Land Due Diligence

LAND DUE DILIGENCE is the process of conducting thorough investigations and verifications before purchasing, leasing, or developing a piece of land. It is aimed at uncovering any legal, regulatory, or physical issues that may affect ownership, use, or transferability of the land. 

Key aspects of land due diligence include: 

1. Title verification – confirming legal ownership and whether the title is clean, valid, and unencumbered. 

2. Land use/zoning compliance – checking if the intended use aligns with planning regulations. 

3. Historical ownership – tracing the land’s ownership chain to ensure no prior fraud or illegality. 

4. Regulatory approvals – verifying survey plans, environmental clearances, and subdivision approvals. 

5. Physical inspection – visiting the site to identify boundary disputes, encroachments, or occupation issues. 

Land due diligence protects the buyer from legal disputes, fraud, and investment risks by ensuring informed, lawful, and secure land transactions. 

CASE STUDY 

SEHMI & ANOTHER V. TARABANA COMPANY LIMITED & 5 OTHERS [2025] KESC 21 (KLR) 

Facts of the Case 

Harcharan Singh Sehmi and Jaswarana Sehmi, the 1^st and 2^nd Appellant, are brothers and the initial lessees of the suit property situated in Ngara, Nairobi. The parcel of land was initially leased to the Sehmi family for a 59-year lease beginning 1942. The Lessor was the Government of Kenya. As the lease neared its expiry in 2001, the Sehmi family applied for a renewal of the lease. As part of the lease renewal process, the brothers received letters from both the Commissioner of Lands and Director of Physical Planning, who each confirmed that there were no objections to the lease renewal. Unfortunately for Harcharan Singh Sehmi and Jaswarana Sehmi, the lease was never formally extended due to administrative delays by the Lands Office.  

In 2009, the suit property was unlawfully and unprocedurally transferred to Rospatech Limited, (the 2^nd Respondent). In 2014, Rospatech Limited transferred the suit property to Tarabana Company Limited for a consideration of Kes. 24,000,000/-. Following the transfer to Tarabana, (the 1^st Respondent), the Sehmi family were evicted from the suit property and the 1^st Respondent constructed an eight-story building on said property.  

The two brothers filed a suit at the Environment and Land Court (ELC) in Nairobi. The ELC determined that Harcharan Singh Sehmi and Jaswarana Sehmi were the rightful owners of the property. The trial court therefore, nullified the 1^st and 2^nd Respondents’ titles and reinstated the Sehmi’s titles.  

The Respondents then appealed to the Court of Appeal. The Court of Appeal reversed the trial court’s decision, and found that the 1^st respondent was an innocent purchaser for value, and that therefore, Tarabana Company Limited had a legitimate right over the suit property.  

Harcharan Singh Sehmi and Jaswarana Sehmi are now the appellants in this suit before the Supreme Court of Kenya, seeking to quash the decision of the Court of Appeal.  

Issues before the Supreme Court of Kenya 

• What is the meaning, scope and extent of applicability of the doctrine of Bona fide/Innocent Purchaser for value without Notice? 

• Does the doctrine of Bona fide/ Innocent Purchser for Value Without Notice protect a purchaser of an illegally/irregularly allocated title over Public Land? 

• To what extent, if at all, is the doctrine of Legitimate Expectation applicable to the renewal of leases over public land? 

Rule of Law 

The Supreme Court of Kenya in reaching its decision relied on the following provisions of law; 

• Section 26(1) of the Land Registration Act, 2012 

• Article 47 of the Constitution of Kenya 

• Principles of legitimate expectation 

• Doctrine of innocent purchaser for value 

Analysis  

(Paragraph 8) “Holders of impugned titles, especially those acquired before the promulgation of the 2010 Constitution always called into service the provisions of section 23 of the Registration of Titles Act (repealed) on indefeasibility of title. Pursuant to section 23, a certificate of title was held as conclusive evidence of proprietorship. Upon repeal (of the Registration of Titles Act), the effects of registration are now governed by section 26 of the Land Registration Act.” 

(Paragraph 9) “Section 26 of the Land Registration Act provided that the proprietor shall not be subject to challenge, except on the ground of fraud or misrepresentation to which the person is proved to be a party; or where the certificate of title has been acquired illegally, unprocedurally or through a corrupt scheme. Under the Registration of Titles Act (repealed), a certificate of title was to be regarded by courts as conclusive evidence that the person named therein was the absolute and indefeasible owner of the land. However, under Land Registration Act, a certificate of title was to be regarded by courts as prima facie evidence that the person named therein was the absolute and indefeasible owner of the land. It was therefore no longer possible for a title holder to erect the certificate of title as a barrier to an inquiry into its legality or otherwise.” (emphasis ours) 

The Supreme Court in reaching its conclusion found that you cannot confer a bad title. A holder of an illegal title cannot possibly confer a legal title. In other words, there is no legality that can arise from an illegality. 

The Court further explained that it is not sufficient that a person sites the doctrine of innocent purchaser for value. But such a person claiming under this doctrine must show that, one, he purchased a legal estate/estate was purchased legally, and two, that there was at the time no notice or equitable interest registered against the property.  Paragraph 11, “A purchaser would only be regarded as bona fide if he bought property in good faith without notice of any defect or claims against the title. So that if the title in question was illegal or obtained through unlawful meant, the purchaser could not claim protection even if he was not aware of the illegality.” 

Determination of the Court 

The Court determined that the 2^nd Respondent obtained the suit property illegally. Therefore, having an illegal title of land, the 2^nd Respondent was incapable of passing a valid title to the 1^st Respondent. Further, the doctrine of bona fide purchaser for value could not be invoked to protect a title to an illegally acquired public land. The Court emphasized that due diligence requires more than just reliance on a title deed or registry search—it includes investigation into how the title was acquired, especially where the land was previously under government lease or occupation. 

The Court determined; 

1. The Judgment of the Court of Appeal, dated 8^th October 2021 is overturned 

2. The Petition of Appeal dated 23^rd November 2023 is allowed 

3. The Chief Land Registrar (3^rd Respondent) is directed to effect a cancellation of the 1^st Respondent’s title from the Proprietorship Section of the Land Register 

4. The Chief Land Registrar (3^rd Respondent) is directed to make an entry in the Proprietorship Section of the Land Register to reflect the appellants as the proprietors of the suit property in accordance with the provisions of the Land Registration Act 

5. The structures and developments erected by the 1^st Respondent on the suit property be removed and demolished by the 1^st Respondent within six months from the date of this Judgment under the supervision of the 5^th respondent 

CONCLUSION 

Land due diligence is not just a procedural step; it is a critical safeguard in any real estate transaction. By thoroughly investigating legal titles, zoning regulations, environmental conditions, and other potential encumbrances, stakeholders can mitigate risks, prevent costly disputes, and make informed investment decisions. Whether you’re a developer, investor, or end-user, comprehensive due diligence ensures that your land acquisition is not only legally sound but strategically wise. In an industry where oversights can lead to long-term setbacks, due diligence is your first and most essential line of defence.  

In Sehmi & another V. Tarabana Company Limited & 5 others [2025] KESC 21 (KLR), the Supreme Court recognised the huge investment made by the 1^st Respondent on the suit property but determined that even equity cannot cure an illegality. This decision by the highest Court in the country places greater responsibility on buyers, lawyers, and developers to investigate the authenticity of titles and avoid complicity in irregular allocations. 

Due diligence is not a box-ticking exercise. Land buyers especially, must go beyond the surface; verifying not just the existence of a title but also its valid origin and compliance with legal processes. Further, a registered title acquired through illegality cannot be protected. The need to uphold rule of law, land governance principles, and constitutional protections outweighed the financial loss incurred by the developer. 

At RISKHOUSE INTERNATIONAL, we boast of a team of expert investigators who have continually assisted our clients with their due diligence needs, through a mix of analysis of publicly available information, human source inquiries and overt investigations. Our team incorporates specialists in intelligence analysis, financial investigations, cyber security and legal advisory allowing our clients to make informed decisions and manage or avoid altogether, potential risks. Kindly reach us on email at info@riskhouse.co.ke. We are capable, willing and would be happy to help you with all your background checks needs.