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Business Laws (Amendment) Act, No 1 of 2020

Business Laws (Amendment) Act, No 1 of 2020

The Business Laws (Amendment), No 1 2020 (the Act) came into operation on 18th March 2020. The Act amends 16 laws and is aimed at enhancing the ease of doing business in the country. We will however limit this alert to the changes made to laws touching on conveyancing and real estate particularly the Land Registration Act, 2012 (LRA), the Stamp Duty Act Cap 480 (the SDA), the Survey Act Cap 299 (the Survey Act), the National Construction Authority Act, 2011 (the NCA Act) and the Registration of Documents Act Cap 285 (the RDA) (the amended statutes together as the Amended Statutes).

Below is a highlight of how the changes made by the Act will impact the conveyancing process in the country.

(a) Electronic Signatures

(i) The Act has amended sections 2, 44 and 45 of the LRA to allow the use of electronic signatures in execution of instruments relating to disposition of land. The Act has deleted section 83B (1) of the Kenya Information and Communication Act Cap 411A which restricted the use of electronic signatures to sign documents of title.
(ii) Additionally, the amendments in the LRA have provided for electronic sealing of instruments relating to disposition of land. The amendment has also empowered the Registrar of Lands to dispense with the requirement for verification required of the signature in an instrument relating to disposition of land if the instrument has been electronically processed and signed by the respective parties.
(iii) The Act amends RDA to allow a party to sign any of the documents required to be registered under the RDA by way of an electronic signature.
(iv) The Act amends the Survey Act to allow for electronic signing of survey plans.

(b) Electronic filing of documents

(i) The Act amends the RDA to allow a registrant of documents under RDA to electronically file the document for registration.
(ii) The Act amends the Survey Act to allow survey plans to be processed electronically and for survey plans, field notes and computations to be delivered electronically.

(c) Electronic registers

The Act has also amended the RDA to empower the Registrar of Documents to maintain the Principal land registries in Nairobi and Mombasa in electronic form. This amendment will facilitate the ongoing endeavours to digitize land transactions.

(d) Electronic stamping of documents

It is also noteworthy that the SDA as well has been amended to include electronic stamping thus dealing with the inconvenience caused while trying to get documents physically stamped/franked (we will notify you once the same has been rolled out for use).

(e) Enforcement of building codes in the construction industry

The NCA Act has been amended by inserting the word “building code” (a building code provided under the regulations to the NCA Act) in the definition section. The Act further modifies the functions of the National Construction Authority to include enforcement of the building code in the construction industry. The Act further provides for the undertaking of mandatory inspections by the Authority.

(f) Removal of requirement to provide land rent and rate clearance certificate when vesting an interest in land

The Act further deletes section 38 and 39 of the LRA. The effect of the deletion is that one will no longer be required to provide land rent and rates clearance certificates respectively to the registrar of lands before any interest in land is vested. It also means that the Registrar will no longer require confirmation of consents affecting any disposition of land from the National and County governments respectively. It is however prudent for would be purchasers to ensure there are no pending land rates and rent with the respective county or government offices to avoid inheriting the same.

The Act further amends section 83 of the LRA by providing that any person claiming for indemnity for any damage arising from the rectification of the register or any error or extract from the register, will now be required to write to the Chief Land Registrar for investigation and consideration.

If you have any inquiries relating to the above or land transactions generally, do not hesitate to contact Dennis Muhindi on dmuhindi@mwc.legal.

Please note that this e-alert is meant for general information only and should not be relied on without seeking specific subject matter legal advice.

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