The Lion King | 41
How to invest in real estate
R
eally, why should anyone
pay for a land or building
without first getting his or
her Lawyer to conduct a search
on the title to it? I would not like
to imagine the rationale. Oh,
may be, it is because you are
buying from a friend or any other
trusted person, but it still does not
matter. What if there has been
a defect or encumbrance on the
title to the land that has not been
obvious to that friend or trusted
person?
Here is what the courts have said
regarding the need to investigate
the title to any land or house
before buying: “A PURCHASER
WHO DOES NOT TAKE THE
TROUBLE TO INVESTIGATE THE TITLE
OF THE VENDOR... WOULD HAVE
HIMSELF TO BLAME”
I also think that beyond the
purchase receipt, it is highly
beneficial to have a DEED of
Assignment, of Sublease, etc
prepared by a Lawyer and this
does not usually cost so much,
at least compared to its benefits.
Ensure that the Deed is duly
executed by the parties to the
conveyance (the rightful owner
must sign). The Purchase Receipt
only is really not enough.
Generally, here is a checklist of
some of the issues you ought to
consider in choosing a land or
building to purchase:
1. Clean title.
A lawyer should
conduct the search & other
enquiries on the title
2. Location,
location & location.
3. Price
4. Size
of the land
5. Physical or structural condition
of the building
6. Is the building currently
occupied by tenants?
If
occupied, what is the nature
of the tenancies (including
tenor, rents, etc) and how
easily can the existing tenants
be managed or ejected?
7. What has been the compli-
ance status on the property?
Are there arrears of tenement
rates or other taxes on the
property?
8. Are there arrears of utility bills
(Light Bill, Water Rate, etc) on
the property?
9. What is the building to land
ratio?
How much of the avail-
able land has been taken up
by the building? Can the land
be used more profitably?
By Daniel Wajuihian
Investment
