Property Acquisition in Kenya: Risks, Rights, and Legal Pathways for Non-Citizens

In recent years, Kenya’s real estate sector has entered a new phase—one no longer solely driven by domestic demand or institutional capital flows, but increasingly influenced by private diaspora investors, including a growing cohort of African-Americans relocating from the United States. For many, property acquisition is more than a commercial undertaking—it is a personal reclamation of space, history, and opportunity. But emotional drivers cannot substitute for legal certainty. In this landscape, robust legal structuring is not optional; it is fundamental.

Migration Meets Market: An Emerging Investment Class

The global trend of African-American migration to Africa—most visibly Ghana, Rwanda, and Kenya—has gained significant momentum post-2020. Nairobi, in particular, has emerged as a preferred destination for its modern infrastructure, social vibrancy, and relative policy stability. The movement is no longer symbolic; it is transactional.

At the heart of these transactions lies real estate. Diaspora buyers are acquiring residential property in Karen, Kilimani, and Runda, and increasingly exploring commercial opportunities in counties such as Nakuru and Machakos. Many arrive well-capitalised but ill-prepared for Kenya’s land law regime, which remains intricate and, at times, opaque.

Legal Tenure: Freehold, Leasehold, and the Foreign Investor Framework

The Constitution of Kenya (2010) and the Land Control Act place explicit limitations on land ownership by non-citizens. Under Article 65, foreign nationals—including African-Americans—may only hold land on a leasehold basis, capped at 99 years. This includes both direct ownership and indirect holdings through companies where non-citizens own a controlling interest.

For diaspora investors—many of whom possess U.S. citizenship but identify with Kenyan or broader African heritage—this distinction is often misunderstood. While Kenya welcomes foreign capital, its land policy is deeply informed by history. Legal structuring must therefore navigate not only statutory compliance, but also land control board approvals and, in some cases, community engagement protocols.

The Allure of Off-Plan Sales

Off-plan property purchases—where investors buy properties before they are built—have become increasingly popular, particularly in urban centers like Nairobi. These sales often offer lower prices than ready-to-move-in properties, making them attractive for both local and international investors. However, the risks associated with off-plan purchases are significant, especially if due diligence is neglected.

An off-plan transaction carries inherent uncertainties, as the project’s completion timeline, quality, and the developer’s financial stability may not always be clear. It is crucial for foreign investors to verify the developer’s track record, ensure that all necessary approvals have been obtained from local authorities, and review the legal documentation meticulously. A failure to conduct these checks can lead to substantial financial losses and legal battles if the project fails to materialize or is delayed.

One of the most notable cases that illustrate the importance of due diligence in property transactions involves Dina Management Limited v. County Government of Mombasa & 5 Others (Petition 8 (E010) of 2021), where a company acquired land from an unverified source, only to discover that the land had been irregularly allocated and was subject to claims by the Department of Defence. Despite being a subsequent purchaser, the company lost both the property and the investment because it failed to conduct sufficient due diligence. This case highlights the potential risks foreign investors face when acquiring property, especially off-plan developments, without ensuring proper legal processes are followed.

Sectional Properties: Shared Ownership with Legal Implications

Another popular form of investment is in sectional properties, where buyers own individual units within a larger development, such as apartments or townhouses, while jointly owning common areas like elevators and gardens. Sectional properties are an attractive option for diaspora investors looking to own property in prime urban areas like Nairobi, Mombasa, and Kisumu.

However, investing in sectional properties also requires careful attention. Failure to review the management agreement and ensure that the developer has complied with the necessary regulations, such as proper zoning approvals and building permits, can result in serious legal complications. A poorly managed property can lead to conflicts over maintenance responsibilities, misuse of common areas, and disputes over how shared expenses are divided.

Land Acquisitions: The Hidden Pitfalls

Land acquisition remains one of the most significant investment options for foreign nationals, particularly those seeking to capitalize on Kenya’s growing real estate market in up-and-coming regions. However, land transactions in Kenya are not without their challenges, especially for non-citizens.

Before purchasing land, it is crucial for foreign nationals to conduct a title search through the Ministry of Lands and verify that the land is free from encumbrances or claims. Land fraud is unfortunately prevalent, and there have been cases where foreign investors have been duped into buying land that did not belong to the seller or was already mortgaged

A landmark case that highlights these risks is Assets Recovery Agency v. Njoroge; Mesel (Interested Party), where a Belgian national transferred substantial sums of money into a property transaction only to discover that the transaction was tied to illegal activities. The court ruled against the foreign investor, emphasizing the need for due diligence in verifying the legitimacy of land ownership and ensuring compliance with Kenyan property laws.

Risks and Opportunities in Affordable Housing Projects

Kenya’s Affordable Housing Programme (AHP) is now anchored in a dedicated legal framework under the Affordable Housing Act, 2024, enacted to give effect to the state’s constitutional obligation under Article 43(1)(b) of the Constitution. The Act establishes the Affordable Housing Fund, financed by a mandatory 1.5% levy on gross income, payable by both employers and employees. Funds collected are allocated to the construction of affordable housing units and associated infrastructure across the country, offering an unprecedented level of fiscal and legislative backing for housing initiatives. The Fund acts as both a financing mechanism and offtake vehicle, enabling structured government purchase of completed units through models such as the Tenant Purchase Scheme (TPS), commonly known as the rent-to-own scheme.

For investors, the AHP presents a stable, state-backed real estate asset class with predictable demand and social impact credentials. However, careful legal structuring is essential often because non-citizens remain subject to Article 65 of the Constitution, which restricts land ownership to leasehold tenure of up to 99 years.

Developers and contractors participating in the AHP must be accredited by the State Department for Housing and Urban Development as Strategic Partners. This process entails demonstrating financial and technical capacity, securing land (often through public-private arrangements with county governments), and aligning with the Development Framework Guidelines—which set standards for density, unit typology, pricing, and amenities. Developers benefit from VAT exemptions on approved inputs and government-provided bulk infrastructure, while contractors are bound by the Public Procurement and Asset Disposal Act, 2015 and are expected to engage local artisans and suppliers under the programme’s local content policy. Equally important to note is that legal due diligence across land tenure, approvals, contract administration as well as procurement is not merely advisable—it is indispensable. The AHP is a highly regulated undertaking, and success primarily hinges on regulatory compliance, sound project governance, and early-stage legal structuring.

Mitigating Risks

The best way for foreign nationals to protect their investment is through meticulous due diligence. This process involves verifying the authenticity of title deeds, ensuring the property is free from legal disputes, and confirming that all zoning, building, and land control approvals are in place.

Conclusion

Kenya offers compelling real estate opportunities for foreign nationals and returning diaspora alike. Yet the emotional and symbolic value of land must be matched by legal precision. Whether investing in off-plan developments, sectional properties, or land, success hinges on a full appreciation of Kenya’s legal framework, diligent verification, and structured compliance. In property transactions, what you don’t know can cost you everything.

Should you have any questions on this legal alert, please do not hesitate to contact Ivia Kitonga at mail@kitllp.com.

This article is provided for general informational purposes only and does not constitute legal advice. Readers are advised to seek specific legal counsel before acting on any information contained herein.

Nzamba Kitonga Advocates LLP

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