Many Kenyans are buying apartments in upmarket areas like Kilimani, Kileleshwa, Lavington, Parklands, and Westlands due to enhanced security, amenities, proximity to workplaces, good infrastructure, investment potential, and prestige. However, it is important to conduct due diligence before buying to identify any potential risks or issues that may affect the property’s value or suitability.
The due diligence involves gathering and analyzing all relevant information related to the property, including its physical condition, legal status, outstanding debts or liabilities, market conditions, site inspections, title deeds, survey reports, environmental assessments, and financial statements.
You might be wondering how to go about due diligence, especially when purchasing an apartment. What steps to take, and where to start? Here are a number of things you can do to observe this;
- Verify ownership with a copy of the title deed from the Ministry of Lands and Physical Planning or a lawyer.
- Confirm the seller’s identity with identification documents.
- Check for encumbrances like mortgages or liens with a search at the land registry office.
- Inspect the property for defects or hire a surveyor/engineer for a report.
- Confirm the property’s zoning for residential use with local authorities or a lawyer.
- Verify that the property has approvals from relevant authorities for building standards and regulations.
- Review the sale agreement, seek legal advice if necessary, and ensure that it includes all necessary details.
To carry out this due diligence when buying an apartment in Kenya, seek help from a lawyer, real estate agent, and/or surveyor. It may be a hectic process especially if there is no prior knowledge of the real estate documentation and regulations. It is them more plausible to work with people who will make the process less heavy on you as a tenant. However, there are common challenges to expect, such as incomplete or inaccurate information, fraud, disputes, poor property condition, complex legal processes, and lack of documentation. These challenges can cause delays and additional costs, making it essential to have a professional’s assistance to ensure a successful transaction.
Always remember that due diligence is the difference between a good investment and a bad one. Don’t let it be the missing piece of your investment puzzle. If anything, run with the mantra of ‘No Due Diligence, No Deal!’
All the best in your future property Investments!
