IMPORTANT TERMS IN AN AGREEMENT FOR SALE OF LAND
An Agreement for Sale for land (including houses and buildings) has various terms that are negotiated and agreed upon by the parties to the Agreement. Therefore, some of the contentious terms that you need to look out for when entering into an agreement for the sale of land are:
- Agreement to be in writing
All parties to the Land Sale Agreement sign the document. Additionally, witnesses from each party should also be present during the signing of the contract.
- Recognition of Parties
Ensure you have properly defined the Parties to the Agreement. This means:
Indicate their full name as it appears on their National Identification Card/Passport. If a Company, the name as it appears in the Certificate of Incorporation and the postal address of the party.
Moreover, in this digital age, it’s advisable to include the party’s email address which may be easier to serve any notices or communication to be made during the course of the transaction. If a Company, the registration number of the Company and the registered offices of the Company
- Purchase Price
Define the manner in which the Purchase Price will be paid.
So, if the purchase is being financed by a financial institution, ensure that is well indicated in the Agreement. The amount being financed, which is usually a portion of the purchase price should be clearly outlined.
If the transaction is not being financed, it is advisable for the Purchase Price to be held on stakeholder terms by the Seller’s Advocate in the transaction.
- Completion and Completion date
Define when the transaction will be deemed to be complete.
Define what constitutes Completion including the obligations of each party on the Completion date.
Be extra keen where the Property being purchased is an ‘off plan’ purchase where the Seller is yet to construct the Property.
- Default
Define what constitutes a default by either party.
Indicate the available remedies to each party.
Ensure to have a definite/defined timeline within which the refund of the Purchase Price is to be made.
- Dispute resolution
Ensure the Agreement captures a dispute resolution method. Equally important, be careful when providing for Alternative Dispute Resolution methods such as arbitration. Consider the cost implication of the method you provide for.
- Execution/Signing of the Agreement
Under Section 3 (3) of the Law of Contract Act, Chapter 23 Laws of Kenya, contracts for the disposition of land should be in writing, signed by all the parties to the Agreement and the signature of each party signing has been witnessed by a witness who is present when the contract was signed by such party.
Remember: The above is not specific legal advice for you. Always consult a lawyer to determine the best option for your specific situation
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