The Key Aspects Of Extension And Renewal Of Leasehold Titles In Kenya

Renewal and Extension of leases are two terms that are often confused by most people in that some mainly interpret them to refer to the same thing, however, there is a difference between the two.  

Both these processes are governed mainly by the Constitution of Kenya 2010, the Land Act, 2012 & the Land (Extension and Renewal of Leases) Rules 2017, the Land Registration Act 2012, and the Physical and Land Use Planning Act among other laws.  

This article will tackle the major differences between the two and other prevailing aspects of both processes. 

1. What is the major difference between Extension and Renewal of Lease? 

Renewal of Lease – Refers to the process of applying for and being granted a     new lease upon the expiry of a leasehold term.  In short, it implies that the leasehold term has already expired and hence one has to seek for renewal of the leasehold term with the relevant authorities. 

Extension of Lease – On the other hand, extension of lease refers to prolonging (extending) the duration of a lease from the original term. The application is made during the subsistence of the lease before its expiry, the Process of Renewal of Leasehold Titles  

Section 13 of the Land Act, 2012 requires the National Land Commission (NLC) to notify the registered owner (lessee) within Five(5) years of the impending expiration date of the lease. Failure by the lessee to respond to the notification within 1 year empowers the Commission to publish the notification in two newspapers of nationwide circulation and requires the lessee to respond to the notification within Six(6) months from the date of the publication.  

If the Lessee fails to respond to the newspaper publication, the Commission will proceed to undertake a physical verification of the land to establish if the lessee is still in occupation of the land.   However, there may be instances where the Commission is unable to notify all lessees nationwide. In such cases, lessees are required to initiate the lease renewal process on their own account. 

2. The process involved in applying for renewal of leasehold terms is as follows:- 

1. Engagement of a licensed physical planner to apply for the requisite approvals from the relevant County Government where the land is located.  The planner submits the application together with a duly executed planning brief notice on at least two local dailies of nationwide circulation, Notice on-site, Notice of public participation (where applicable), and any other document that the County may require to process the approval. Once the application is approved, the physical planner will be issued with a document referred to as PPA2. (Notification of approval of development permission).  
2. Once the county gives its approval, the said documents together with the duly executed Planning Brief (in triplicate) are submitted to the National Land Commission(NLC). This process involves seeking letters of no objection to the  
3. Once NLC has issued its approval, the next step is to engage a licensed surveyor to resurvey the property. 
4. The  NLC also reviews and enhances the ground rent for the property in question, and thereafter shall issue a letter confirming the new enhanced ground rent.  
5. Issuance of an  allotment letter, by the National Land Commission  
6. The final step is the preparation, registration, and issuance of a new lease and title document reflecting the new term by the Ministry of Lands. 

 3. Process of Extension of Leasehold Titles 

The process of applying for an extension of a lease is almost similar to that of renewing a lease however, it is worthwhile to note that, the Ministry of Lands is the one that is primarily involved in doing the bulk part of the process, although one may still seek approvals from NLC where applicable.  

    The process involved is  as follows: 

1. Engagement of a licensed physical planner to apply for the requisite approvals from the relevant County Government where the land is located.  The planner submits the application together with a duly executed planning brief notice on at least two local dailies of nationwide circulation, Notice on-site, Notice of public participation (where applicable), and any other document that the County may require to process the approvals. 
2. Once the PPA2 Forms are obtained, the said documents  together with the duly executed Planning Brief (in triplicate) are submitted to the director of land administration/respective county land administrator for approval; 
3. Thereafter, a circulation letter by the director of land administration/respective county land administrator is issued for purposes of seeking comments from the director of physical planning  and surveys/or the respective county physical planner/survey (properties based out of Nairobi County) to secure issuance of letters of no objection by the director of physical planning and surveys;  
4. Issuance of the provisional approval of  the extension of the lease by the director of land administration    
5. The property is then resurveyed and a new RIM is prepared by a Licensed surveyor; 
6. Revaluation of the property is undertaken to enhance ground; 
7. Issuance of the final approval of  the extension of the lease by the director of land administration  
8. Preparation of surrender and issuance of new lease reflecting the new term is undertaken by an advocate;  
9. A new title instrument reflecting the new leasehold term is then issued.  

 4. When is the most appropriate time to seek for Extension of a Leasehold Term?

It is advisable to undertake the extension of the Lease Five (5) years prior to the expiration of the term instead of waiting for the term to expire.  

In fact, the Guidelines for the Extension and Renewal of Leases (the Guidelines) under Gazette Notice Number 5734 of 2017 stipulates that the National Land Commission (NLC) shall notify the Lessee within five years before the expiry of a lease of the impending expiration and the lessee’s pre-emptive right to apply for the extension of the lease.  

5. Are there instances, whereby one may apply for an extension before the expiry of 5 years? 

Although most Leasehold titles are mainly renewed Five (5) years prior to the expiration of the term, there are instances that may require one to renew the term before then, especially where a developer is undertaking the construction of multi-complex developments such as residential /commercial units.  In such cases, if a developer intends to use their property as collateral to secure funding from a financial institution for development purposes, banks shy away from accepting a charge on a leasehold title with less than 45 years remaining.  

Contact Persons & Contributors 

Jane MUGO (Partner ) Law Unit -Email: jmugo@cmadvocates.com 

Cynthia N.  KITOLO (Associate  Advocate )-Email: ckitolo@cmadvocates.com 

Wahu WAMBUGU (Lawyer)-Email: mwambugu@cmadvocates.com 

CONCLUSION 

It is worth mentioning that, following the introduction of the Ardhisasa digital online platform some Renewal/Extension of Lease applications have to be submitted through the said platform upon obtaining the relevant approvals from the relevant County Government.  

Please Get in touch with us today for: 

• Comprehensive Advisory with respect to the Renewal and Extension of Leasehold Titles in Kenya 
• Matters relating to Environmental and Land Law; and  
• Any other Land related information.  

For any inquiries on this or any other land-related matter do not hesitate to contact our Real Estate, Banking, and Finance Law practice group through our email, rbf@cmadvocates.com  or book a virtual consultation here https://cmadvocates.com/cm-request-consultation/. 

Disclaimer 

This article is for informational purposes only and should not be construed as legal advice