Property Due Diligence

Due Diligence

Due diligence is an undertaking that aim to de-risk investors from all possible potential risks that may be associated with a particular property – land or house.
Due diligence – is the difference between a profitable property and a costly mistake.

More often than not, investors are not professionals in property matters, and thus it’s a professional obligation of the property experts such as registered surveyors, registered valuers, registered lawyers and registered property agents to act in utmost good faith, to recommend or undertake due diligence to protect the monies of an investor for a considerable consideration.

Some of the possible potential risks are

• property’s condition,
• transmission history,
• legal status/requirements,
• nature of deeds of ownership,
• geo-mapping and any related dangers.

Over the years, Africa has taken great steps in improving land governance and administration.

For example, in Eastern African countries such as Kenya, Uganda, the governments in support of development partners have promoted regularization, registration of lands, and issuance of deeds of proprietorship.

Kenya has experienced opening of new land registration offices.

The over-used narrative of investors’ inability to get deed of ownership is void.

The current potential risk is not getting title but rather verifying it, it thus, behooves the investor to thoroughly establish the root of title document before any transaction.
It is equally the duty of involved parties in a transaction to protect and show the roots of their titles.

Benefits of due diligence;

• Mitigation of risks; ownership, restrictions, encumbrances, obligations, compliance, servitude etc.
• Investor’s goals re-alignment (decision support tool)
• Pro tool for negotiation – never split the difference

Investing without due diligence is operating in the dark.