Understanding Freehold and Leasehold Land Ownership in Kenya

Land ownership in Kenya is a critical consideration for investors, homeowners, and developers. Recent debates around proposed amendments to the Land Act 2012—which were ultimately withdrawn—highlight the importance of understanding the different types of land tenure available. This knowledge is essential for anyone looking to acquire land or property in Kenya.

The withdrawn proposal sought to introduce a clause requiring freehold landowners—who enjoy perpetual ownership of land—to pay an annual land rent. Under the Constitution of Kenya, land tenure refers to the act, right, or period of holding land, which falls under two main categories: freehold and leasehold.

Freehold Ownership

Freehold tenure confers complete ownership of land for life. Owners have the liberty to use the land within the bounds of applicable laws and regulations, and the land can be passed down to descendants indefinitely, subject to succession laws.

Key Features of Freehold Land:

• Absolute ownership of the land
• No annual land rent required
• Inheritable by descendants in accordance with succession laws
• Fewer restrictions compared to leasehold tenure
• Foreign nationals are generally prohibited from owning freehold land

Freehold is commonly preferred by those seeking long-term security of ownership and control over land use.

Leasehold Ownership

Leasehold tenure grants the lessee the right to use land owned by another party (the lessor) for a fixed period, as defined in a lease agreement. Upon expiration, ownership reverts to the freeholder unless the lease is renewed. Leasehold property is common in urban areas, municipalities, and towns, and freehold land intended for commercial use may also be offered on lease.

Key Features of Leasehold Land:

• Ownership is limited to the lease period, which can range from a few decades to 99 or even 999 years
• Lessees may be required to pay annual rent to the lessor
• Use of the land is subject to conditions outlined in the lease agreement
• Lease renewals are possible but subject to negotiation and the lessor’s consent
• Foreigners are permitted to acquire leasehold interests

Key Differences Between Freehold and Leasehold

Feature	Freehold	Leasehold
Duration of Ownership	Perpetual, no time limit	Limited to lease term (decades to 999 years)
Land Rights	Full rights over land and buildings	Rights limited to lease terms
Transfer of Ownership	Can be freely transferred or inherited	Transfer subject to lessor approval and lease conditions
Payment	One-time purchase price	Initial payment plus ongoing rent/ground rent
Control	Full control over property	Subject to restrictions in lease agreement

 

Why Understanding Tenure Matters

Many investors acquire property without fully appreciating the implications of the tenure system, which can lead to legal, financial, and operational pitfalls. Conducting due diligence and seeking professional legal advice ensures that investors make informed decisions and avoid costly mistakes.

By understanding whether land is freehold or leasehold, investors can plan effectively for ownership, usage, transfer, and succession, and mitigate risks associated with property acquisition in Kenya.

This publication is intended for general informational purposes and does not constitute legal advice. Investors and property buyers should consult qualified legal practitioners before entering into land transactions.

Terrorism Financing and Financial Sanctions in Kenya: Key Compliance and Regulatory Considerations

 

LEGAL UPDATE | BANKING, FINANCE & REGULATORY

Terrorism Financing and Financial Sanctions in Kenya: Key Compliance and Regulatory Considerations

Executive Summary

Kenya continues to strengthen its legal and regulatory framework to combat terrorism financing and implement terrorism financial sanctions (TFS). Financial institutions, corporates, non-profit organizations, and professional advisers are increasingly expected to maintain robust anti-money laundering and counter-terrorism financing (AML/CFT) compliance systems.

Key considerations include:

• Terrorism financing is criminalised under the Prevention of Terrorism Act.
• Reporting institutions must implement AML/CFT controls under the Proceeds of Crime and Anti-Money Laundering Act.
• Kenya enforces targeted financial sanctions in line with obligations issued by the United Nations Security Council.
• Financial institutions and designated non-financial businesses and professions (DNFBPs) must conduct customer due diligence, sanctions screening, and suspicious transaction reporting.

Failure to comply with AML/CFT obligations may expose organizations to regulatory enforcement actions, financial penalties, and reputational risk.

1. Introduction

The disruption of financial networks that support terrorism has become a key priority for governments and regulators worldwide. Terrorism financing can occur through legitimate or illicit financial channels, including charitable donations, commercial activities, and informal financial systems.

Kenya has experienced the operational impact of terrorism, including attacks such as the Westgate Shopping Mall attack and the Garissa University College attack. These events reinforced the need for robust legal mechanisms designed to detect and disrupt financial flows associated with terrorist networks.

In response, Kenya has implemented a comprehensive legal framework aligned with international standards established by the Financial Action Task Force.

2. Legal and Regulatory Framework

Kenya’s counter-terrorism financing regime is primarily governed by legislation aimed at criminalising terrorism financing and imposing preventive compliance obligations on regulated entities.

Prevention of Terrorism Act

The Prevention of Terrorism Act criminalises the financing of terrorist activities and prohibits any person from directly or indirectly providing funds, financial services, or property for terrorist purposes.

The Act empowers authorities to:

• Freeze or seize assets connected to terrorism financing
• Investigate financial networks linked to terrorist organisations
• Prosecute individuals and entities involved in financing terrorism

Penalties under the Act may include substantial criminal sanctions, including imprisonment and confiscation of assets.

Proceeds of Crime and Anti-Money Laundering Act (POCAMLA)

The Proceeds of Crime and Anti-Money Laundering Act establishes Kenya’s broader AML/CFT compliance framework.

The Act imposes regulatory obligations on reporting institutions, including:

• Banks and financial institutions
• Insurance companies
• Money remittance providers
• Advocates and other professional advisers in specified transactions
• Real estate professionals and accountants

Key obligations include:

• Customer Due Diligence (CDD)
• Record-keeping requirements
• Monitoring and reporting suspicious transactions

3. Institutional Oversight and Enforcement

Kenya’s AML/CFT framework is implemented through several regulatory and supervisory bodies.

Financial Intelligence

The Financial Reporting Centre acts as Kenya’s financial intelligence unit and is responsible for receiving, analysing, and disseminating suspicious transaction reports from reporting institutions.

Financial Sector Supervision

The Central Bank of Kenya oversees the banking sector and ensures compliance with AML/CFT regulatory requirements by licensed financial institutions.

Counter-Terrorism Coordination

The National Counter Terrorism Centre coordinates national strategies aimed at preventing terrorism and disrupting terrorist financing networks.

4. Terrorism Financial Sanctions (TFS)

Targeted financial sanctions are a key mechanism used globally to disrupt financial support to terrorist organisations.

Kenya implements sanctions regimes adopted by the United Nations Security Council, which require member states to impose asset freezes against designated individuals and entities associated with terrorism.

Under these obligations, reporting institutions must:

• Immediately freeze assets belonging to designated persons
• Prevent funds or economic resources from being made available to them
• Report relevant actions to authorities

Sanctions compliance is therefore an essential component of institutional AML/CFT programs.

5. Compliance Considerations for Businesses and Financial Institutions

Organizations operating within Kenya should adopt a risk-based compliance framework designed to mitigate exposure to terrorism financing risks.

Key measures include:

Customer Due Diligence

Institutions must verify customer identities and identify beneficial owners before establishing business relationships.

Enhanced due diligence may be necessary in higher-risk scenarios, including transactions involving politically exposed persons or high-risk jurisdictions.

Sanctions Screening

Customers, counterparties, and beneficial owners should be screened against applicable sanctions lists to ensure compliance with financial sanctions regimes.

Suspicious Transaction Reporting

Where institutions detect unusual financial activities or suspect potential terrorism financing, they must report such transactions to the Financial Reporting Centre.

Internal Compliance Controls

Effective compliance frameworks typically include:

• Written AML/CFT policies
• Internal risk assessments
• Staff training programs
• Appointment of compliance officers

6. Implications for Law Firms and Professional Advisers

Law firms may fall within the scope of AML/CFT regulations when engaging in financial or transactional work on behalf of clients.

Examples include:

• Managing client funds
• Facilitating real estate transactions
• Establishing corporate structures
• Structuring financial arrangements

In these circumstances, advocates are expected to conduct client due diligence and risk assessments to prevent misuse of legal services for illicit financial activities.

7. Key Takeaways for Businesses

Organizations operating in Kenya should consider the following compliance priorities:

• Review AML/CFT policies to ensure alignment with current legislation.
• Implement sanctions screening procedures.
• Conduct regular risk assessments relating to terrorism financing exposure.
• Provide AML/CFT training to employees and compliance personnel.
• Maintain clear reporting procedures for suspicious transactions.

A proactive compliance approach can significantly reduce regulatory and reputational risk.

8. Conclusion

Kenya’s legal framework governing terrorism financing and financial sanctions continues to evolve in line with international AML/CFT standards. Regulators are increasingly focused on ensuring that reporting institutions maintain effective compliance systems capable of identifying and preventing illicit financial flows.

Financial institutions, corporates, and professional advisers should therefore continue to strengthen internal controls and remain alert to emerging regulatory developments in this area.

Key Contacts

For further information regarding terrorism financing compliance, financial sanctions, or AML/CFT regulatory obligations in Kenya, please contact our Banking, Finance and Regulatory Practice Group.

This publication is provided for general information purposes only and does not constitute legal advice. Specific legal advice should be sought in relation to particular circumstances.

Rectification of a Name on a Land Title in Kenya: Legal Process Under the Land Registration Act, 2012

Errors in names appearing on land titles are more common than many property owners realize. Whether caused by a typographical mistake, transposition of names, or a lawful change of name after marriage or through deed poll, such discrepancies should be formally corrected to avoid complications in future transactions.

Under the Land Registration Act (LRA), 2012, rectification of a name on a land title is provided for under Section 79, which empowers the Land Registrar to correct errors in the register.

Below is a practical guide to the process.

 

The Applicable Forms

Rectification of a name is initiated using the prescribed forms under the LRA:

• Form LRA 87 – Application to Rectify the Register
  This is the primary application form. It specifies the incorrect name appearing in the register and provides the correct name to be entered.
• Form LRA 89 – Consent to Rectify the Register
  This form is often required where the rectification affects proprietorship details, confirming that the registered owner consents to the correction.

In some cases, the Registrar may also issue:

• Form LRA 90 or LRA 91 – Notice of Intention to Rectify the Register, allowing for objections (if any) before the correction is effected.

 

Required Supporting Documents

The following documents are typically required to support the application:

• Original Title Deed or Certificate of Lease
• Copy of National ID or Passport
• Copy of KRA PIN Certificate
• Registered Deed Poll (where the name change was formal)
• Affidavit explaining the discrepancy (e.g., spelling error or name rearrangement)
• Birth Certificate or Marriage Certificate (where applicable)
• Two coloured passport-size photographs

Providing complete and consistent documentation is critical to avoid delays.

 

How the Process Works

1. Filing the Application

The application is lodged with the Land Registrar at the registry where the property is registered. Currently, most applications are processed online through the ArdhiSasa platform.

In practice, applications are typically prepared and filed by an advocate on behalf of the applicant to ensure compliance with statutory requirements.

2. Verification by the Registrar

The Land Registrar reviews the submitted documents to confirm the existence of an error and the legitimacy of the proposed correction.

3. Issuance of Notice (Where Necessary)

If required, the Registrar may issue a formal notice of intention to rectify the register to allow any interested parties to raise objections.

4. Payment of Fees

A statutory fee of approximately Kshs. 1,000 is generally payable for the rectification.

Upon approval, the register is corrected and an updated title document reflecting the correct name is issued.

 

Where to File

Applications should be submitted at the relevant Land Registry where the property is registered or online via the ArdhiSasa platform (for registries that are digitized).

 

Why Rectification Is Important

An incorrect name on a title document can:

• Delay property sales or transfers
• Complicate succession proceedings
• Create difficulties when charging property to a bank
• Raise unnecessary due diligence concerns

Prompt rectification ensures the integrity of ownership records and protects your proprietary interests.

 

Professional Guidance

While the process may appear straightforward, land registration matters require strict compliance with statutory and procedural requirements. Professional legal guidance helps prevent rejection, delays, or unintended legal consequences.

If you require assistance with rectification of a land title or any other land registration matter, our firm is available to provide comprehensive support from preparation to successful registration.

 

Disclaimer: This article is for general informational purposes only and does not constitute legal advice. For advice tailored to your specific circumstances, please consult a qualified advocate.

 

High Court Upholds Kshs. 500,000 Award in Data Privacy Dispute: The case of Moja Expressway Company v Ndung’u (Civil Appeal E673 of 2024) [2025]

In a significant decision on data protection and employee rights, the High Court has upheld a Kshs. 500,000 award against Moja Expressway Company for unlawfully using a former employee’s image in promotional material after the end of his employment.

The case, Moja Expressway Company v Ndung’u (Civil Appeal E673 of 2024) [2025], arose from a dispute between the company and its former employee, Ndung’u, over the use of his image on the company’s social media platforms.

Background of the Dispute

During his employment, Ndung’u had consented to the company’s use of his image for promotional purposes. However, after resigning in November 2022, the employment relationship came to an end.

Nearly a year later, in October 2023, the company published a promotional post featuring Ndung’u’s image. He subsequently lodged a complaint with the Office of the Data Protection Commissioner (ODPC), alleging unlawful use of his personal data.

The company maintained that there was no breach, arguing that Ndung’u had previously given oral consent and had never formally withdrawn it. The ODPC disagreed, finding that a data breach had occurred and awarding Ndung’u Kshs. 500,000 in compensation.

The Appeal

Moja Expressway Company challenged the ODPC’s decision before the High Court, arguing that the damages awarded were not justified and had not been proven.

The Court was asked to determine two key issues:

• Whether valid consent had been obtained for the continued use of the image; and
• Whether the ODPC’s award of compensation was warranted.

Court’s Findings

On the issue of consent, the Court held that consent to use personal data is not indefinite or automatic. It observed that the continued use of Ndung’u’s image after termination of employment amounted to commercial exploitation.

While such use during employment may be compensated through salary or commission, the Court found that once the employment relationship ended, any further commercial use required fresh consent or a separate contractual arrangement. The company’s failure to obtain renewed consent rendered the use unlawful.

Regarding compensation, the Court acknowledged that emotional distress and related harm are difficult to quantify. Relying on previous judicial decisions, including MWK & Another v Attorney General & 3 Others and Kamande v Nation Media Group, the Court affirmed that reasonable compensation may be awarded even where harm cannot be precisely measured.

The High Court ultimately found no fault in the ODPC’s decision and upheld the award of Kshs. 500,000 to Ndung’u.

Key Takeaway for the Public

The ruling reinforces a critical principle under Kenya’s data protection framework: consent is not static or permanent. Where the circumstances under which personal data was originally provided change — such as the termination of employment — fresh consent may be required.

The decision serves as a caution to employers and organisations that personal data, including images, cannot be commercially exploited beyond the scope of the original consent. Failure to comply with data protection obligations may result in legal and financial consequences.