Online Reporter
Trust Maanda
Legal Position
WHEN buying a property, you need to be careful to minimise the risk of being scammed.
You need to carry out an investigation of a property to ensure that the legal paperwork is in place. This is called due diligence.
Due diligence in land sales is a comprehensive investigation of a property before purchase to ensure its legal, financial, and physical aspects are sound and to identify and eliminate potential problems.
Due diligence is crucial for buyers to avoid costly mistakes and related disputes.
This process includes reviewing the land title, checking the applicable zoning laws, including conducting a professional survey, and evaluating the physical condition and environmental state of the land.
Some of the aspects in due diligence include verifying if the seller is the correct owner of the land.
Someone can masquerade as the owner when in actual fact they are not. You need to check and verify their identity documents. Some fraudsters even create a fake identity particular of the owner.
It is imperative for you to physically inspect the land before you buy. They can sell you a non-existent piece of land.
Look at the approved layout plan. If necessary, check with the Surveyor General’s office for verification of the land.
If the property has a title deed, check with the Deeds Registry to verify the owner. Check if there are any mortgages, caveats and other encumbrances on the property.
These mortgages signify that the owner owes someone some money and has used the land as security.
This means that the land cannot be transferred to you before the person owed is paid his or her money. Usually, banks register mortgage bonds on the property when they lend money, as security.
A caveat signifies that someone lays claim on the land. It cannot be transferred unless and until the dispute that gave rise to the placement of the caveat has been resolved and the caveat is removed.
Caveats are mostly imposed against a property pending resolution of a dispute.
Check for any pending litigation or claims against the property.
If the seller is a company, get to know who the directors are from the papers filed with the company registry. The company should have a directors’ resolution to sell.
Find out if the directors have authorised the sale and empowered the person representing it in the sale. A person who purports to act without the company’s authority does not bind the company. If the land belongs to a deceased estate, verify who the executor is and whether they are authorised to sell and transfer it. Check if the estate has any disputes.
Get to know what type of ownership the seller has on the land. Do they have a title deed over the property? If so, they are the registered owner. Do they only have a sale agreement between them and the council, for example? If so, you need to check if the sale agreement is in council records. The agreement between you and the one who bought the stand from council is called cession.
If it is a cession agreement, you need then to ensure that you and your seller go to the council for your name to be entered in their records instead of the one who sold you. This is when the cession is effected.
Don’t stay with just an agreement without going to have cession done in the council records.
The seller can sell to another person who will then be entered in the council records behind your back.
Before you enter into a cession agreement, make sure you check with council to verify if the seller is the one who has the sale agreement with council.
If you are not sure, get a professional survey done to confirm property boundaries and ensure they match the legal description.
You must inspect the physical condition of the land for any signs of wetness in case it is a wetland or any other condition that can cause issues.
If you are buying a propriety for a particular use, confirm zoning and utility regulations of the area.
Confirm local zoning laws and restrictions to understand what can and cannot be done with the land.
You may buy a stand for a church only to discover that the area is not zoned for churches. You end up seeking approval for change of use if that is a permissible use.
Verify the requirements of the area and if there is access to necessary utilities like water, electricity, and sewer.
When doing the sale agreement, make sure you understand the terms and conditions agreed. There are some hidden conditions in small print that you may overlook but have a huge impact on the agreement.
Analyse the purchase agreement to ensure it aligns with everything that has been agreed upon.
Where you are not sure, consult with legal and real estate professionals for professional assistance.
Trust Maanda is a legal practitioner and a partner at Maunga Maanda And Associates. He writes in his personal capacity. He can be contacted on +263772432646 or [email protected]
