Buying Scenario: Vacation – A duplex in Mombasa

Real estate investments along coastal cities like Mombasa, Malindi and Lamu generate substantial returns on investment returns. The real estate market in these cities is on an upward trend with property appreciation rates and growth rates steadily increasing. Reports indicate that by 2012, coastal cities in Kenya recorded the highest growth globally with an increase of 20%, surpassing popular international seaside cities such as Miami.

The process of buying property in the coastal city of Mombasa is similar to buying property in other parts of Kenya. However, buying property in Mombasa is a complex matter as most of the properties in this city do not have title deeds.

Against the background of this, most property transactions are made using title deeds from the mother or on the basis of gentlemen’s agreements, which are often clouded by deception, fraud and double sale or purchase of property, leaving most properties with endless lawsuits.

Steps that guide the purchase of a duplex in Mombasa

It is important that you, as a potential buyer, purchase a duplex with an individual property title, as well as rely on gentlemen’s agreements to authenticate your purchase and ownership.

1.) Hire a real estate agent (5.51% commission).

• Although estate agents here charge the same commission as in other parts of Kenya, you’ll likely dig deeper to pay additional search and viewing fees that cost about Ksh3,500 and Ksh1,500 respectively.

• Real estate agents are crucial in finding a suitable duplex that meets your needs and expectations. They have extensive knowledge about important aspects of a property, such as the security of the area, ownership of the property, and the costs of the various duplexes available for sale.

• Agents can help you through the conveyance (provision of in-house legal services) and can help match you with the right mortgage lenders to finance your purchase.

• Agent fees are paid when the sale is signed.

2.) Hire a real estate attorney (1.5% fee).

• The purchase of a masionate in Mombasa should be facilitated by a lawyer to assist in the acquisition of properties.

• Once you have identified a suitable duplex and have met with the seller and agreed to go through with the transaction, your solicitor will first carry out a title check at the land registry located in Mombasa City at a cost of Ksh500 to ensure that the massionado is registered.

3.) Pay deposit (10 – 30%)

If the property is registered, the lawyer will draw up a conditional preliminary contract duly signed and executed by both parties, in which you will have to pay a refundable deposit of 10-30% of the purchase price.

*Make sure both parties agree on how the property will be financed

4.) 90 day transaction period

Once the deposit has been paid, the transaction process begins which takes approximately 90 days after the parties sign the preliminary contract. Within this period:

• Seller must find all required clearances from Mombasa City Council such as land rental clearance fees and certificates (Ksh7,500) and transfer of consent to ensure all local levies and utility bills are cleared before transfer ownership of the property.

• Your solicitor must then prepare a transfer draft which costs a flat rate of 4% at the Mombasa Lands office and obtain a stamp duty for the same.

• An official from the Ministry of Lands will then inspect and verify the duplex while ensuring that the sale price matches its actual value.

• Your attorney then finalizes the registration of the property transfer.

5.) Close the deal

Upon registration of the transfer of ownership, you can settle the payment balance with the seller and, 30 days later, you can settle any outstanding legal fees and taxes.

Note: For those outside of Kenya, you can use your preferred solicitor to purchase a duplex in Mombasa through power of attorney.