THE SHIFT FROM MANUAL TO ELECTRONIC LAND TRANSACTIONS

Introduction

The intent to conduct conveyancing transactions electronically, dates back to mid-2019 when the Cabinet Secretary responsible for Lands and Physical Planning (the Cabinet Secretary) published, on 28th June, 2019, the Land Registration (Electronic Transactions) Regulations 2019. However, the said Regulations were later annulled by the National Assembly on the grounds that the Cabinet Secretary did not consult the public, prior to the publishing of the Regulations, as per the requirement of Section 5 of the Statutory Instruments Act, 2013.

With the annulment of the Regulations, the players of the conveyancing world regressed to the usual manual conduct of conveyancing transactions. It is not until the outbreak of the Covid-19 pandemic and the restrictions that have been unswervingly issued to contain the spread of the virus, that the conversation for the conduct of land transactions through the electronic platform was revisited. Consequently, the fruits of this conversation was the publication, by the Cabinet Secretary; the Land Registration (Electronic Transactions) Regulations, 2020, the Land (Amendment) Regulations, 2020, the Survey (Electronic Cadastre Transactions) Regulations, 2020 and the Survey (Amendment) Regulations, 2020 all with the objective to create an enabling environment for conduct of land transactions electronically.

Key to note, the electronic conveyancing transactions are intended to, in the first instance, be executed in the Nairobi Land Registry.

The following is an analysis of the main provisions of the above-mentioned regulations.

  1. Development and Implementation of a National Land Information system

 The regulations provide that as per the provisions of Section 6(h) of the Land Act, 2012, the Cabinet Secretary shall coordinate for the development and implementation of a National Land Information System.

  1. Establishment of an Electronic Land Registry

The Chief Land Registrar shall maintain an Electronic Land Registry in accordance with section 7 of the Land Act, 2012, which shall be part of the National Land Information System (NLIS). In the electronic land registry, there shall be:

  • A land register that shall contain the property section, proprietorship section, encumbrance section, and user of land;
  • A cadastral map;
  • An index of names of proprietors;
  • A presentation book in which there shall be kept a record of all applications numbered in the order in which they are presented to the registry; and
  • Parcel files containing the instruments and documents that support subsisting entries in the land register.
  1. Establishment of an Electronic Cadastre

The Director of Surveys shall maintain an electronic cadastre which shall be a module of the National Land Information System. Consequently, the Director may by electronic means send a duly issued or certified map, plan, form, document or extract of a map to a user who has requested for the same through the system.

  1. Registration of User/ Authorized User on the National Land Information System

In essence, for persons to be able to conduct the land transactions electronically, they shall be required to register on the National Land Information System as a user or an authorized user using their credentials as is appropriate.

A user shall be a person registered in an individual capacity for example as the Vendor or Purchaser in a conveyancing transaction. On the other hand, an authorized user shall be a qualified advocate granted permission by a Vendor or Purchaser to access, query any information, or submit any application, instrument or document in relation to a transaction on behalf of that person

  1. Conveyancing Services to be Electronically Accessible Through the System

The regulations are structured to facilitate online accessibility of pre-registration, registration and post-registration conveyancing services.

Following are the specific services that will be available through the system:

5.1 Searches

A user or an authorized user who intends to conduct an official search in the electronic register shall apply to conduct the official search through the system and pay the prescribed fees.

The user may specifically undertake to conduct either:

a. Current status search – this is a search on the particulars of the subsisting entries in the electronic register, including request for certified copies of any document, the cadastral map or plan filed in the register; or 

b. Historical search – this search shall provide a history of all transactions over a specific property, in a chronological order and stating the status and date of entry of each transaction.

5.2 Electronic Lodging and Registration of Conveyancing Related Applications, Instruments and Documents

The regulations provide that registered users shall electronically lodge: applications for change of user, consents to transfer, sub-lease or charge, valuation and payment of stamp duty, payment and issuance of a land rent clearance certificate and extension and renewal of leases; conveyancing instruments and documents to the National Land Information System. The lodging of the aforementioned applications, instruments and documents shall be accompanied with the prescribed fees and shall be deemed to be received when the system generates a notice of electronic filing with a tracking number for the electronically filed application, instrument or document.

In order to facilitate the electronic lodging of the applications, instruments or documents, the regulations provide for the use of e-signatures and e-forms, specifically, the Chief Land Registrar may make modifications to the prescribed forms set out in the Sixth Schedule to the Land Registration (General) Regulations, 2017. Additionally, where a transaction cannot be carried out using the electronic registration system, the person seeking to carry out the transaction shall carry out the transaction through such other means as the Chief Land Registrar may determine including manually as is/has been the case. Noteworthy, users of the system will still manually present documents which the Registrar requires the production of an original.

The Registrar may reject an application, instrument or document that appears to be substantially defective or have been submitted without the requisite supporting documents under the Land Registration (General) Regulations, 2017. A user or an authorized user whose application has been rejected shall be required to lodge the application afresh or in the alternative appeal to the Registrar.

The registrar shall handle a lodged application, instrument or document in the order of the tracking number assigned at the time of lodging and shall rely on documentation and data available within the system and where necessary may refer to manual records.

Upon successful registration of an application, instrument or document there shall be an electronically generated notice to that effect. The registered instrument, document or electronic Certificate of Title or Lease shall be available for download by the authorized user.

Noteworthy, the electronically generated certificate of title or lease shall contain unique serial number and security features that can be used to verify the authenticity of the certificate.  

  1. Security of information in the National Land Information System

The regulations provide for obligations of both the Users of the system and the Ministry of Lands and Physical Planning to ensure that they observe security measures in exchanging, handling and storing information in the National Land Information System.

Foreseeable Challenges

It is likely that the implementation of the regulations will face some challenges that need to be addressed for electronic conveyancing transactions to be undertaken seamlessly. Such challenges include:

  • susceptibility of the NLIS to emerging trends in cyber-crimes and hacking;
  • authentication issues as a result of fraudulent creation/use of user accounts, e-forms/documents and digital signatures;
  • technological illiteracy that may necessitate laymen to engage experts and hence costly;
  • lack of accessibility to (stable and fast) internet;
  • general mistrust of the use of technology and disclosure of personal information (and documentation such as title documents) which may hinder transactions; and
  • lack of capacity to adapt to the ever-changing technology.

Conclusion

The main objective of the Regulations is to give effect to the provisions of the Land Act, 2012, the Land Registration Act, 2012, with regard to the development and implementation of an efficient and effective National Land Information System as well as see to the maintenance of an electronic land registry and electronic cadastre  in a secure, accessible and reliable format. The implementation of the Regulations will undoubtedly foster e-commerce though the conduct of conveyancing transactions electronically which will ultimately ease the doing business by cutting time and costs for property registration, see to a reduction of the usual paper work and manual records and establish an electronic payment system.

The ball is on the Ministry of Lands and Physical Planning court to liaise with other key stakeholders to ensure a score in the implementation of the Regulations and thus sow the intended benefits.

This alert is for informational purposes only and should not be taken to be or construed as a legal opinion. For further clarification, please do not hesitate to contact Jane Makena Kirimi (jkirimi@jmkadvocates.co.ke) or Jacklyne Kanu (jkanu@jmkadvocates.co.ke).