What Is Required for a Real Estate Developer to Carry Out Projects in Kenya

What Is Required for a Real Estate Developer to Carry Out Projects in Kenya

Real estate in Kenya is one of the fastest-growing sectors, driven by increasing urbanization, a growing middle class, and rising demand for housing and commercial spaces. However, for a real estate development company to successfully execute its projects in Kenya, there are a number of legal, regulatory, financial, and operational requirements that must be met.

This article explores the key prerequisites every real estate developer in Kenya needs to understand and fulfill.

1.Company Registration and Compliance

Before any project can begin, a developer must register and comply with all legal frameworks.

Business Registration

• Register with the Business Registration Service (BRS) under the Companies Act, 2015.
• Obtain a Certificate of Incorporation.
• Choose a suitable structure: Limited Company, Partnership, etc.

Kenya Revenue Authority (KRA)

• Register for a Personal Identification Number (PIN).
• Register for VAT if annual turnover exceeds KES 5 million.
• File and pay taxes consistently.

2. Land Acquisition and Due Diligence

Securing land legally and correctly is the bedrock of real estate development.

Land Search and Verification

• Perform a land search via the Ministry of Lands or ArdhiSasa.
• Confirm ownership, title details, and encumbrances.

Land Use and Zoning

• Ensure the project complies with local zoning laws and land-use regulations.

Purchase or Lease Agreement

• Hire a lawyer to draft contracts.
• Secure Land Control Board (LCB) consent for agricultural land.

3. Planning and Approvals

Development must be approved by various authorities.

Architectural and Structural Design

• Engage registered architects and engineers to create official building plans.

County Government Approvals

• Submit plans to the County Physical Planning Department.
• Obtain:
  • Development Permission
  • Change of User (if needed)
  • Building Permits

Environmental Impact Assessment (EIA)

• Submit an EIA report to NEMA.
• Obtain the EIA license before breaking ground.

4. Construction Phase Requirements

The construction stage must follow safety and legal protocols.

Engage Licensed Professionals

• Work with:
  • Contractors registered with National Construction Authority (NCA)
  • Architects from BORAQS
  • Engineers from EBK

NCA Registration

• Register the project and obtain an NCA Project Certificate.
• Ensure workers have WIBA (Work Injury Benefits Act) insurance.

5. Financing and Capital Management

You’ll need strong financial backing and structure to execute the project.

Sources of Capital

• Consider:
  • Private investors
  • Bank loans
  • Joint ventures
  • Off-plan sales

Feasibility Studies

• Conduct comprehensive market and cost analysis.

Escrow Accounts

• For off-plan projects, set up escrow accounts for transparency and fund control.

6. Financing and Capital Management

A good product is nothing without buyers.

Market Research

• Understand local demand, demographics, and pricing.

Sales Contracts

• Use legally binding sale agreements. We highly recommend you work with a competent and professional law farm such as; https://abibadvocates.com/our-team/ who specialize in real estate advocacy and consultation.
• Ensure compliance with consumer protection regulations.

Title Transfer

• Upon project completion and full payment, transfer ownership via the Lands Registry.

7.Post-Construction and Handover

Final steps ensure the building is habitable and maintainable.

Occupancy Certificate

• Apply for this through the county to certify that the building is safe and complete.

Utility Connections

• Ensure water, electricity, sewerage, and internet connections are active.

Facility Management

• Establish a property management company or residents’ association to oversee the premises. PZ Developers Limited are specialized in offering Property Management. https://pzdevltd.com/