Due Diligence For Off-Plan Properties: The Checklist For Every Homeowner And Real Estate Investor

When the deal is too good, think twice!


Information is power, and when it comes to buying property off-plan having the right type of information will help you, a prospective buyer or investor, make an informed decision on whether to invest or not.


Buying property off-plan simply refers to purchasing property before construction is commenced or completed. Developers use pre-construction layouts, site developmental plan and building plans to market and sell their properties (apartments, villas, bungalows, townhouses) to prospective home buyers and real estate investors.


Over the years, off-plan properties have gained traction due to the initial discounted prices offered by developers to buyers and the flexible payment plans. To investors, off-plan properties are a great investment because of the promise of property appreciation.  However, in the recent past, we have witnessed numerous cases where the promise offered by developers/sellers is not delivered either due to financial constraints or simply because they are unscrupulous. As a result, many Kenyans have invested in non-existent property thereby losing their money or have ended up with poorly constructed homes.


How to avoid being duped when it comes to purchasing property off-plan.


Below is a due diligence checklist every buyer or investor needs to look out for before committing their finances to an off-plan property:


  1. What is the Developer’s track record? Is the Developer Trustworthy and Professional?


A developer whether a Company or a Sacco should be duly registered under the laws of Kenya, have the requisite approvals from the County Government, NEMA and any other relevant authority for the development and most importantly have previous experience in real estate.


It is important to inquire on how long the company has been in the real estate business and how many completed developments (if any) it has undertaken. Interrogate on the mode of financing of the project. If the development is being constructed on a loan, insist that the same is clearly provided in the Sale Agreement and inquire on how long it will take for the developer’s financier to issue a partial discharge of charge over the apartment, villa or townhouse.


Take a step to visit the project site and find out if the owners of the completed apartments are happy with the homes they purchased. Inquire on whether the developer was responsive on any issues raised during and after construction.  Trustworthy developers are professionals and remain responsive even after handover of the property since new homes need some kind of post-delivery attention.


  1. Project viability of the development


It is vital to conduct a market survey to see what the current market offers and to investigate on the location of the project and the surrounding properties. Credible developers usually undertake a feasibility study of a project before commencing development to find out if the project is viable. As such, insist on the feasibility study report and site developmental plan for your review.


  1. Seek Legal Advice


Before committing any money in buying property off-plan and executing any legal documents pertaining to the transaction, it is prudent to engage the legal services of an Advocate who specializes in Conveyancing law. A conveyancer will help you in interpretation of the legal documents, guide you through the entire conveyancing process and above all protect your interests as a buyer/ investor.


  1. Perform a comprehensive search of the Property and Developer


The principle of Caveat Emptor, a Latin phrase meaning “buyer be aware” places responsibility on a buyer to sufficiently perform their due diligence on property before making any purchase.


As a rule of thumb, an official search (simple search) issued by a land registry is not enough. It provides very limited information regarding ownership of the property. We advise that you to undertake a comprehensive search of the property and the developer, and this involves the following:

  • physically visiting the project site;
  • obtaining a Green Card from the Ministry of Lands which provides a historical search of the land and all transactions relating to it;
  • performing a search at the County Registry to ascertain whether they are any pending rates and rent owed by the developer;
  • performing a company search of the developer in the Company Registry or SASRA if it is a Sacco; and
  • performing a search of the land from the Ndung’u Report- this is to rule out the fact that the Developer did not acquire the land illegally or irregularly.


  1. Negotiate for a payment plan that suits you and insist on issuance of official receipts by the Developer


An ideal payment plan should be staggered with the last installment of the purchase price capped on the anticipated completion date of the project. The Sale Agreement should clearly provide for the initial deposit or booking fee and the dates when the installments of balance of the purchase price are due. It is advisable when settling the purchase price to make cash or cheque deposits in the bank or transfer the amount via RTGS so as to ensure there is a paper trail. Never pay in cash or in kind. Thereafter, always insist on issuance of an official receipt by the developer for your records.


  1. Transparency and Accountability


A credible developer should be transparent and willing to divulge all crucial information relating to the project. Additionally, you should be provided with regular updates on the various stages of construction, how your funds are being utilized throughout the construction stages and when completion of works is expected.




When it comes to buying property off-plan, the professionalism, experience, expertise and track record of a developer are critical aspects to look at before investing. Further, it is important to perform your due diligence on the property and engage the services of professionals in the real estate market for advice, guidance and protection of your interests as the buyer or investor before signing any legal document or committing your finances.

Written by Cynthia Kitolo
Legal Officer & Advocate of the High Court of Kenya

Join The Discussion

Compare listings