Due Diligence Tips For Real Estate Buyers in Kenya
Over the years, many developers have struggled to deliver projects within the agreed scope, quality and timelines. This has created significant challenges for buyers, turning the market into a space vulnerable to fraud.
Whether buying offplan or ready units, due diligence is your responsibility as this is a buyers market.
Off-Plan Buyers:
Before proceeding to engage with that developer, please make the following preliminary checks:
- Ensure the developer has a legally registered company that has not changed names more than once in the last three years.
- Confirm that the land is fully secured before making any payments.
- Verify financial capacity: the developer should already hold at least one-third of the total construction cost in cash, insurance bonds, or verifiable assets.
When you proceed to make a deposit, ensure that subsequent payments are tied to construction milestones, not weekly or monthly schedules. This ensures that if construction stops, payment obligations also pause, regardless of the developer’s reasons.
Buyers of Ready Units:
Buying off-plan is generally more affordable. However, other reasons might push you to buy a readily available unit. Nevertheless:
- Confirm the developer meets the same legal and financial criteria.
- Conduct an independent due diligence on the property’s land, including transfer history and whether it has been used as collateral.
- Verify all required approvals: municipal or county-approved drawings, NEMA approval, NCA approval, and the certificate of occupancy.
- Visit the property in person to avoid risks from fake online listings, which can include cloned websites and AI-generated images.
- Bring a construction professional to assess structural integrity, quality of living spaces, and technical aspects.
Before Completing the Purchase:
- Carefully read the sale agreement to understand any restrictions on finishes, future charges or service fees.
- Ensure you receive a proper certificate of ownership. For sectional properties, this includes being a shareholder in the SPV holding the building.
The real estate market in Kenya is yet to be regulated by the Government. It is unfortunate that due diligence is often left to uninformed buyers. In comparison, developed markets have stricter safeguards:
- Dubai requires mandatory escrow accounts for off-plan payments and government-approved units.
- Australia holds deposits in trusts until construction is complete, and all developments are archived online for transparency.
Without such regulation, scams in Kenya having been occuring through:
- Deliberate project delays in order to fake bankruptcy filings midway.
- Random mid-project changes to specifications.
- Lack of warranties for defective construction.
- Vague contracts or sale agreements.
- Fake property listings.
In conclusion, due diligence is essential and highly advised that you engage professionals in the same. Whether legal or technical.
Verify financial capacity: the developer should already hold at least one-third of the total construction cost in cash, insurance bonds, or verifiable assets.
For more information, reach out to us via info@rickfes.co.ke
At Rickfes Construction Ltd, we guide buyers through every stage of apartment acquisition, from developer verification and land due diligence to technical inspections and legal compliance. Our role is to ensure that property purchases in Kenya; whether off-plan or completed are secure, transparent, and structured for long-term value.
