PROVISIONS /CLAUSES A GOOD PROPERTY/LAND PURCHASE AGREEMENT OF ANY LAND TRANSACTION SHOULD CONTAIN IN KENYA
Law applicable
- CONSTITUTION OF THE REPUBLIC OF KENYA
- REGISTRATION OF TITLES ACT
- CONTRACT ACT
- LAND laws
- COMPANIES ACT 2015
- Among others depending on the circumstances.
- Assuming you are moving in to have the transaction executed, the provisions/clauses below are very important among others and as such you need to agree on them
- A well drafted Sales or property purchase agreement saves parties from unnecessary conflicts.
- For anyone to have a good sale/purchase agreement he or she must know the subject matter in and out, this in most cases is achieved through due diligence before the transaction itself which most people ignore either because one does not want to incur associated costs or he /she does not understand what it means .
- Due diligence is a process of acquiring objective and reliable information, prior to a specific a final decision. It is usually a systematic research effort or investigation, which is used to gather the critical facts and descriptive information which are most relevant to the making of an informed decision on a whether one should go in for the particular transaction or not and if he or she goes into it ,how should it be done?.
- Due diligence always helps parties to have informed decisions which facilitates framing their terms and conditions touching the agreement.
- It is not advisable to purchase any property in Uganda without conducting due diligence however much it might be expensive please do it, it is worthy
- Whenever you are drafting any sale land or property agreements in Uganda always look at the past, current and future interests of the parties touching the intended properties.
A good property purchase Agreement should have the following clauses.
- TITLE CLAUSE. This clause provides the agreement with name that identifies it from others
- INTERPRETATION CLAUSE. This provides for all the definitions /meaning or and descriptions of the words / phrases /terminologies used in that particular agreement or contract.
- RECITALS CLAUSE. This provides for the preamble of the agreement wherein you should indicate who parties are, what parties are up to, how parties have conducted themselves before and at the time of the agreement, when the parties intentions are due.
- A HEADING CLAUSE. This provides for what the transaction is,ie sale of land agreement or purchase of a residential house among others.
- SUBJECT MATTER CLAUSE, This clause defines the particulars of what property.
- DESCRIPTION OF THE SUBJECT MATTER CLAUSE. this clause goes ahead to describe what parties are dealing in that it will show the size ,how it looks, the particulars among others
- PURPOSE CLAUSE. This provides for why parties are having this particular sales or purchase agreement
- PARTIES AND THEIR CAPACITIES CLAUSE. This clause defines the parties and their capacities in which they are executing the sale or purchase agreement
- DATE CLAUSE. This clause indicates the dates of the sales agreement
- JURISDICTION CLAUSE, This clause indicates where the sales or purchase agreement is executed and also enforced incase of any breach
- PRICE CLAUSE. This indicates the price at which the property is purchased or consideration
- MODE OF PAYMENTS CLAUSE. It indicates how payments of the purchase price are to be effected.
- PAYMENT TERMS CLAUSE. It spells out what, when to pay the purchase price and incase of payment default what happens.
- TRANSFER OF RIGHTS AND OBLIGATIONS/ASSIGNMENT CLAUSE. it indicates whether this sales agreement can be transferred to somebody else who can assume rights and obligation therein
- RESPONSIBILITIES AND RIGHTS OF PARTIES It defines what parties to the sale agreement are required of and their entitlements.
- COOPERATION AND IMPLEMENTATION CLAUSE. It provides for parties to cooperate for purposes of executing the terms of the sale agreements
- COSTS CLAUSE, It spells costs and who meets them
- POSSESSION CLAUSE, It spells out at what stage does control or occupation of the purchased property should exchange among or between the parties
- ACCESS CLAUSE. It spells out whether and how either party is allowed to access the property
- PASSING OF PROPERTY CLAUSE. It spells out at what stage does ownership of the land or sale shift to the purchase.
- DISPUTE AND ARBITRATION. CLAUSE, It provides for how disputes touching the sale should be addressed before resorting to courts of law/
- INDEMNITY/ COMPENSATION CLAUSE. It provides for compensation in case of any loss resulting from the sale as a result of breach of the sales agreement
- TIME FRAME /TERM This provides for the period within which the sale agreement should be concluded that is the time each party should execute his or her duties
- CONFIDENTIALITY CLAUSE. This provides for keeping any information touching the sales agreement from third parties
- AMENDMENT CLAUSE. This provides how parties to the sales agreement may be change then terms touching the agreement
- NOTIFIACTION CLAUSE. This provides for how parties should notify each other on any developments touching the said land
- CHANGE OF ADDRESS This provides for how the address touching the sale agreement can be done
- BREACH CLAUSE. This provides for what happens in a case of any breach touching the sales agreement
- TERMINATION CLAUSE, This provides for how the parties to sale agreement should terminate sales agreement.
- FORCE MAJEURE What happens to the rights and obligations of parties should something beyond their control prevent them from meeting the part of the bargain.
- LAWS APPLICABLE It provides for which laws are to be applied in resolving the legal issues surrounding the sales agreement.
- LOCATION OF EXECUTING THE CONTRACT CLAUSE. It provides for where the sales agreement is being executed
- SIGNATURES AND WITNESSES CLAUSE, It provides for signatures on the agreement.
- OTHERS CAN BE INCLUDED DEPENDING ON THE CIRCUMSTANCES
- approximate cost drafting is 5% of the total value but not less than ksh 100,000
Author is A regional transactions legal consultant (ADVOCATE) at NOA REGIONAL ASSOCIATED ADVOCATES AND LEGAL CONSULTANTS
Email address: onlinetransactionconsultancy@gmail.com.
contacts +250787311255,+256788105242,+256782105042
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NOTE: whereas the author has made necessary efforts to ensure the accuracy of
this post, it is not intended to provide specific legal advice to a particular
individual as individual situations may differ.
For specific technical / legal transaction advice on this subject matter and related subject, you may contact the author at online consultancy fee, or contact any transaction legal consultant of your choice.
For avoidance of impersonation, all email correspondences/communication from me to you must be followed up with a phone call on the above mobile number to verify the contents of replies from my email account pertaining a given subject matter..
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