provided for under Section 153 of the LA, has been done away with completely. The Land Compensation fund offered compensation to any person who, as a result of the implementation of any provisions of the LA by the National Government, County Government, Urban Area or City suffered any loss or deprivation or diminution of any rights or interests in land or any injurious affection in respect of any ownership of land.

·         With effect from 21^st September, 2016, the owner or the person in charge of private land is now empowered to serve a noticeof not less than three (3) months before the date of the intended eviction to an unlawful occupier.

·         The proprietor/occupier of land will no longer have the right to cancel and extinguish any easements or analogous rights granted.

·         The National Land Commission will no longer have the mandate to administer the Land Settlement Fund, it will with effect from 21^st September, 2016 be administered by a board of Trustees known as the Land Settlement Fund Board of Trustees.

·         The retrospective effect of the LA, on charges made before the coming into effect of the LA shall no longer be applicable, hence this means that any charge, mortgage or other security instrument which was valid before the commencement of the LA shall continue to be valid in accordance with its terms. However, notice to spouses shall still be required to be served.

·         The National Land Commission is now required to notify the lessee within five (5) years before the expiry of the leasehold tenure, by registered mail, of the date of expiry of the lease and inform the lessee of his or her pre-emptive right to allocation of the land upon application; and if within one (1) year the lessee shall not have responded to the notification, publish the notification in one newspaper of nationwide circulation.This however shall only apply to Kenyan citizens and only if the land is not required by the national or county government for public purposes.

·         A registered proprietor shall no longer be obliged to surrender the freehold interest in exchange for leasehold. This comes as a welcome change to the previous position which required one to surrender their freehold title in exchange for a leasehold title, with new terms and conditions. Holders of freehold titles can now obtain planning permission without the fear of losing their freehold interest in the property.

A more in-depth analysis of the changes to the effected to the Land Act, is available below:

Minimum and Maximum Land Holding Acreages

The LLA, provides for a new Section 159, which empowers the Cabinet Secretary to publish guidelines on the penalties for non compliance with the provisions of Article 60(1) (a) and (c) of the Constitution as regards maximum land holding acreage and Article 40, with regards to minimum land holding acreage. 

Land Compensation Fund

The LA under Section 153, previously provided for a Land Compensation Fund which offered compensation to any person who, as a result of the implementation of any provisions of the LA by the National Government, County Government, Urban Area or City suffered any loss or deprivation or diminution of any rights or interests in land or any injurious affection in respect of any ownership of land. This fund has been completely done away with by the LLA.

Prohibition of Unlawful Occupation of Land

The LLA, expressively prohibits unlawful occupation of public, private and community Land and provides the procedure for eviction of such unlawful occupiers, depending on the classification of the land as below:

Public Land

The National Land Commission is mandated in this case to notify all affected persons, in writing, by notice in the Gazette and in one newspaper with nationwide circulation and by radio announcement, in a local language, where appropriate, at least three (3) months before the eviction.

Community Land

The County Executive Committee Member responsible for land matters is mandated to notify all affected persons, in writing, by notice in the Gazette and in one newspaper with nationwide circulation and by radio announcement, in a local language, where appropriate, at least three (3) months before the eviction.

Private Land

In the case of private land if the owner or the person in charge is of the opinion that a person is in occupation of his or her land without consent, the owner or the person in charge may serve on that person a notice, of not less than three (3) months before the date of the intended eviction.

Cancellation and Extinguishment of easements and analogous rights

The proprietor/occupier of land will no longer have the right to cancel and extinguish any easements or analogous rights granted.

Land Settlement Fund

The National Land Commission will no longer have the mandate to administer this fund, it will with effect from 21^st September, 2016 be administered by a board of Trustees known as the Land Settlement Fund Board of Trustees.

Interest on unpaid compensation

Payment of interest on unpaid compensation in respect of compulsory acquisition shall be the base lending rate set by the Central Bank of Kenya prevailing at that time as opposed to the rate prevailing bank rates as previously provided for under the LA.

Power of Sale

The Chargee in a sale by a private contract, is now entitled to rely on a valuation carried out by a valuer who is registered with the institute of Surveyors of Kenya and the report shall in the absence of a manifest error, be conclusive in relation to the market price, provided that the valuation report shall at the time of sale be not more than six (6) months old.

Power of Chargee taking possession of Charged Land

A Chargee taking possession of charged land due to default by the Chargor shall now only be able to exercise the power of entry either peaceably or forcibly after obtaining a court order.

Remedies of a Chargee

The Chargee will now only be able to exercise their remedies for default by a Chargor in a Charge, ninety (90) days after serving the default notice and not two (2) months as previously provided under the LA.

Sale of Land under an Informal Charge

A Chargor is prohibited from possessing or selling land whose title documents have been deposited by a chargee under an informal charge without an order of the court.

Order of Priority of Charges

The LA previously provided that Charges shall rank according to the order in which they are registered. The mandatory effect of this section has been removed by the LLA which provides that the ranking order shall not apply if the Charge instrument states otherwise. Hence, this gives the parties to the Charge, the power to rank the Charge within its provisions.

Retrospective effect of the LA

The LLA amends the LA which provided that Part VII of the LA (General Provisions on Charges) applied to charges on Land made before the coming into effect of the LA. Hence, this means that any charge, mortgage or other security instrument which was valid before the commencement of the LA shall continue to be valid in accordance with its terms. However, notice to spouses shall still be required to be served.

Validity of Contracts in Sale of Land

The LLA, excludes the following contracts from the requirement that no suit shall be brought upon a contract for the disposition of an interest in land unless the contact upon which the suit is founded is in writing, is signed by all parties thereto and the signature of each party signing has been attested to by a witness who was present when the contract was signed by such party:-

a)      a contract made in the course of a public action;

b)      the creation or operation of a resulting, implied or a constructive trust; or

c)       any agreement or contract made or entered into before 21^st  September, 2016, provided that the verbal contracts shall be reduced to writing within two years from this date.

Lessee pre-emptive right to allocation

The National Land Commission is now required to notify the lessee within five (5) years before the expiry of the leasehold tenure, by registered mail, of the date of expiry of the lease and inform the lessee of his or her pre-emptive right to allocation of the land upon application; and if within one (1) year the lessee shall not have responded to the notification, publish the notification in one newspaper of nationwide circulation.

This however only applies to Kenyan citizens and only if the land is not required by the national or county government for public purposes.

Dealings with Controlled land

Prior written approval of the Cabinet Secretary shall now be required prior to any dealings in respect of Controlled Land. Controlled Land is defined under the LLA to mean land in Kenya which is:

a)      within a zone of twenty-five kilometres from the inland national boundary of Kenya;

b)      within the first and second row from high water mark of the Indian Ocean; or

c)      any other land as may be declared controlled land under any law or statute.

Retention of Freehold Interest when seeking planning permission

The LLA has added a new section to the LA which provides that, save as provided for in the Constitution, a registered proprietor shall not, for the purposes of obtaining planning permission, be obliged to surrender the freehold interest in exchange for leasehold. This comes as a welcome change to the previous position which required one to surrender their freehold title in exchange for a leasehold title, with new terms and conditions. Holders of freehold titles can now obtain planning permission without the fear of losing their freehold interest in the property.

NOTE: For any enquiries on the same please do not hesitate to contact us on legalserviceskenya@gmail.com

SCOPE OF THE BANKING (AMENDMENT) ACT, 2015

The President of the Republic of Kenya, assented to the Banking (Amendment) Act, 2015 on August 24, 2016. The Act seeks to protect consumers from high interest rates being charged by Banks and financial institutions. Borrowers in Kenya have over the years been subject to predatory lending practices, they have been faced with overwhelming interest rates due to Banks having the flexibility and the power to determine interest rates.

The principal object of the Act, is to provide a mechanism for regulation of banks and financial institutions' rates through the introduction of ceilings being a regulatory measure that the maximum interest rate that a Bank or a financial institution can charge a borrower for a loan. 

The Act amends section 33A of the Principal Banking Act (cap 448) of the Laws of Kenya by insertion of a new section bestowing powers to the Central Bank to enforce interest ceilings.

It provides that a Bank or a financial institution shall set the maximum interest rate chargeable for a credit facility in Kenya at no more than 4%, the base rate set and published by the Central Bank of Kenya. This means that no Bank or financial institution will have the liberty of setting their own interest rates as before, where they were able to exercise this flexibility they will have to comply with this section by ensuring that the interest rate does not exceed 4% of the base rate set by the Central Bank of Kenya.

It is also provided that the  minimum interest rate granted on a deposit held in interest earning in Kenya should not go below 70% of the base rate set by the Central Bank of Kenya.

The Act also attaches criminal sanctions to a Bank or financial institution for entering into an agreement or an arrangement with a person to lend directly or indirectly at an interest rate in excess of that prescribed by the law. A bank or a financial institution that contravenes this  shall be liable to a fine of not less than One (1) million shillings, or to imprisonment for a term not less than One (1) year, or to both.

It shall be also be required of a bank or financial institution to fully disclose to a borrower all the charges and terms relating to the loan prior to granting a loan. This is a very important aspect as now a consumer can compare the prices and terms of credit from different sources.

As regards commencement of the Act it is not provided when it shall come into force, however the Interpretation and General Provisions Act under Section 9 provides that "an Act shall come into operation on the day on which it is published in the Gazette however if it is enacted in the Act, or in any other written law, that the Act or any provision thereof shall come or be deemed to have come into operation on some other day, the Act or, as the case may be, that provision shall come or be deemed to have come into operation accordingly." In this case the Act is silent on commencement and hence it will be deemed to come into force on the date in which it is published in the Kenya Gazette. 

LEGAL SERVICES KENYA: BEFORE SIGNING THAT EMPLOYMENT CONTRACT

LEGAL SERVICES KENYA: BEFORE SIGNING THAT EMPLOYMENT CONTRACT: The Employment Act of Kenya provides that a contract of service for a period equivalent of three (3) months or more should be in writin...

CHANGE OF USER PROCESS IN KENYA

Change of user is a very sensitive aspect of Land in Kenya. It is advisable that prior to acquiring a piece of land, to know the user of the property especially for developers as the process itself can prove to be very expensive and time consuming. Most people buy agricultural property with the intention of developing it for real estate purposes without knowing its use, this can be very detrimental as one cannot be able to develop the property without a change of user approval.

However, today there are sellers of property who go an extra mile to sell properties with the Change of user approval already obtained but very few hence it is always advisable to exercise due diligence prior to purchasing any property.

The whole aspect of change of user is a mechanism used by the government to control land use and development in Kenya, as we all know the government is the ultimate custodian of property in Kenya. Failure to obtain a Change of user approval can lead to the government repossessing the land.

Below are the various steps that need to be taken to obtain a Change of user approval in Kenya:

• Application using Form PPA1(in triplicate) duly signed by a registered physical planner.

• Notice is then published within fourteen (14) days inviting objections from the public.

• Preparation of the planning brief by the registered physical planner which is then submitted to the governing county government physical department  for approval together with payment.

• The application is reviewed by the relevant County government and if the changes sought are not in contravention to any statute or planning principles, an approval is issued-Form PPA2.

• The form PPA2 is further submitted to the National Land Commission for approval.

• The PPA2 is then circulated to the Director of Survey and Director of Physical planning.

• Next step is organizing for a site report through a licensed surveyor who submits comments to the National Land Commission on behalf of the Director of Survey and Director of physical planning.

• Obtaining a valuer for Land rent enhancement.

• The property is then re-surveyed and a new deed plan is obtained.

• The new deed plan together with the old Title to the property is submitted to the National Land Commission, where the surrender of Title is prepared and signed by the land owner.

• New Title is prepared indicating the new user of the property and submitted for registration.

It is always important to engage professionals in this process. If you wish to obtain a change of user approval in Kenya please do not hesitate to contact us on legalserviceskenya@gmail.com.

APPLYING FOR A WORK PERMIT IN KENYA

A work permit is an official document giving a foreigner permission to take a job in a country. In Kenya, Work Permits are issued by the Department of Immigration to any foreigner wishing to engage in employment in Kenya whether in gainful employment or voluntary service. 

It is illegal for any foreigner to work in Kenya without a valid work permit. The Law governing issuance of work permits in Kenya is the Kenya Citizenship and Immigration Act, 2011 of the Laws of Kenya. 

The Act provides that the Director shall issue a permit of the required class to a person who is not a prohibited immigrant or inadmissible person, who has made an application in the prescribed manner; and satisfied the Committee that he has met the requirements relating to the particular class of permit.  

Work permits in Kenya are issued in various classes,below are the different classes:

Class A

This permit is issued to persons who intend to engage in prospecting for minerals or mining.

Requirements.

◦Obtain or is assured to obtain the necessary licenses and registrations.

◦Sufficient capital or resources for investment. 
◦In an application for renewal of a permit a current license held for prospecting minerals and copy of PIN is required.

Class B

This work permit is issued to persons wishing to invest in Agriculture and Animal Husbandry. 

Requirements.
◦Proof of leasehold interest in land for the purpose.
◦Proof of capital available for the purpose.
◦Clearance from relevant bodies. 
◦In an application for renewal of the permit a current license held for prospecting minerals and copy of PIN is required.

Class D

This work permit is issued to a person who is offered specific employment by a specific employer who is qualified to undertake that employment. 

Requirements.

◦Copies of academic/professional certificates together with the Curriculum Vitae.◦Evidence that the organization failed to fill the vacancy from the local labor market.◦Dully filled Form 25, signed and sealed by the company.

Class G

This work permit is issued to investors in specific trade, business or consultancy.

Requirements.

◦Documentary proof of capital to be invested/already invested being a minimum of  US dollars  100,000 or its equivalent in any other currency.
◦Certificate of incorporation of the Company
◦Copies of personal and company PIN (Personal Identification Number) if business is running.
◦In an application for renewals one should provide audited accounts for previous 2 years and a certificate of tax compliance from the Kenya Revenue Authority.

Class I

This work permit is issued to a member of missionary society approved by the Government of Kenya and whose presence is beneficial to the country.

Requirements.

◦A copy of Certificate of Registration of the organization. 
◦Academic and professional certificates of the applicant. 


Class K

This is a residence permit issued to persons who have an assured income derived from sources outside and undertakes not to accept paid employment of any kind.

Requirements.

◦Documentary proof of assured income.

Class M

Work permit issued to Conventional Refugees.

Requirements.

◦Recognition letters from UNHCR and Department of Refugee Affairs.

Note: Section 41 (2) of the Act provides that a person to whom a work permit of class M is issued may engage in any occupation, trade, business or profession.


OTHER REQUIREMENTS

◦Dully filled and signed application form (Form 3).
◦Cover letter from employer/self/organization depending on the class (as applicable)
◦Copies of the National Passport.
◦Two coloured Passport size photographs.

PROCEDURE:

An person applying for a work permit should compile all the required documentation together with the prescribed fees applicable for the specific class and present them to the Department of immigration.

The prescribed fees for each class is as below:

CLASS A	MINING	10,000	250,000 FEE P/A
CLASS B	AGRICULTURE	10,000	100,000 FEE P/A
CLASS D	EMPLOYMENT	10,000	200,000 FEE/PA
CLASS G	INVESTORS	10,000	100,000 FEE/PA
CLASS I	RELIGION AND CHARITY	1,000	5,000 FEE/PA
CLASS K	ORDINARY RESIDENTS	10,000	100,000 FEE/PA
CLASS M	REFUGEES	GRATIS/FREE	GRATIS/FREE

Invalidation of a work or residence permit

The Act provides that where a permit has been issued to a person, and that person fails, without the written approval of the Director, to engage within ninety days of the date of issue of the permit or of that person’s entry into Kenya, whichever is the earlier, in the employment, occupation, trade, business or profession in respect of which the permit was issued or take up residence; ceases to engage in the said employment, occupation, trade, business or profession; or engages in any employment, occupation, trade business or profession, whether or not for remuneration or profit, other than the employment, occupation, trade, business or profession applied for, the permit shall cease to be valid and the presence of that person in Kenya shall be unlawful, unless otherwise authorized. 

If you wish to obtain a work permit in Kenya please do not hesitate to contact us on legalserviceskenya@gmail.com.

REGISTRATION OF NGOs IN KENYA

NGOs  in Kenya are generally governed by the Non-Governmental Organisations Co-ordination Act, 1990. The Act defines a Non Governmental Organisation as 'a private voluntary grouping of individuals or associations, not operated for profit or for other commercial purposes but which have organized themselves nationally or internationally for the benefit of the public at large and for the promotion of social welfare, development charity or research in the areas inclusive of, but not restricted to, health, relief, agriculture, education, industry and the supply of amenities and services.'

Registration of NGOs is basically expressed under Part III of the Act. The steps involved in the Registration of an NGO in Kenya is as stipulated below:

• Name Search: This is done by filling Form 2 and upon payment of the application fees, the name search is conducted and once approved the name is reserved for a period of thirty (30) days.

• Once a name has been reserved the next step is filing a formal application for registration, this is done by filling Form 3 (in triplicate) in original forms to be submitted to the executive director of the Bureau in the prescribed form.

• A duly filled Form 1, just one copy basically stating the contact person of the organisation.

• Copy of National Identity Cards/Passports and PIN Certificates for the proposed officials and Board members.

• Two (2) colored passport size photographs on a white background (2 by 2 inches) of the proposed officials and board members with their names and organization written at the back.

• For Kenyan citizens a Copy of a police clearance certificate of Good Conduct including the finger prints and receipts and for foreigners a notarized clearance certificate from their Country should be provided. (not more than six(6) months old).

• Two (2) Copies of the Constitution of the proposed NGO, duly signed  by the proposed officials and two board members.One of the proposed officials must also execute each page of the Constitution.

• Proposed One(1) Year budget of the NGO.

• A forwarding letter addressed to the Executive Director requesting for registration.

• It is a requirement that for foreign based NGOs, at least 1/3 of the board members must be Kenyan Citizens.

• Minutes authorizing the filling of the application with a specific agenda and resolution to register the organization as an NGO with the NGOs Board. Election of the interim officials MUST form part of the Agenda.

• Processing fees must accompany the application which is usually Kshs. 16,000/- for National NGOs and Kshs. 30,000/-for foreign NGOs.

Every Non-Governmental Organization registered is then issued with a certificate of registration which serves as conclusive evidence of authority to operate throughout Kenya or such parts of the country as are specified therein. 

Registration however is not guaranteed, the Board as provided under the Act can refuse to register an NGO for the following reasons:

a) its proposed activities or procedures are not in the national interests; or

b) the applicant has given false information in the application; or

c) it is satisfied on the recommendation of the National Council Organizations, the applicant should not be registered. 

NOTE: For any enquiries on the same please do not hesitate to contact us on legalserviceskenya@gmail.com

REGISTRATION OF A SOCIETY IN KENYA

The registration of a Society in Kenya is governed by the Societies Act (Cap 108) of the Laws of Kenya.

The requirements for registration of a Society in Kenya are as below:

• Name search;
• Number of members in the Society please note that the least number of members required to form a society are at least ten (10);
• Objects of the society;
• Societies application forms which are Form A and B being the application for registration of a society and notification of registered office and address of a society respectively;
• Societies Constitution specimen;
• Notice of the situation of the office and of the postal address of the society;
• Names, postal addresses and occupation of the secretary, chairman and treasurer;
• Application fees.

Registration procedure:

The Societies Act (Cap 108) Laws of Kenya requires that every society shall make an application to the Registrar within twenty eight (28) days after formation thereof for registration or exemption from registration.

For registration of a society, a name search has to first be conducted to ascertain the availability of the proposed names of the society, the applicants have to fill forms A and B being the application for registration of a society and notification of registered office and address of a society respectively, a specimen constitution of the society is then prepared. Once done all the necessary documents are submitted to the Registrar of society together with the application fees.

Upon application being made in the prescribed manner for registration of a society, the Registrar shall, register the society by entering in the register of societies, kept for the purpose, the prescribed particulars and the date of the entry and issue to the Society a certificate of registration. 

Registration is however not guaranteed, the Registrar may reject an application for various reasons such as if he has reasonable cause to believe that the society has among its objects, or is likely to pursue or to be used for, any unlawful purpose or any purpose prejudicial to or incompatible with peace, welfare or good order in Kenya, or that the interests of peace, welfare of good order in Kenya would otherwise be likely to suffer prejudice by reason of the registration of the society; or  the terms of the constitution or the rules of the society are in any respect repugnant to or inconsistent with any law; or he is satisfied that the application does not comply with the Societies Act (Cap 108); or he is satisfied that the society does not exist; or the name under which the society is to be registered is identical to that of any other society which either is existing or has existed, or of any society whose application for registration has been refused or so nearly resembles the name of any other society as, to be likely to deceive the public or the members of either society as to its nature or identity; or is, repugnant to or inconsistent with any law or is otherwise undesirable. 

If you wish to register a Society please do not hesitate to contact us on legalserviceskenya@gmail.com.