Duties of Counsel in a Land Transaction

Land transactions are sensitive matters. So, what are the duties of a lawyer to his or her client? What are his duties if he is acting for both parties?

When acting for the vendor, an advocate involved in conveyancing is charged with, but not limited to the following duties/obligations:

  1. Correspondence

When acting for a seller/vendor, the advocate must by either correspondence or when taking instructions obtain the following information:

i.Full names and addresses of the parties, the buyer’s advocate and those of any estate agents involved

ii. Full particulars of property concerned

iii. The price (consideration)

  • Whether any preliminary deposit is required or has been paid and if so, to whom?
  • Details of any mortgage or charge on the property if any, the lender’s name and the outstanding balance.
  • Whether the property is vacant, whether there are any chattels thereon and such like issues

vii. The expected date of completion and the fact as to whether the purchaser monies are available.

  1. Prepare the sale agreement
  2. Prepare title documents.
  3. Approve transfer/conveyance
  4. Procure execution of transfer or conveyance
  5. Attest the execution of transfer or conveyance
  6. Receive and account for the proceeds of sale to his or her client.
When acting for the purchaser, the advocate has similar duties as those for an advocate acting for a seller but must advise the client on the following issues
  1.  Finances
  2.  Possible future liability of taxes
  3.  Legal costs and expenses of the conveyance

The advocate must also be responsible for the following:

  1. Carrying out the search
  2. Scrutinizing the documents
  3. Approving sale agreement and sending out requisition of the same
  4. Preparing transfer or conveyance and engrossing the same
  5. Obtain a deposit for the transaction
  6. Attending to the execution of conveyance or transfer where necessary
  7. Stamping and lodging documents for registration
  8. Obtaining and paying the purchase monies to the vendor’s advocate
When acting for both parties, ethical and professional responsibility issues arise. The general principle is that an advocate is obliged to refrain from acting for both parties where there is a conflict of interest or where such a conflict is likely to arise.

When acting for both parties, instructions must be taken as to:

  1. Name and address of clients
  2. Details of property being sold/bought
  3. Source of purchase monies
  4. Whether there is a need for special terms.
  5. Nature of property ownership
  6. Execution of the agreement.
Upon getting the title documents, an advocate must discharge the following further responsibilities.
  1. Obtaining a rates clearance certificate

A rates clearance certificate is required with respect to properties within municipalities and falling within the jurisdiction of either the GLA or RTA or RLA. The rate is imposed pursuant to valuation for rating act cap 266 which allows local authorities established under the local governments act cap 265 to raise revenue from land located within their municipalities/jurisdictions.

A proprietor may object to the valuation. Upon payment of the requisite fees, one is issued with a rates clearance certificate. Once obtained, the land may be charged or disposed of to another party. Without the clearance certificate, the registrar will not register any transfer or conveyance or any dealings in the land. Rates must be paid whether property is freehold or leasehold.

  1. Obtaining a land rent certificate.

A land rent certificate is required where the land in question holds leasehold interest. It is a requirement under the RTA and the RLA to the extent that the land in question is leasehold. The land rent certificate is not required where the land in question is under the GLA. Pursuant to section 86 RLA and section 33 RTA, a registrar is empowered to decline to register any instrument unless a rates clearance certificate is produced.

  1. Obtaining consent of the commissioner of lands.

The consent of the commissioner for lands is required under the RTA and under the RLA where the land in question is leasehold but not freehold. Like the land rent certificate, the consent of the commissioner for lands is not required under the GLA.

  1. Obtaining the land control board consent

This is required where the land in question is agricultural land.

  1. Obtaining county clerk’s consent

This consent is only required where the lessor is a local government, for example, a municipal council.

  1. Obtaining consent of trustees

This arises in cases of settled land i.e. where land in question is vested in the national parks of Kenya. In such an instance, consent is got from the Kenya Wildlife Service.

  1. Obtaining consent of public corporation or authority

When one is dealing with a public corporation or authority, one must obtain the consent of that corporation or authority.

  1. Obtaining a discharge/re-conveyance

Where the land in question is subject to a charge, it must be discharged and a discharge obtained. Where it is mortgaged, a re-conveyance must be procured. Under the GLA, one need not produce the title deed, but under the RTA, one must produce the grant or certificate of title. Under the RLA it’s not a legal requirement for one to produce a certificate of lease or of land or even the lease itself, though this is the usual practice. Principally, this is due to the fact that under the RLA it is the register which is the conclusive evidence of title and not the title documents. Accordingly the register held by the district land registrar is the primary evidence.

  1. Payment of stamp duty

This is charged at 4% of the price declared in the transfer by the parties, usually the ad valorem value of the property in question if it is situated in municipalities/urban councils. For property in rural areas, the rate is 2% of the ad valorem value.

It is charged pursuant to the provisions of the Stamp Duty Act Cap 480.  A document which is required to be stamped shall not be registered until the requisite stamp duty has been paid.

This list is definitely not exhaustive. Feel free to share other duties in the comments section below.

All the best in your studies!

BY SASHA MUSIGI

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