Land tenure lies at the heart of property ownership and conveyancing in Kenya. While Kenyan law, in Article 64 of the Constitution, recognizes freehold and leasehold land tenure systems and expressly contemplates the conversion of land from one tenure to another, the absence of a comprehensive regulatory framework governing such conversion has created uncertainty for developers, investors, and conveyancing practitioners.
This uncertainty is most pronounced in the attempted conversion of Freehold or Fee Simple land into Leasehold, particularly in commercial developments and transactions involving foreign purchasers.
This article examines the applicable constitutional and statutory provisions, highlights the existing regulatory gap, and analyzes the practical consequences of this legal conundrum.
Does Kenyan law actually allow conversion of freehold to leasehold?
Yes. Section 9 of The Land Act, 2012, acknowledges different tenure systems and allows the conversion of land from one category to another under specific circumstances, particularly for public, community, and private land. Further, the Land Regulations, 2017, issued under the Land Act, in regulations 14-15, require the National Land Commission (NLC) to undertake the conversion of freehold titles and leaseholds exceeding 99 years owned by non-citizens into 99-year leases within five years from the commencement of the regulations. The Commission is obliged to notify affected landowners through the Gazette and newspapers, and then implement the conversion.
Has NLC fully implemented a clear, practical framework for conversion?
No. While the law contemplates conversion of land from one tenure to another, the National Land Commission, the very institution mandated to advise on land policy and oversee land management, has not issued a clear, binding legal framework to guide how Freehold land should be converted into Leasehold. The result is a legal grey area. guide the direct conversion of a freehold title to a leasehold title upon a voluntary application by a Kenyan citizen.
This means you can walk into a land registry with a freehold title and request a conversion based on Section 54, but the registrars currently have no established legal process to grant your request directly. Consequently, foreign owners and developers are often left in a grey zone where the law mandates conversion in principle. Still, the practical steps, forms, timelines, and fees remain unclear or inconsistently applied.
How does this affect developers and commercial projects?
The absence of clear, uniform conversion procedures has created fundamental uncertainty for developers, especially where:
- Land is currently freehold or fee simple but is intended for commercial, high-density, or mixed-use development in urban areas.
- The intended end‑buyers or occupiers include foreigners, who can only hold leasehold interests.
In practice, developers and their advisers often have to “work around” planning approvals, change-of-user processes, and local registry practices to ensure that, by the time units are sold (especially to foreigners), valid leasehold titles are in place.
How do developers currently deal with freehold titles where the project is commercial?
In many cases, where the underlying land is freehold and the intended development is commercial or high-density residential, developers:
- Apply for a change of user under the Physical and Land Use Planning Act, No. 13 of 2019. (for example, from agricultural or single‑dwelling residential to commercial, mixed-use, or apartments) through the relevant county government.
- Upon approval of the change of user:
- Some registries require surrender of the Freehold title and issue a Leasehold title, often for 99 years
- Others allow continued holding under Freehold
- Others decline to process conversion altogether
Note: When a Change of User is approved, transforming the land’s designated use from a lower tier (like agricultural) to a higher tier (like commercial or residential multi-dwelling), the resulting new title issued by the registry is frequently a Leasehold title
This practice is neither uniform, guaranteed, nor grounded in explicit statutory provisions.
Is this “Change of User” route a guaranteed way to secure a leasehold title?
Absolutely not. This workaround is heavily context-specific and dependent on several variable factors:
- The Property’s Location and Current User: A change of user is not automatic; it must align with the local county government’s zone’s spatial plan.
- Local Government Jurisdiction: Different County Governments have varying approaches to planning and title issuance.
- The Land Registry: Practices at different registries can vary based on local interpretations of planning approvals.
- Whether the lessor would be the national government, the county government, or a private landlord, this affects the route for creating or restructuring a leasehold interest
Developers must understand that they are applying for a change in what they do on the land, and the leasehold title is often a consequence of that approval, not the primary application itself. Further, since there is no single, codified conversion “manual” that applies uniformly across the country, developers often need bespoke legal advice and engagement with county and registry officials.
Is it safe for a foreigner to agree to buy freehold land on the promise that it will be converted to leasehold later?
No. A foreigner should not agree to purchase land in Kenya on the basis that the seller (or developer) will “later convert” a freehold title to leasehold, because:
- Article 65(1) bars non-citizens from holding freehold interests altogether, restricting them to leaseholds of up to 99 years.
- The NLC-led conversion framework under the Land Regulations, 2017, has not been fully and uniformly implemented, resulting in a lack of guaranteed, predictable pathways or timelines for the formal conversion of any particular freehold to leasehold.
- If the transaction is structured in breach of constitutional requirements, a foreign buyer risks ending up with a defective title, regulatory challenges, or difficulties at the point of registration, financing, or resale.
The safer approach is for the foreign buyer to insist that the land be converted appropriately and registered as leasehold in accordance with Kenyan law before or contemporaneously with completion, rather than relying on post-completion promises.
What legal risks do foreigners face if they ignore the leasehold requirement?
If a foreign buyer proceeds on the assumption that a freehold title will simply be “converted later”, they may face:
- Registration risk – the land registry may reject or query an application that appears to give a foreigner a freehold interest contrary to Article 65.
- Enforceability risk – finance providers and future purchasers may treat the title as defective or high‑risk, affecting loan approvals and resale value.
- Regulatory and compliance risk – future policy action by NLC or the government could trigger compulsory conversion or regularization, possibly on terms not favourable to the buyer.
Foreign investors should therefore insist on strict compliance with constitutional and statutory tenure rules from the outset and engage experienced legal counsel before signing any purchase documents.
Best Practice and Risk Mitigation
Until a comprehensive regulatory framework is issued, prudence dictates that:
- Developers should not assume conversion as of right.
- Foreign purchasers should only transact where Leasehold titles already exist or are issued prior to completion.
- Legal due diligence should interrogate tenure status at the earliest stage.
- Initiate change of user early for commercial projects.
- Transactions should be structured conservatively and in compliance with constitutional limits.
- Avoid informal promises of future conversion.
- Keep all approvals and correspondence for future regularization.
Conclusion
While Kenyan law recognizes the possibility of converting land from one tenure system to another, the absence of a clear regulatory framework, particularly from the National Land Commission, has created a legal conundrum.
Until such a framework is developed, conversion from Freehold or Fee Simple land into Leasehold remains uncertain, discretionary, and location-specific. Developers and investors must therefore proceed with caution, guided by constitutional imperatives rather than administrative convenience.
How Njaga & Co. Advocates LLP Helps
At Njaga & Co. Advocates LLP, we guide foreign individuals, expatriates, diaspora investors, and foreign-owned companies through Kenya’s evolving land regime with clarity and strategy. Our services include:
- Land tenure advisory and due diligence
- Change of user applications
- Developer project structuring
- Foreign property acquisition advisory
- Conveyancing and transfer registration
- Sectional Property Compliance
- Risk mitigation in land transactions
Disclaimer: This article provides general information and does not substitute legal advice on specific circumstances of any individual or organization. While the information is accurate as of the date published, we cannot guarantee it remains accurate at the time you read it or that it will stay current. Before acting on any of this information, please seek professional legal advice tailored to your situation.
