Introduction: The Evolution of Property Titles
The Sectional Properties Act No. 21 of 2020 (the “Act”) and its 2021 Regulations represent a historic shift in Kenya’s real estate sector. By allowing for the division of buildings into individual units with independent titles, the law has moved Kenya away from the cumbersome "sub-lease" era into a modern, transparent, and bankable ownership model.
For homeowners and developers in 2026, understanding the difference between the old 1987 regime and the current 2020 framework is essential for securing your investment and ensuring your title is compliant with Ardhisasa requirements.
Comparative Analysis: Old vs. New Legal Framework
To understand why your building must convert, we must compare the structural changes introduced by the 2020 Act.
1. Management Companies vs. Statutory Corporations
Old Regime (1987): Developers incorporated private Management Companies to manage common areas and hold the "reversionary interest." Owners were merely shareholders in these companies.
New Regime (2020): Upon registration of a sectional plan, a Corporation is born automatically at the Ministry of Lands. It focuses strictly on management.
2. Membership and Ownership Proof
Old Regime: Owners held Share Certificates as proof of their stake in the management company.
New Regime: Shares and share certificates are abolished. Membership in the Corporation is automatic for every unit owner. Your Certificate of Lease or Certificate of Title is your only proof of ownership and membership.
3. The End of "Reversionary Interest"
Old Regime: The developer or a management company held the "reversionary interest," meaning they technically owned the land once your lease expired. This often gave developers undue leverage over unit owners.
New Regime: Reversionary interest is abolished. Individual unit owners now hold the interest in the land proportionately. If the land is leasehold, the right to apply for a Lease Extension vests directly in the unit holders, not the developer.
4. Document of Title: Sub-Lease vs. Sectional Title
The Old Way: You received a Sub-Lease (usually a thick, manual document) and a share certificate.
New Regime: You receive a Certificate of Lease (for leasehold land) or a Certificate of Title (for freehold land). These are vertical titles that are as legally "clean" as a title for a standalone plot of land.
Governance: Rules and By-laws
The Corporation is governed by By-laws rather than a Memorandum and Articles of Association.
Adoption: New developments must lodge By-laws during registration.
Conversion: Existing developments can adapt their old lease terms into the new By-laws.
Amendments: By-laws can be changed via a 75% Special Resolution of the members. Once amended, they must be filed with the Land Registrar to be legally enforceable.
Why Conversion is Mandatory
Under Section 13(2) of the Act, all long-term sub-leases registered before December 2020 must be converted to Sectional Titles. Failure to convert results in:
Dealings Blocked: You cannot sell, charge (mortgage), or gift your property.
Restriction on Title: The Registrar will place a restriction on the "Mother Title" until compliance is met.
How the Sectional Titles Advisory Centre Can Assist
Navigating the transition from the 1987 Act to the 2020 Act requires technical and legal precision. Our team specializes in:
By-law Drafting: Preparing custom, compliant By-laws for your new Corporation.
Governance Audits: Amending existing rules to meet the 75% resolution threshold.
End-to-End Conversion: Managing the survey (geo-referencing) and legal surrender of old leases to secure your new Sectional Titles.