Completion is a week away, and the buyer’s advocate has asked for a rates clearance certificate and a rent clearance certificate. Neither side is quite sure what the documents do, but without them the transfer cannot pass cleanly through the registry. They are routine documents, and routine documents deserve a moment of attention.
What is a rates clearance certificate?
County governments levy annual rates on land within their areas. Before a transfer is registered, a rates clearance certificate must be obtained from the county, confirming that rates have been paid and settling any arrears. Certificates are valid for a limited period, so the application has to be timed against the completion date. The certificate is issued against the parcel as recorded by the county, which is a useful cross-check against the title description.
What is a rent clearance certificate?
Where land is held on a leasehold term, land rent is payable to the lessor, usually the national or a county government. A rent clearance certificate confirms that rent is paid up to date and that no arrears stand against the lease. For leasehold transfers in Nairobi it sits alongside the county’s rates certificate. Arrears of rent, like rates, are recovered against the land, so the certificate protects both parties to the transaction.
Why do buyers insist on these certificates?
- Unpaid rates and rent attach to the land and can follow the new owner after completion.
- Registries and counties generally require current clearances before processing transfers and consents.
- Preparing the certificates surfaces other problems early, such as discrepancies in the parcel records.
- Sellers benefit as well, because clearances close out liabilities that would otherwise follow the asset.
How are the certificates obtained?
The seller applies to the county finance office for the rates clearance, paying the current year’s rates and any arrears, and to the relevant lands office for rent clearance on leasehold parcels. Parts of the process, including assessment and payment, can be initiated through eCitizen. CS Advocates LLP obtains clearances as part of the completion checklist in its Nairobi conveyancing practice; our practice areas page describes related land services.
For guidance on your specific situation, contact CS Advocates LLP, call, WhatsApp, or book a confidential consultation at our Westlands, Nairobi office.