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Kenya :You can repossess your property if buyer defaults

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An apartment block in Kiambu. The law allows a seller to repossess a house should the buyer default.

An apartment block in Kiambu. The law allows a seller to repossess a house should the buyer default.

I entered into a written agreement with a person who was interested in buying one of my apartments in Nairobi. We signed a sale agreement before mutually agreeing to have one lawyer to witness the document. As per the agreement, the buyer was to pay a Sh5 million deposit and the balance in installments within 90 days.

However, the buyer has since stopped paying the installments as agreed. My attempts to seek an amicable settlement with him have hit a snag as he never answers my phone calls. Is there a way I can have my property back as the payment made so far is not even half of the sale price?

Shem, Nairobi

You can legally repossess the house after the buyer has defaulted on payment as mutually agreed in the sale agreement.

According to Section 39 of the Land Act, sellers can invoke their right to cancel a written agreement over breach of contract by the purchaser.

The seller can either reclaim possession of the property on mutual agreement or obtain a court order before moving in.

Before regaining possession, you must give a notice informing the purchaser of the nature and extent of his or her breach of agreement.

You as the seller also have the option of seeking — through a court order — financial compensation for default as stipulated in the sale agreement.

However, there are legal requirements that must be fulfilled before reclaiming the property. For instance, the sale agreement must not only have been in writing but signed by both parties and the signatures attested to by a witness who was present during the signing.

A sale agreement is recognised as a legal document and bears the buyer’s and seller’s full names, national identity card numbers and postal addresses.

Other details include names of registered law firms representing the parties, physical location, size and price of the property in question.

Normally, there is a paragraph that states that the purchaser has inspected the property and buys it with full knowledge of its state and condition.

Further, the agreements have several other clauses but those that often elicit disputes when omitted are those on completion, disclaimer and forfeiture. There could be instances where the seller repossesses the property and does not refund the money earlier paid as deposit, if there was a forfeiture clause.

Majority of forfeiture clauses in property sale agreements stipulate that the purchaser loses the money paid as deposit if they default on payment. Prospective investors have lost fortunes over failure to abide by written contracts. Traditionally, most courts abide by the written contracts signed by both parties when property transactions turn sour.

— The writer is an advocate of the High Court.

 

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