Legal Alert: Still Holding an Old LR Title or Apartment Sublease? Ardhisasa and Sectional Title Conversions

If your Nairobi flat, apartment, maisonette or commercial unit is still held under an LR or GLA title or a long-term sublease that has not been converted, buyers, banks and the Lands Registry now expect something different. Here is what to check before you deal with it.

Many Nairobi property owners keep their title documents in a safe place and rarely look at them again. An LR number title. A grant issued under the repealed Government Lands Act. A 99-year sublease of a flat, with a share certificate in the management company. These documents were perfectly sound when they were issued, and most of them remain valid today.

What has changed is the system around them. Nairobi’s land records are being migrated to the register under the Land Registration Act, 2012, parcels are being renumbered, and dealings in the city have moved onto Ardhisasa, the Ministry of Lands’ digital platform. At the same time, the Sectional Properties Act, 2020 (the Act) changed the way ownership of individual units in a shared building is meant to be recorded.

Most owners only discover where their property stands when a buyer’s advocate, a valuer or a bank asks a question that cannot be answered quickly. By then, the clock is usually running on someone else’s deadline.

Owners frequently hear the word “conversion” and assume it refers to a single exercise. In practice, there are two, and they deal with different things.

  • Migration of the land record. This concerns the land on which the building stands. Parcels held under titles issued under the repealed statutes in Nairobi have been published, in batches, in conversion lists with new parcel numbers in the format NAIROBI/BLOCK XX/YYY. The registered proprietor then applies on the Ardhisasa platform, directly or through an advocate, for a replacement title, after which future dealings in that parcel are processed on the platform.
  • Conversion to sectional title. This concerns how you hold your particular unit. Where flats, apartments, maisonettes, townhouses or offices were sold by registering long-term subleases against the mother title, the Act required those registered before it came into force to be reviewed to conform to the Land Registration Act. The end point is a registered, geo-referenced sectional plan, an individual certificate of lease or title for each unit, and an owners’ corporation in place of the old management company.

A building may have completed one process, both, or neither. The two are also connected: a sectional plan is registered against the parcel record, so the status of the mother title can determine what is possible for the units within it.

  • 28th Dec 2020: The Sectional Properties Act, 2020 comes into force
  • 27th Apr 2021: Ardhisasa, the Ministry’s digital land platform, goes live for Nairobi
  • 10th May 2021: The Lands Registry stops registering long-term leases supported only by architectural drawings
  • 28th Dec 2022: The two-year window to review qualifying long-term subleases closes

Nairobi’s property market has quietly moved on. Developers looking for land to bring into joint ventures, purchasers and their advocates, and lenders increasingly prefer to deal with parcels that have been migrated to the new register and carry a NAIROBI/BLOCK number. The difference between holding a converted title and holding an old one is now felt at almost every stage of a transaction.

  • Buyers and joint-venture partners prefer it. Developers and purchasers are increasingly reluctant to commit funds against an old title that still needs work before it can be dealt with. A converted parcel is simply easier to sell, develop or bring into a venture, and that preference shows up in negotiations and in price.
  • Due diligence is quicker and cleaner. Ownership and encumbrances on a converted parcel can be verified through an official search on Ardhisasa, rather than through a manual search of the physical file at the registry, with the delays and uncertainty that can come with it.
  • Lenders are setting the pace. Many banks now make conversion of the title a condition precedent before they register a charge. An owner who wants to borrow against an unconverted property may first have to complete the process on the bank’s timeline rather than their own.
  • Stronger protection against fraud. The verified owner of a parcel on Ardhisasa is alerted, on the platform and by phone or email, when someone searches the parcel record or attempts a transaction on it. An owner, therefore, learns early of any dealing they did not expect, rather than discovering it after the fact.
  • No manual route once a parcel is gazetted. Dealings in old titles often still call for a manual approval at the Lands Registry. That approval is not automatic, and it can add weeks to a transaction that the parties assumed would close on schedule. Once a parcel appears in a published conversion list, the Ministry has directed that no manual dealing, including an application to convert to sectional titles, be undertaken until the title is replaced under its new parcel number. An owner who has not done so may find that a sale, charge or conversion cannot proceed until it is.

For owners of individual units, the same pressure applies one level down. The Act gave a two-year window from its commencement, ending on 28th December 2022, for qualifying long-term subleases to be reviewed. That window has closed, but the obligation has not. The Lands Registry stopped registering new long-term leases supported only by architectural drawings from 10th May 2021, and the Act requires the Registrar to register a restriction against the title of the parcel, preventing further dealings, where a proprietor or developer fails to comply.

None of this means that every older title is defective, that every building must follow the same route, or that an unconverted property can no longer be sold or charged. Not every long-term lease is caught by the conversion requirement, and certain arrangements are expressly exempt under the Sectional Properties Regulations, 2021, depending on how the development was structured and documented. The point is simpler. A converted title is the one the market now finds easiest to work with, and the questions around an old one tend to surface at the worst possible moment, in the middle of a sale, a refinancing, a succession or a family transfer, when time and leverage are short.

Before any transaction, it is worth being able to answer the following with confidence:

  1. What exactly do I hold: an individual certificate of lease or title for my unit, a registered sublease against the mother title, or a share in a management company alongside a lease?
  2. Has the parent title to my building been migrated, and is it recorded under a new parcel number?
  3. Is there a registered sectional plan for the building and, if not, has anyone applied to convert?
  4. Who holds the reversion and the original mother title (the developer, the management company or a lender), and are they engaged in the process?
  5. Does my development fall within the conversion requirement at all, or could it sit within one of the exemptions?
  6. Is anything registered against the parent title, such as a restriction, a charge or a caution, that could hold up a dealing in my unit?
  7. If my unit is charged, or I intend to borrow against it, what will the lender require?

If any of these questions produces a hesitant answer, that is usually the signal to look more closely.

In our experience, the difficulties are rarely about the law alone. A developer may have wound up or become unreachable. The original mother title may be held by a bank. Management company records may be incomplete, or the shares may never have been issued to owners. Approved plans may no longer match the building as constructed. Owners may simply not be aligned on who should lead and who should pay.

The law anticipates several of these situations. A conversion may be initiated by the developer, the management company or any unit owner, and the Registrar is to dispense with the original title where the developer is unwilling or unavailable to surrender it. Each route, however, needs careful handling, and the right order of steps matters. An application made with the wrong documents, by the wrong party or out of sequence can cost months.

Our Real Estate Department works with individual owners, owners’ groups, management companies, developers and lenders on title and registration matters across Nairobi. We can help you:

  • review your existing title documents, lease and management company records;
  • establish the registration status of your parcel and unit, including on Ardhisasa;
  • assess whether your building is subject to sectional conversion, and what migration or replacement of title it may need;
  • examine the sectional plan, management company and developer arrangements that affect your unit;
  • coordinate with surveyors, the management company, the developer and any lender; and
  • advise on the right steps before you sell, refinance, transfer or take part in a conversion.

The best time to understand the status of your property is before a buyer, a bank or the Registrar raises it. A focused review now can turn a potential obstacle into a matter of routine, and protect both the value of your property and your ability to deal with it when you choose.

If you own a flat, apartment, maisonette or commercial unit in Nairobi held under an old LR or GLA title or a long-term sublease, we would be glad to review your documents and advise on the steps that suit your property.