Off-Plan Property in Kenya: FAQ

OLM KNOWLEDGE — LEGAL GUIDE

Common questions on buying off-plan property in Kenya, and how to protect yourself as a purchaser.

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What Is Off-Plan Property in Kenya?

The Off-Plan Purchase Model

An off-plan purchase is a commitment to buy a property that does not yet exist in its completed form. The buyer contracts with a developer at an agreed price, makes staged payments over the construction period, and receives a completed unit once the development is finished and the necessary occupation certificate has been issued. The appeal is straightforward: off-plan prices are typically set at the start of the development cycle and may be below the market value of a comparable completed unit by the time of handover. The risk is equally clear: the developer may not deliver on time, may deliver a unit that does not match the specification, or in the worst case may become insolvent before the development is finished.

The Regulatory Framework

Off-plan sales in Kenya are regulated principally by the Land Act 2012 and the Law of Contract Act, supplemented by the National Construction Authority Act, which requires registration of contractors and approval of construction projects. The Physical and Land Use Planning Act 2019 governs the planning permission process at county level. There is no single statute in Kenya that is specific to off-plan sales in the way that some other jurisdictions have enacted dedicated legislation; the protection available to an off-plan buyer is therefore primarily contractual, which makes the quality of the sale agreement critically important.

Due Diligence Before You Commit

Investigating the Developer and the Title

Before signing an off-plan sale agreement or paying a reservation deposit, a buyer should confirm that the developer holds clear title to the development site — through an official search at the land registry — and that the title is not subject to any charge or caveat that would prevent subdivision and transfer of individual units. Obtain the developer’s certificate of incorporation, CR12 and audited financial statements where available, and search the Companies Registry for any court orders, charges or winding-up petitions. Where a project is to be financed by a bank, confirm that the development has been approved by the financier and that the lender has a disbursement schedule that is linked to construction milestones.

Reviewing the Sale Agreement

The sale agreement is the primary document governing the off-plan purchase and should be reviewed by an independent advocate before it is signed. Particular attention should be given to the specification and plan attached to the agreement (to confirm what exactly is being purchased), the payment schedule (to ensure it is linked to construction milestones rather than arbitrary dates), the long-stop completion date and the developer’s obligations if that date is missed, the mechanism for handling variations and the process for snagging and final inspection before handover. An agreement that contains no completion date, no delay remedy and no specific description of the unit is a significant warning sign.

Advantages of Investing Off-Plan in Kenya

Financial Benefits of Off-Plan Property

Buying off-plan typically means purchasing at launch prices set before construction cost escalation is reflected in the asking price. Developers rely on early sales to secure development finance, and the price concession they offer to early buyers — often five to fifteen percent below the anticipated completion-stage value — compensates the buyer for bearing construction and delivery risk. Where a project completes on programme and the broader market holds steady, buyers who entered early often benefit from an uplift that exceeds what a secondary-market purchase of a comparable unit would have generated in the same period. Some projects also allow staged payment plans, reducing the demand for a lump-sum payment at exchange and giving buyers time to arrange finance.

Customisation and Unit Selection

Early-stage purchases frequently give buyers the right to choose their unit position within the development — selecting a preferred floor, aspect or corner unit — and, depending on the developer’s specification, to make finish selections for kitchens, bathrooms and flooring. This degree of customisation is not available to buyers of completed units on the secondary market, and for buyers who intend to occupy the property it can be a significant advantage. The caveat is that the agreed specification should be set out in detail in the sale agreement, with a specific remedy if the developer delivers a unit that does not match it.

Risks to Understand Before Buying Off-Plan

Market Fluctuations and Completion Delays

The principal risk of an off-plan purchase is that the project is not completed on time, or is not completed at all. Construction programmes routinely overrun for reasons ranging from contractor performance to financing gaps to regulatory delays in obtaining occupation certificates. A buyer who paid a deposit expecting completion in eighteen months may find themselves without a unit two or three years after the expected date, with capital tied up and no return. Sale agreements should include a longstop date after which the buyer can rescind and recover their payments, and a damages regime for delay short of rescission.

Developer Reliability and Project Risk

Developer insolvency is a real risk, and it is particularly acute in a market where pre-sale proceeds are commingled with the developer’s general working capital rather than held in escrow. Before committing, buyers should review the developer’s track record on completed projects, assess the planning and building approvals in place, confirm that the development is funded to completion or has a credible funding plan, and — where the land is held on a long lease — verify the unexpired term and the consents needed for development. A well-advised buyer will also require a performance bond or bank guarantee as security for the developer’s obligations during the construction period.

Financing Your Off-Plan Purchase

Payment Plans and Staged Deposits

Most Kenyan off-plan developers offer structured payment plans rather than requiring full payment at exchange. A typical plan might require a booking fee (five to ten percent) to reserve the unit, followed by staged payments during construction tied to specified milestones, with the balance payable on or before handover. Buyers should ensure that the payment schedule in the sale agreement matches what was represented in the marketing material, and that the milestone descriptions are clear enough to be objectively verified. Where payments are substantial and development risk is significant, it is worth requesting that deposits be held in an escrow account operated by a neutral third party rather than by the developer directly.

Mortgage Finance for Off-Plan Units

Kenyan banks do not typically release mortgage funds against an uncompleted structure; most will only lend against a unit once it has been physically completed, an occupation certificate has been issued and the title is in a form suitable for registration of the charge. This means that buyers who intend to fund their purchase with a mortgage will need to cover the construction-period payments from their own resources and draw down the mortgage only at or near handover. Some developers have pre-arranged financing with specific banks and can facilitate introductions, but buyers should obtain independent mortgage advice before relying on developer-directed finance.

Key Legal Considerations in Off-Plan Deals

Off-plan transactions in Kenya sit at the intersection of contract law, land law and real estate regulation, and buyers who approach them without legal advice regularly discover at the point of handover — or after a project stalls — that their agreement did not adequately protect them. The sale agreement is the core document: it must identify the unit precisely (by floor plan reference and site plan), describe the finish specification in detail, set a completion date with a longstop and a delay remedy, provide for an independent snagging inspection before final payment, and include a clear mechanism for title registration in the buyer’s name following completion. Where the land is subject to a charge in favour of the developer’s financier, the agreement must address discharge of that charge upon payment of the purchase price.

For apartment developments, the future governance structure — the management corporation, the service charge regime, the rules for the scheme — should be disclosed to buyers before exchange, because these ongoing obligations attach to ownership of each sectional title unit. OLM Law reviews off-plan sale agreements for buyers and developers, advising on risk allocation, title structure and the protections buyers should insist on before any funds change hands.

Frequently asked questions

What does buying off-plan actually mean?

You commit to buy a unit — typically an apartment — before or during construction, paying a deposit and then instalments linked to building milestones. You take possession and title only once the project is complete and the relevant titles are issued.

What are the main risks?

Delay in completion; abandonment or non-completion; changes to the size, finishes or layout you were promised; the developer’s financial failure; and title not issuing because the developer’s own title or approvals were defective. Off-plan concentrates risk in the developer’s performance, which is why the diligence matters far more than the brochure or the show unit.

Is off-plan regulated by a specific law in Kenya?

There is no dedicated off-plan statute or specialist regulator. The transaction is governed by general contract law, the land statutes, the Sectional Properties Act 2020 for titling of units, and consumer-protection principles. That absence of a bespoke regime is precisely why the contract has to do the heavy lifting on buyer protection.

What due diligence should I do on the developer and the land?

Confirm the developer holds good title to the land through an official search; check that the development has the required county planning and building approvals and NEMA environmental approval, and that the contractor is registered with the National Construction Authority; review the developer’s track record on previous projects and whether they were delivered on time; and, where the land is charged to a financier, understand exactly how and when your unit will be released from that charge.

How is my payment protected?

Through the structure of the sale agreement. Tie instalments to verified construction milestones rather than calendar dates; negotiate refund or exit rights if milestones slip badly; and, where possible, arrange for payments to be held or staged so they are not simply at the developer’s free disposal. A project-account or escrow-type arrangement, where available, is far safer than paying directly into the developer’s operating account.

This kind of escrow account for off-plan property in Kenya, where a bank or an independent stakeholder holds funds and releases them against verified milestones, is the single strongest protection a buyer can negotiate, and we ask for it as standard when we review off-plan sale agreements.

How will I get title to an apartment?

For multi-unit developments, individual ownership is typically granted as a sectional title under the Sectional Properties Act 2020 and the Sectional Properties Regulations 2021, which allow each unit to hold its own title with shared ownership of the common areas managed through a corporation. Older developments may still use long-term subleases pending conversion. The agreement should commit the developer to procure and deliver your sectional title.

What is a sectional title in Kenya?

A sectional title is the form of ownership the Sectional Properties Act 2020 created for individual units in a multi-unit development such as an apartment block. It lets a buyer hold a registered title to their specific unit while owning an undivided share of the common areas, such as corridors, lifts and parking, through a corporation made up of all the unit owners. Before the Act, individual apartment owners typically held long leases rather than a title of their own, which is why confirming that a development will deliver a proper sectional title, rather than a long sublease, is a core part of off-plan due diligence.

What should the sale agreement contain?

At minimum: the price and a payment schedule tied to milestones; the unit’s specification and floor area; the completion date and clear remedies for delay; confirmation of the developer’s title and approvals; the mechanism and timeline for issuing your title; refund and termination rights if the project fails; provisions on snagging and defects; and a dispute-resolution clause.

Can I get my money back if the project stalls?

Only to the extent your agreement provides for it. Recovering money from a stalled or insolvent developer without clear contractual refund and termination rights is difficult and slow, which is exactly why those clauses must be negotiated before signing rather than assumed.

What happens if the finished unit differs from what I was promised?

Your remedy depends on the contract. A well-drafted agreement fixes the specification and floor area and gives you rights — price adjustment, rectification or exit — if the developer delivers something materially different. Without those terms, a buyer’s position is weak, so the specification should be pinned down in writing, not left to the brochure.

Is off-plan cheaper than buying a completed unit?

The headline price is often lower and payment is spread over construction, but the discount is compensation for taking construction and completion risk. It should be weighed against that risk, not treated as free value.

Should I involve a lawyer before paying a deposit?

Yes — the deposit stage is when your protections are set or lost. An advocate verifies the developer’s title and approvals, confirms how your title will issue, and negotiates the agreement so your money and your unit are protected before you commit a shilling.

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Buying a completed property instead? See our Buying Property in Kenya: FAQ and our step-by-step Land Buying in Kenya: Title Search, Due Diligence & Transfer Process guide.

Speak to Our Real Estate & Property Team

Our real estate team advises off-plan purchasers on developer due diligence, sale agreements, deposits and purchaser protections.

For any enquiries on this or any other matter, do not hesitate to contact us via email at [email protected].

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Disclaimer: This article has been prepared for informational purposes only and is not legal advice. This information is not intended to create, and receipt of it does not constitute a lawyer-client relationship. Nothing in this article is intended to guarantee, warranty, or predict the outcome of a particular case and should not be construed as such a guarantee, warranty, or prediction. The authors are not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this article and in no event shall be liable for any damages resulting from reliance on or use of this information. Readers should take specific advice from a qualified professional when dealing with specific situations.