Real estate investments along the coastal cities like Mombasa, Malindi and Lamu generate substantial returns on investment returns. The real estate market in these cities is on an upward trend with property appreciation rates and growth rates constantly increasing. Reports indicate that by 2012, Kenyan coastal cities recorded the highest growth globally with an increase of 20%, surpassing popular international coastal cities like Miami.
The process of buying property in the coastal city of Mombasa is similar to buying property in other parts of Kenya. However, buying property in Mombasa is a complex matter since most of the properties in this city do not have title deeds.
Against the background of this, most property transactions are made using title deeds from the mother or on the basis of gentlemen’s agreements, which are often marred by deceit, fraud and double selling or buying of property, leaving most properties with endless lawsuits.
Steps that guide the purchase of a duplex in Mombasa
It is important that you, as a potential buyer, buy a duplex with an individual title, as well as rely on gentlemen’s agreements to authenticate your purchase and ownership.
1.) Hire a real estate agent (5.51% commission).
- Although estate agents here charge the same commission as in other parts of Kenya, you are likely to dig deeper to pay additional search and display fees which cost approximately Ksh3,500 and Ksh1,500 respectively.
- Real estate agents are crucial in finding a suitable duplex that meets your needs and expectations. They have extensive knowledge about important aspects of a property, such as the safety of the area, ownership of the property, and the costs of the various duplexes available for sale.
- Agents can help you through the conveyance (provision of in-house legal services) and can help connect you with suitable mortgage lenders to finance your purchase.
- Agent fees are paid when the sale is signed.
2.) Hire a real estate attorney (1.5% rate).
- Buying a masionate in Mombasa should be facilitated by a lawyer to assist in property acquisition.
- Once you have identified a suitable maisonette and have met with the seller and agreed to the transaction, your solicitor will first carry out a title check at the land registry located in the city of Mombasa at a cost of Ksh500 to ensure that the massado is registered.
3.) Pay deposit (10 – 30%)
If the property is registered, the lawyer will draw up a conditional preliminary contract duly signed and executed by both parties, in which you must pay a refundable deposit of 10-30% of the purchase price.
*Make sure both parties agree on how the property will be financed
4.) 90 day transaction period
Once the deposit has been paid, the transaction process begins, which takes approximately 90 days after the parties sign the preliminary contract. Within this period:
- The seller must find all required authorizations from the Mombasa council such as fees and land rental clearance certificates (Ksh7,500) and consent transfer to ensure all local liens and utility bills are settled prior to transfer ownership of the property.
- Your solicitor must then prepare a transfer draft which costs a flat rate of 4% at the Mombasa Lands office and obtain stamp duty on the same.
- An official from the Ministry of Lands will then inspect and verify the duplex while ensuring that the sale price matches its actual value.
- Your attorney then finalizes the record of the transfer of ownership.
5.) Close the deal
Upon registration of the transfer of ownership, you can settle the payment balance with the seller and, 30 days later, you can settle any outstanding legal fees and taxes.
Note: For those outside of Kenya, you can use your preferred lawyer to buy a maisonette in Mombasa through a power of attorney.