Importance of a sale agreement when buying land | Legalsure East Africa Limited

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Importance of a Sales Agreement When Buying Land

Don’t you just feel overwhelmed when you finally glance at a sale agreement for the ideal property you intend to buy, especially if it is your first purchase? We totally feel you. The agreement for sale of land is a very important document that outlines the terms and conditions used in real estate transactions. Quite often, it is a lengthy document and may contain several unfamiliar terms. It is imperative that you fully understand those terms before you append your signature at the end.

A sale agreement is a legal document in writing, executed, signed and delivered by the parties to the agreement of the sale. It is a legally binding document that clearly outlines the terms and conditions for the sale of a property between two parties, the purchaser and the vendor.

This document enables the process of sale to go through without any hurdles and is used to protect the interests of both the purchaser and the vendor and also to ensure that all expectations are clear. All the terms and conditions included in the agreement for sale of land must be understood thoroughly by both the parties and obeyed throughout the sale process till the time the sale deed is made.

 

In law, what are the agreements relating to land?

legalsure-sale-agreement-exampleSection 3(3) of the Law of Contract Act states that, any transaction relating to land, must be in writing. But not only that, it must also be signed by both parties (the buyer and the seller). It must be witnessed, and it must be attested by an Advocate of the High Court of Kenya. Additionally, it must also specify the land registration number, the size of the plot, its location and the amount to be paid for it. The agreement must also indicate how this payment will be processed, for example, in instalments of X amount within Y period of time. Finally, once all this is done, the agreement must be registered at the Lands Registry.

 

Another importance is Due Diligence

The buyer must make sure that the seller actually has the right to sell the property. The right to sell means that the seller is the true owner of that land, that is, it should be registered in his or her name. So what does an interested buyer do, to ensure that he or she does not fall victim to conmen?

Copies of the following documents from the seller are of great importance: National ID, KRA Pin Certificate and Title Deed. You then use the copy of the title deed to conduct a search at the Lands Registry. This will show whether the Title is legitimate, the size and registration number of the plot, and the name of the registered owner.

 

Understanding the Agreement for Sale of Land

The purchase of your ideal property in real estate is an overwhelming, exciting and as well as a rewarding process. There are contracts involved, the transfer of title, loans/financing, taxes and so much more. The presence of a real estate professional is very necessary to help guide you through the process when purchasing real estate. We at Legalsure, afford you the legal security, advice and mitigate the legal risks throughout the different stages when in investing in real estate. Our experienced team has an indepth understanding of the full life cycle of the property transactions and it is our knowledge of the law that our clients refer us with confidence!

An agreement for sale of land should therefore contain at least the following important information:

  1. Identity of both the vendor and the purchaser. That is, each, their full name, national identity card number, pin number, phone number and the physical address.
  2. The cost of purchase. This defines the agreed amount to be paid as cost of sale, how it is to be paid (is it in instalments or cash) and the period of time when the amount is to be paid.
  3. The description of the property being sold. This indicates the size, the title number, location and condition of the land.
  4. The distribution of costs involved. This clearly defines who pays the different costs involved in the process – that is, stamp duty, legal fees and title transfer – during the transfer of the land from the vendor to the purchaser.
  5. The obligation of each party involved in the transaction. This outlines what should be done by the purchaser and also the vendor.
  6. Remedies for Breach of the Contract. This protects the interest of each party in the agreement, by outlining how non-performance of the agreed terms of the agreement are to be handled.

legalsure-sale-agreementThe above is the proper way of buying land in Kenya. This involves a number of processes, key and most important among them is, ensuring that you, the purchaser, do proper due diligence, such as going for the physical site visit, doing a land search and also a company search if buying from a registered company, such as Legalsure. Once done, you can proceed, with our help and guidance, to forming a contract that can be enforced by the law, that is, an agreement for sale of land.

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