Steps on Converting Property from Freehold to Leasehold in Kenya
🏠Steps on Converting Property from Freehold to Leasehold in Kenya
WKA Advocates explain how to convert freehold land to leasehold in Kenya — covering Article 65, NLC procedures, and investor compliance.
At WKA Advocates, we guide clients through every dimension of property ownership — from due diligence and conveyancing to complex land tenure transitions under Kenya’s evolving legal framework.
Among the most technical processes in land law today is the conversion of freehold property to leasehold tenure. While many property owners understand the process of converting leasehold to freehold, the reverse conversion — freehold to leasehold — is guided by constitutional, administrative, and developmental principles that demand precision and legal foresight.
In Kenya’s property ecosystem, the two principal ownership models — freehold and leasehold — shape ownership rights, succession, value, and long-term investment potential.
1. The Great Reset: The 2010 Constitution and Foreign Land Ownership
The promulgation of the Constitution of Kenya, 2010 triggered a major shift in land tenure. This was not a mere reform but a nationwide legal reset designed to ensure equitable access and national control over land.
The Core Provision: Article 65
“A person who is not a citizen may hold land on the basis of leasehold tenure only, and any such lease, however granted, shall not exceed ninety-nine years.”
This constitutional clause means non-citizens cannot hold land under freehold tenure. Any such ownership automatically converts into a leasehold interest limited to 99 years.
Who Is a Non-Citizen Under Article 65?
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Any individual who is not a Kenyan citizen.
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Any company or entity not wholly owned by Kenyan citizens.
Automatic Conversion
Upon the Constitution’s commencement on August 27, 2010, all freehold titles held by non-citizens were automatically converted into 99-year leases by operation of law.
The Government of Kenya became the lessor, while the non-citizen became the lessee.
Even when a non-citizen inherits freehold land, the law automatically converts it to a 99-year lease upon transfer.
At WKA Advocates, we represent embassies, multinational corporations, and foreign investors in title regularization — ensuring compliance with Article 65, Section 9 of the Land Act, and National Land Commission (NLC) guidelines, while preserving long-term investment value.
2. Making It Official: The Administrative Regularization Process
Although conversion happens automatically by law, the physical titles and registry records must be updated — a process known as title regularization.
Legal Framework
The process is governed by:
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The Land Act, 2012
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The Land Registration Act, 2012
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The Land Regulations, 2017
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Circulars from the National Land Commission (NLC)
Steps in the Regularization Process
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Notification: The NLC or Land Registrar notifies the holder to surrender the original freehold title.
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Surrender: The owner, through their advocate, surrenders the Certificate of Title or Grant.
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Re-Issuance: A new Certificate of Lease (99 years) is issued, identifying:
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Lessor: The Government of Kenya
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Lessee: The registered non-citizen
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Conditions: Annual rent, lease covenants, and compliance clauses
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Registry Update: The parcel file, Ardhisasa record, and cadastral map are updated.
Even though the five-year statutory window under the 2017 Regulations has lapsed, WKA Advocates assists clients with voluntary regularization during transfers, charges, or subdivisions to maintain lawful and bankable tenure.
3. The Voluntary Path: Creating Leasehold Interests from Freehold Land
Not all conversions arise from constitutional mandates. Kenyan citizens and local companies frequently create leasehold interests from freehold property for real estate development, estate planning, or income generation.
How It Works
A freehold owner (lessor) grants a long-term lease — typically 99 years — to a buyer or tenant (lessee). This is common in:
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Apartment developments
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Gated communities
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Industrial or commercial complexes
Example
A developer holding freehold land constructs apartments and sells each unit under a 99-year lease within a Sectional Titles framework. Each buyer receives a Certificate of Lease, while the developer retains the freehold reversionary interest — benefiting from ground rent, use control, and eventual reversion.
WKA Advocates structures and registers these leases in compliance with the Sectional Properties Act, 2020 and Land Control Act, ensuring full legal protection.
4. Key Implications for Landowners and Investors
The shift from freehold to leasehold carries several long-term implications for both local and foreign investors.
| Aspect | Implications |
|---|---|
| Perpetuity | Freehold ownership becomes a fixed 99-year interest. |
| Value | Leasehold properties depreciate as the lease term reduces. |
| Control | The Government retains ultimate control through lease terms and rent. |
| Renewal | Kenyan citizens have pre-emptive renewal rights; non-citizens must reapply. |
| Income | Freehold owners can earn rent while retaining reversionary rights. |
5. Strategic Considerations with WKA Advocates
Our firm offers strategic and compliance-oriented legal support in all tenure conversions, including:
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Title Audits: Verifying tenure via Ardhisasa and legacy registries.
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Regularization: Preparing surrender and lease documents, coordinating with NLC and Land Registrar.
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Investor Structuring: Advising foreign investors to align shareholding with Article 65.
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Developer Advisory: Crafting lease templates aligned with the Sectional Properties Act, 2020.
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Litigation Support: Representing clients before the Environment and Land Court (ELC) and Land Appeals Boards.
Steps on Converting Property from Freehold to Leasehold in Kenya
The conversion of freehold to leasehold in Kenya follows two main pathways:
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Mandatory Constitutional Conversion (Article 65) — for non-citizens.
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Voluntary Lease Creation — for citizen developers and investors.
Understanding these distinctions ensures compliance, security, and value preservation.
At WKA Advocates, our Real Estate & Conveyancing Department integrates legal, planning, and valuation expertise to deliver secure, compliant, and efficient ownership solutions.
Whether you’re regularizing a title, structuring a head lease, or protecting reversionary rights, we transform complexity into confidence — safeguarding your investment within Kenya’s modern land law system.
WKA Advocates — Where Property Meets Legal Precision.
📍 Valley View Business Park, Nairobi
📧 info@wka.co.ke | 📞 +254 798 035 580 | 🌐 www.wka.co.ke
