A land sale agreement is where a property transaction becomes legally binding. Once it is signed, the buyer's money and the seller's land are tied to its terms. If it is vague, one-sided or silent on what happens when something goes wrong, both parties can find themselves in a dispute that lasts far longer than the transaction should have.
This guide explains the key clauses in a Kenyan land sale agreement and what buyers and sellers should look for in each.
Why the agreement must be in writing
Under the Law of Contract Act, a contract for the disposition of an interest in land must be in writing, signed by the parties and attested by a witness to be enforceable. An oral promise to sell land — or a deal recorded only in text messages — will usually not be enforced. A properly drafted written agreement is therefore not a formality; it is the foundation of the transaction.
The agreement should only be signed after the buyer has completed due diligence. Our property due diligence checklist explains what to verify first.
The key clauses
1. Parties and property
The parties should be named exactly as they appear on their national IDs, passports or certificates of incorporation, with their KRA PINs. The property should be described by its title or parcel number, size and location. For apartments, the unit, floor and parking or storage allocations should be specified.
2. Price and payment schedule
The agreement should state the price and exactly how and when it will be paid — deposit, any instalments and the balance on completion. Payments should be made to the advocates' client accounts, not to individuals or agents.
3. The deposit
The deposit is the most frequent source of disputes. The agreement should say:
- how much it is;
- who holds it — ideally the seller's advocate or another advocate as stakeholder, not the seller personally;
- when it can be released to the seller; and
- when it must be refunded to the buyer.
4. Title and warranties
The seller should warrant that they are the registered owner, that the title is free from encumbrances other than those disclosed, that there are no pending disputes or claims, and that rates and rent are paid. These warranties give the buyer a remedy if they prove untrue.
5. Conditions precedent
Some things must happen before completion: discharge of an existing charge, removal of a caution, Land Control Board consent for agricultural land, spousal consent, or a lender's approval of the buyer's mortgage. The agreement should list each condition, who is responsible for it and the deadline.
6. Completion
The completion clause states the completion date and what each party must deliver. The seller typically delivers the original title, the executed transfer, consents, rates and rent clearances, identity and tax documents, and vacant possession if agreed. The buyer pays the balance.
7. Stamp duty, costs and apportionments
The agreement should state who pays stamp duty, registration fees and each side's legal costs, and how rates, rent and service charges will be apportioned at completion.
8. Possession and risk
When does the buyer take possession, and who bears the risk of damage before completion? If the buyer takes possession early, the terms should be clear.
9. Default and termination
This is the clause that matters most when things go wrong. It should say what happens if:
- the buyer fails to pay on time — for example, notice to complete, interest and forfeiture of part of the deposit; or
- the seller fails to complete — for example, refund of the deposit with interest, costs, or the buyer's right to seek completion.
Notice periods and procedures should be clear, so that neither party can terminate unfairly.
10. Dispute resolution and governing law
The agreement should state how disputes will be resolved — negotiation, mediation, arbitration or the courts. Land disputes are heard by the Environment and Land Court, but many contractual disputes can also be resolved through arbitration if the parties agree.
Off-plan sale agreements
Buying off-plan adds further issues. The agreement should address the developer's title and approvals, construction milestones, the payment schedule linked to those milestones, what happens if construction is delayed, the specification of the finished unit, the sectional title process under the Sectional Properties Act 2020, and the management company and service charges.
Common mistakes
- Signing before searches are complete.
- Paying the deposit directly to the seller or an agent.
- Vague completion dates and no notice-to-complete procedure.
- No conditions for consents, leaving the buyer exposed if consent is refused.
- Default clauses that favour only one party.
For an overview of how the agreement fits into the wider transaction, see our guide to conveyancing in Kenya.
Who should take advice
Both buyers and sellers should have their own advocates. The seller's advocate commonly prepares the first draft; the buyer's advocate reviews it and negotiates changes. Developers selling multiple units benefit from a robust standard agreement reviewed against current law.
A practical illustration
This example is illustrative only. It does not describe a real client or matter.
A buyer signs a sale agreement drafted by the seller's advocate. It requires a 30% deposit paid directly to the seller, sets no deadline for the seller to discharge an existing bank charge, and allows the seller to terminate and keep half the deposit if the buyer is late with any payment.
The seller's bank takes months to release the title, and completion is repeatedly delayed. When the buyer's own mortgage approval expires, the seller claims the buyer is in default.
A balanced agreement would have required the deposit to be held by an advocate as stakeholder, made discharge of the charge a condition with a long-stop date, and given both parties a fair notice-to-complete procedure. Those clauses are routinely negotiated before signing.
Key takeaways
- A contract for the disposition of an interest in land must be in writing, signed and witnessed.
- The deposit, conditions, completion and default clauses cause most disputes.
- Make consents and discharges conditions of completion, with clear deadlines.
- Ownership passes only on registration of the transfer.
How WTT Lichuma can help
Our conveyancing and real estate practice prepares and negotiates sale agreements for buyers, sellers and developers, and carries the due diligence findings into the contract. For commercial transactions involving land, our contract advisory team also reviews related agreements such as joint ventures and financing terms.
Frequently asked questions
Is a land sale agreement valid if it is not witnessed?
The Law of Contract Act requires a contract for the disposition of an interest in land to be in writing, signed by the parties and attested. An agreement that does not meet these requirements may not be enforceable.
Who should hold the deposit?
Ideally an advocate, as stakeholder, under clear written terms on when it is released or refunded.
Can a buyer get the deposit back if the seller fails to complete?
Usually yes, depending on the agreement's default provisions, which often also allow interest and costs.
Does the sale agreement transfer ownership?
No. Ownership passes only when the transfer is registered at the land registry.
To review or prepare a sale agreement, contact our property team.
This article is general information on Kenyan law at the date of publication. It is not legal advice for your situation, and reading it does not create an advocate–client relationship. Speak to an advocate before acting on it.