Land Valuation Process, Fees, and Valuation Form in Kenya
What is Land Valuation?
Land valuation in Kenya refers to the process of determining the value of land for various purposes, such as for sale, purchase, mortgage, taxation, or compensation. It involves assessing the land’s location, size, topography, accessibility, zoning regulations, and other factors that may affect its value.
Land valuation is essential for various stakeholders, including property owners, investors, developers, government agencies, and financial institutions. It helps them make informed decisions about land use and investment, and it also ensures that land transactions are fair and transparent.
In Kenya, land valuation is carried out by qualified and licensed professionals, such as land surveyors, valuers, and estate agents. The process is regulated by various laws and regulations, including the Land Act, the Land Valuers Act, and the Physical Planning Act.
Purpose Of Land Valuation In Kenya
Valuing land is an important step when buying, selling, or seeking a loan on a property in Kenya. This process accurately measures the value of the land and provides a precise estimate of its cost or loan value.
The valuation is based on factors such as the property’s location, size, quality of the soil, topography, development potential, and market trends. This information can be used to make an informed offer on the property or to determine the cost of investing in land for building a home.
Land Valuation Form In Kenya
To obtain a land valuation form in Kenya, one can visit the website of the Ministry of Lands and Physical Planning. The website provides a Valuation Application Form that can be downloaded. However, this form is for valuation purposes and not for land registration.
For land registration, the State Department for Lands provides various forms under the Land Registration Act (LRA).
These forms include Form LRA 47 for transfer of land by a liquidator, Form LRA 48 for transfer by companies and limited liability partnerships, Form LRA 50 for application to be registered as proprietor by transmission, and Form LRA 51 for application to be registered as a trustee, among others.
The cost of land valuation in Kenya is provided under the Scale of Fees, Valuers Act Cap. 532 of the laws of Kenya. The Valuers (Forms & Fees) (Amendment) Rules, 2011 states that the fees for urban, rating, and agriculture valuation are 1.0% for the first Kshs. 2,000,000 and 0.25% for the residue.
The fees for compulsory acquisition valuation are 5% for the first Kshs. 2,000,000 and 0.25% for the residue. The minimum valuation fees are Kshs. 15,000 for any valuation, and the consultancy fees are a minimum of Kshs. 5,000 per hour where such consultancy does not involve valuation.
Valuation forms are essential when lenders are advancing loans against title deeds, payment in cases of disputes, for court sureties, book value, and during the determination of land rates. Some banks employ in-house valuers or use land value calculators.
However, in most cases, valuation is outsourced to independent valuers who are recognized on the lender’s panel.
The Institution of Surveyors of Kenya (ISK) is a land sector professionals’ organization made up of valuers, land surveyors, geomatic engineers, registered estate agents, property managers, building surveyors, land administration managers, and facilities managers.
Steps in Land Valuation
Land valuation process in Kenya involves several steps that are carried out to determine the value of a piece of land. The process is regulated by the Ministry of Lands and Physical Planning and is governed by the Land Act, the Land Registration Act, and the Valuers Act. H
ere are the main steps involved in the land valuation process in Kenya:
- Inspection: The first step in the valuation process is to inspect the land. A valuer will visit the property to assess the physical condition of the land, its location, size, accessibility, and any other relevant features.
- Research: The valuer will then conduct research to gather information on the land, such as its ownership, history, zoning, and any legal restrictions that may affect its value.
- Analysis: The valuer will analyze the data collected during the inspection and research to determine the value of the land. This involves applying various valuation methods, such as the market comparison approach, the cost approach, or the income approach.
- Report: The valuer will prepare a report that outlines the valuation process and the findings. The report will include a detailed description of the land, the valuation methods used, and the final value determined.
- Issuance of a valuation certificate: Upon approval of the valuation report, the valuer is issued with a valuation certificate. The certificate is used as proof of the property’s value and is required for various purposes such as taxation, sale, and transfer of ownership.
It’s important to note that the land valuation process in Kenya is highly regulated, and any valuer who fails to adhere to the set standards could face disciplinary action.
Cost of Land Valuation Fees in Kenya
These are fees charged for land valuation in Kenya, which are regulated by the Scale of Fees, Valuers Act Cap. 532 of the laws of Kenya.
The Valuers (Forms & Fees) (Amendment) Rules, 2011 stipulates the following fees:
Urban, Rating, and Agriculture Valuation
- First Kshs. 2,000,000 at 1.0 per cent
- Residue at 0.25 per cent
Compulsory Acquisition Valuation
- First Kshs. 2,000,000 at 2.0 per cent
- Residue at 0.5 per cent
- First Kshs. 400,000 per annum at 10 per cent
- Residue at 5 per cent.
Minimum Valuation Fees
- Kshs.15,000 for any valuation.
- A minimum of Kshs. 5,000 per hour for consultancy services that don’t involve carrying out a valuation or compiling a valuation report, and advising on property value.
Traveling Expenses and Disbursements
- The fees shall be based on the costs incurred during the valuation process.
Factors that Influence Land Valuation in Kenya
The value of land in Kenya is determined by various factors that can affect its price. Here are some of the most important factors:
- Location: The location of the land is a critical factor in determining its value. Proximity to essential amenities like schools, hospitals, and shopping malls can increase its value.
- Size: The size of the land is also important in determining its worth. Larger plots tend to have a higher price tag than smaller ones.
- Quality: The quality of the land and the type of construction on it can affect its value. Developed land with buildings on it tends to be more valuable than undeveloped land.
- Title deed: A clear title deed is worth more than land with disputed ownership or one that has been foreclosed.
- Proximity to a major highway: The distance from a major highway can affect the value of land, especially if it is located far from the city center.
- Nearby amenities: The presence of schools, hospitals, and other amenities can increase the value of land.
- Nature of the soil: The type of soil can affect the value of land. Fertile and well-drained land is more valuable than sandy or rocky land.
- Topography: The shape of the land can affect its value. Flat land tends to be more valuable than land with a lot of slope.
- Drainage: The drainage of the land can affect its value, especially if it is prone to flooding.
- Presence of underground water: If the land is located above an aquifer, it can increase or decrease its value, depending on the buyer’s needs.
- Presence of underground oil: If the land is located above an oil field, it can increase its value significantly.
- Natural resources: The presence of natural gas, oil deposits, and other precious metals can significantly increase the value of the land.
- Water availability: The availability of freshwater can increase the value of land, especially in areas where water is scarce.
- Land use: The current use of the land and its potential for rezoning can affect its value.