The Court of Appeal has reaffirmed a strict rule for land transactions in Kenya: if a buyer fails to make payment on time, he or she risks losing both the deposit and the property.
This comes after the case between Magretville Asami Macho and Grigorios Smaragdis (the appellants) and Musa Mwera Athuman, Truphena Nyaboke Onwong’a, and Yobesh Onwong’a Oyaro (the respondents), where delayed payment led to the collapse of a land-sale agreement.
Court of Appeal Sets the Record Straight on Expired Land Contracts
The Court of Appeal in Malindi has delivered a judgment in Civil Appeal No. E013 of 2022, overturning the Environment and Land Court’s award to the appellants, Magretville Asami Macho and Grigorios Smaragdis, who had paid a deposit of Ksh 572,000 for a plot in Mtwapa, but failed to clear the balance within the 90-day statutory period.
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Years later, the land had been sold, developed, and appreciated by the respondents Musa Mwera Athuman, Truphena Nyaboke Onwong’a, and Yobesh Onwong’a Oyaro. Yet the appellants, Magretville Asami Macho and Grigorios Smaragdis, still pursued specific performance and were even awarded KES 4 million by the trial court. The Court of Appeal has now reversed the award in full.
The Court determined that the agreement automatically dissolved upon the expiration of the required 90-day completion period. Courts will not order the transfer of land that has already been sold to innocent third parties, and specific performance is unavailable where the buyer was the party in violation.
The decision also made it clear that any claim for and appreciation of land value is not compensable unless adequately pleaded and strictly proven, and that general damages are not always recoverable for breach of contract.
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Key Lessons for Land Buyers and Sellers
To avoid losing both the property and their deposit, buyers must complete the transaction within the stated time frame.
When the consent is issued to the Land Control Board (LCB), whose role is to regulate transactions involving agricultural land and prevent unauthorized transfers, consent issues, the clock starts ticking, and failure to complete within the statutory period expires, the seller is legally free to move on and can sell the land. Courts will not revive expired contracts or compensate for lost opportunities.
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