Sectional Titles vs. Share Certificates in Kenya: Which Offers Safer Property Ownership?
As Kenya’s real estate sector expands, many property buyers—especially in Nairobi and other urban counties—are faced with a critical legal decision:
Should you invest in a property with a sectional title or one backed by a share certificate?
While both models are used in apartment ownership, sectional titles offer significantly better legal protection, ownership clarity, and resale flexibility. In contrast, share certificates, often used in older developments and housing cooperatives, pose risks due to limited recognition under Kenyan land law.
With the implementation of the Sectional Properties Act, 2020, Kenya has aligned with global best practices for secure apartment ownership. In this article, WKA Advocates compares sectional titles and share certificates and explains why sectional titles are the preferred option in Kenya today.
What Is a Sectional Title in Kenya?
A sectional title is a legally registered ownership document that gives you exclusive rights over a specific unit—such as an apartment, maisonette, or office—within a larger building.
Key features:
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Registered at the Ministry of Lands
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Governed by the Sectional Properties Act, 2020
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Linked to a Certificate of Lease or Certificate of Title
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Includes shared ownership of common areas (e.g., staircases, lifts, parking)
Sectional title ownership is recorded in Kenya’s official land registry, and each development is managed by a Body Corporate (Corporation) made up of the unit owners.
What Is a Share Certificate?
A share certificate is issued by a company or cooperative that owns the apartment block. Instead of owning a unit directly, you hold shares in the entity, which gives you the right to occupy a specific apartment.
Key points:
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Not registered with the Ministry of Lands
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Based on company or society rules—not land law
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Offers no individual land title
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Ownership is through corporate shareholding, not land registration
This model is common in older buildings or developments created by housing societies, but it lacks the legal weight and financial flexibility of sectional titles.
Sectional Titles vs. Share Certificates: Key Differences
| Feature | Sectional Title | Share Certificate |
|---|---|---|
| Legal Framework | Sectional Properties Act, Land Registration Act | Companies Act, Co-operative Societies Act |
| Proof of Ownership | Registered Title or Lease | Share certificate (corporate ownership) |
| Registry Authority | Ministry of Lands | Registrar of Companies or Cooperatives |
| Ownership Security | High – Full ownership recorded in your name | Low – You own shares, not the property itself |
| Transferability | Easy – Can be sold, mortgaged, or inherited | Complicated – Requires board approval |
| Loan Eligibility | Accepted by banks and lenders as collateral | Often rejected by financial institutions |
| Control Over Unit | Full legal control (subject to by-laws) | Limited – Subject to company or board rules |
| Legal Recognition | Fully recognized under land laws | Not considered formal land ownership |
Why Share Certificates Are Risky in Kenya
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No Legal Title
You don’t legally own the property—only shares in the company that does. -
Board Dependency
Selling or transferring shares often requires board approval, which can delay or block transactions. -
Limited Access to Financing
Most Kenyan banks and lenders reject share certificates as security for loans or mortgages. -
Vulnerable to Mismanagement
If the cooperative or company is mismanaged or collapses, shareholders may lose occupancy rights. -
Succession and Inheritance Problems
Share certificates complicate inheritance, especially if there’s no clear nomination or will.
Why Sectional Titles Offer Safer, Modern Ownership
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Registered and Protected by Law
Your name is on the land registry, offering full legal protection and property rights. -
Easy to Sell or Transfer
You can transfer, lease, or mortgage your unit without needing permission from a board. -
Accepted by Financial Institutions
Banks prefer sectional titles when issuing home loans and mortgages. -
Transparent Management
A Body Corporate made up of unit owners manages common areas through registered by-laws. -
Simplified Succession
Sectional titles can easily be passed on through a will, grant of probate, or inheritance.
What the Sectional Properties Act Says
The Sectional Properties Act, 2020, requires that all apartments previously sold under long-term leases or share certificates be converted into sectional titles.
Benefits of conversion include:
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Clear ownership structure
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Better marketability and financing potential
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Compliance with Kenya’s digital land system (ArdhiSasa)
At WKA Advocates, we guide clients through every step of the share certificate to sectional title conversion process, ensuring full compliance with Kenyan law.
Advice for Buyers, Developers, and Housing Societies
✅ Buyers:
Always conduct a title search. Avoid committing to properties that offer only share certificates.
✅ Developers:
New developments must comply with the Sectional Properties Act. Issuing share certificates is no longer acceptable.
✅ Housing Cooperatives:
Older apartment blocks held under share certificates must initiate conversion to sectional titles to protect members and align with the law.
How WKA Advocates Can Help
We offer:
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Property due diligence and title verification
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Share certificate conversion services
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Preparation and registration of sectional plans
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Title transfers and registry updates
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Legal structuring of Corporations (Body Corporate) and by-laws
With decades of experience in land and property law, WKA Advocates ensures your property investment is secure, marketable, and future-ready.
FAQs: Sectional Titles vs. Share Certificates
1. Is a share certificate the same as a title deed?
No. A share certificate is a record of company ownership, not legal land ownership.
2. Can I get a mortgage using a share certificate?
Generally not. Most banks in Kenya require a registered sectional title as loan security.
3. Can I convert my share certificate into a sectional title?
Yes. WKA Advocates specializes in legal conversions to ensure full compliance and property protection.
4. Is buying a unit under a share certificate legal?
It’s not illegal, but it offers less protection and is discouraged under current property law.
5. What happens if the company that issued the share certificate is dissolved?
You may lose your right to live in the unit, as you don’t legally own the property.
6. How can I check if a unit has a sectional title?
Conduct a title search through the Ministry of Lands or consult WKA Advocates for assistance.
7. Which option is better for long-term security?
Sectional titles are far superior—they offer legal protection, financial flexibility, and ownership certainty.
Sectional Titles vs. Share Certificates in Kenya
In Kenya’s evolving property market, sectional titles are the gold standard for apartment ownership. They provide legal clarity, security, and the flexibility to finance, transfer, or inherit property without hurdles.
While share certificates still exist in older housing cooperatives, they lack the legal strength, recognition, and market appeal of sectional titles. For buyers and developers, sectional titles are the only legally compliant, future-proof model of property ownership in Kenya.
Need Help Converting or Buying Property Under a Sectional Title?
Contact WKA Advocates today for expert legal advice, title conversion services, and secure real estate transactions in Kenya.
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