Discharge of Charge Kenya

What is The Discharge of Charge Kenya?

In Kenya, a charge is a registered legal instrument that gives the holder a security interest in a property. This security interest allows the holder of the charge to recover money owed to them by the owner of the property.

However, a charge can only be canceled by using another legal instrument in the prescribed form R.L 10, known as Discharge of Charge.

The Discharge of Charge is a legal document that is used to cancel or discharge a charge that has been registered against a property. The document must be executed by the holder of the charge and must be in the prescribed form.

Once the Discharge of Charge has been executed and registered with the relevant authorities, the charge is effectively canceled and the holder of the charge loses their security interest in the property.

For example, if a person takes out a loan from a bank and uses their property as collateral, the bank will register a charge against the property.

This charge gives the bank a security interest in the property, allowing them to recover the money owed to them if the borrower defaults on the loan.

Once the loan is fully paid off, the bank must execute a Discharge of Charge to cancel the charge and release their security interest in the property.

Another example would be if a property owner sells their property, the new owner will typically require the previous owner to provide a Discharge of Charge to prove that any charges registered against the property have been canceled and that they have a clear title to the property.

The Discharge of Charge is an important legal document in Kenya that is used to cancel a charge and release the security interest held by the charge holder in a property.

It is a necessary step to ensure that the property has a clear title and is free from any outstanding charges or encumbrances.

Who Prepares A Discharge Of Charge?

According to the testimony of DW1 (Defense Witness 1) in a case, it is the borrower who typically prepares a Discharge of Charge in Kenya.

The borrower will instruct and pay an advocate (lawyer) to prepare the document and forward it to the bank for signing. If the borrower fails to pay the advocate, their account may be debited if there is sufficient money in the account.

This practice is common because the borrower is the one who has the most interest in canceling the charge and obtaining a clear title to the property.

By preparing the Discharge of Charge themselves, the borrower can ensure that the document accurately reflects the terms of the loan agreement and any other relevant details.

However, it’s important to note that the borrower must follow the legal requirements for preparing and executing a Discharge of Charge.

The document must be in the prescribed form (R.L 10) and must be executed by the holder of the charge (usually the bank or lender) in the presence of a witness.

Once the document has been properly executed and registered with the relevant authorities, the charge is effectively canceled and the borrower has a clear title to the property.

How Much Does It Cost To Discharge A Title Deed In Kenya?

In Kenya, discharging a title deed involves various costs, including the cost of the certificate, the cost of searching for the title deed, and the cost of obtaining consent to transfer from the National Land Commission.

The certificate required for the discharge of a title deed costs approximately Kshs 10,000. To apply for a search on the title deed, which takes no more than three working days, one is required to pay Kshs 500.

The seller must then apply for and obtain consent to transfer from the National Land Commission, which costs about Kshs 1,000 and takes no more than two weeks to complete.

It’s important to note that these costs are subject to change and may vary depending on the specific circumstances of the transaction.

How Much Is Stamp Duty For Discharge Of Charge In Kenya?

In Kenya, the stamp duty rate for a Discharge of Charge is 0.05% of the amount that had been secured by the Charge. This means that the amount of stamp duty payable for a Discharge of Charge will depend on the amount that had been secured by the original Charge.

For example, if the original Charge had secured an amount of Kshs 1 million, the stamp duty payable for a Discharge of Charge would be Kshs 500 (0.05% of Kshs 1 million).

It’s important to ensure that the correct amount of stamp duty is paid, as failure to do so may result in penalties or other legal consequences.

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