When A Clean Title Is No Longer Enough

LEGAL DUE DILIGENCE IN KENYAN LAND TRANSACTIONS AFTER THE DINA MANAGEMENT CASE

Introduction

For decades, the advice given to anyone buying land in Kenya was along the lines of the following skeleton: Conduct an official search at the land registry, confirm the seller is the registered proprietor, verify there are no encumbrances, pay the purchase price and register the transfer. The certificate of title that emerged was treated by buyers and lenders alike as the final word on ownership. Kenya’s land laws were built on a system that promised three things to anyone buying land: that the official government record would accurately reflect who truly owns what; that buyers would not be ambushed by old, hidden deals made before they came along; and that if something still went wrong, the government would compensate them. This system has long been referred to within legal circles as the “Torrens system”.

That comfort has been disturbed. The Supreme Court’s decision in Dina Management Limited v County Government of Mombasa & 5 Others [2023] KESC 30 (KLR), delivered on 21 April 2023, has reframed the conversation around land ownership in Kenya. The judgment has not abolished the indefeasibility (legal superiority) of a registered title, but it has placed a heavy qualification on it. A registered title is now only as strong as the legality of the process by which it was first issued. For investors, developers, banks and individual purchasers, due diligence is no longer a mere procedural formality; it now serves as a principal line of defence between a sound investment and a mere title document.

This article examines the practical demands of due diligence in Kenya, dissects the Dina Management decision, traces how courts have applied it, considers the questions the pending Teleposta Pension Scheme appeal may put before the Supreme Court and offers practical guidance on the way forward.

Due Diligence in Practice

Due diligence in a Kenyan land transaction is the structured process of verifying that the property being acquired is what the seller says it is, that the seller is entitled to sell it and that the buyer will receive a clean and enforceable interest. It traditionally covers four areas. Title verification, through an official search under section 34 of the Land Registration Act, 2012, establishes the registered proprietor, the tenure, the size of the parcel and registered encumbrances. Verification of the seller’s identity and capacity covers company records, board resolutions, identification documents, KRA PINs, spousal consent under the Matrimonial Property Act, 2013 and grants of representation for estates. Statutory and regulatory checks cover land rates and rent clearance, consents from the National Land Commission or Land Control Board and approvals under the Physical and Land Use Planning Act, 2019. Physical and planning verification involves a surveyor’s site visit, beacon and boundary confirmation, occupancy checks and review of zoning and change-of-user approvals.

The risks these checks are designed to catch include forged title documents, multiple title deeds over the same parcel, undisclosed family interests, late-registered encumbrances, and parcels that fall within road reserves, riparian zones or other protected areas. What Dina Management has added is a much older and harder risk to detect: the possibility that the very first allocation of the parcel, decades before the current transaction, was unlawful. That risk now sits at the core of every land acquisition in Kenya.

The Dina Management Decision

The Facts

The dispute concerned property MN/1/6053, a beachfront parcel in Nyali, Mombasa. The land was allocated in 1989 to the then President, His Excellency Daniel Toroitich Arap Moi, who later transferred it to Bawazir & Company (1993) Limited. Bawazir then sold the property to Dina Management Limited, which became the registered proprietor.

In September 2017, the County Government of Mombasa, asserting that the land was a public access route to the beach, entered the property without prior notice, demolished the perimeter wall and levelled the property to the height of the adjacent beach. Dina Management filed a constitutional petition at the Environment and Land Court (ELC). The ELC (Omollo J.) held that the original alienation had been unprocedural and unlawful and dismissed Dina’s petition. The Court of Appeal (Warsame, Musinga and Murgor JJ.A.) affirmed that decision on 4 June 2021. Dina Management appealed to the Supreme Court.

The Holding

The Supreme Court dismissed the appeal. Three propositions emerge from the reasoning.

The first is structural. A title is the end product of a process. If the underlying process did not comply with the law, the title that emerges from it cannot be cloaked in indefeasibility. The first allocation to President Moi having been irregular, no valid legal interest passed to Bawazir and none could in turn be passed to Dina Management.

The second is constitutional. Article 40 of the Constitution protects the right to property, but Article 40(6) excludes from that protection any property “found to have been unlawfully acquired.” Once the irregularity at the root of the title was established, Article 40 ceased to provide refuge and the land was vested in the County Government of Mombasa under Article 62(2).

The third, and the most consequential for purchasers, concerns the doctrine of bona fide purchaser for value without notice, in which a good-faith buyer acquires legal title to property for valuable consideration without actual or constructive knowledge of any prior adverse claims, defects in title or fraud. The Court held that the doctrine is a shield against unregistered equitable interests, which entails property not formally recorded on the land register. It is not a shield against an illegal root of title. Where the foundation of the title is challenged, a buyer cannot defend ownership simply by waving a certificate of title. The buyer must demonstrate that the title was acquired through a lawful, formal process, free of any encumbrance, including interests that may not appear on the register. The Court also observed that the suit property, as a beachfront parcel, was “always bound to be attractive and lucrative,” and Dina Management ought to have been “more cautious in undertaking its due diligence.”

Reshaping Three Doctrines

Read together, these court decisions have done three things:

1. Procedure is as important as the title. They have qualified the indefeasibility of the title. Section 26(1) of the Land Registration Act treats the certificate of title as first impression (prima facie) evidence of ownership, subject to challenge on grounds of fraud, misrepresentation or where the title was acquired illegally, unprocedurally, or through a corrupt scheme. Dina Management gives that proviso real teeth. The mirror and curtain principles of the Torrens system that requires the land register to accurately reflect all current interests in a property and protects buyers so they don’t have to look further the register, respectively, survive only to the extent that the original allocation was lawful.
2. No automatic protection for an innocent purchaser. The principle of bona fide (good faith) purchaser for value without notice (of prior irregularity, fraud, etc) has been narrowed. The principle no longer protects a purchaser whose title traces back to an illegal allocation, however many transfers have intervened and however genuinely unaware the purchaser may have been of the original irregularity.
3. Due Diligence scope redefined. A registry search and a clean title is not by itself due diligence. The Supreme Court effectively imported the older Court of Appeal authority of Munyu Maina v Hiram Gathiha Maina, Civil Appeal No. 239 of 2009, which held that when the root of title is challenged, the registered proprietor must go beyond the instrument and prove that the acquisition was lawful, formal and free of any third party interests.

Practical Implications

For buyers and investors, protection is no longer guaranteed by the sole reason of a paid purchase price. It is tied to the original allocation procedure under the applicable law at the time of transacting. Where the parcel was previously public land, that procedure is key. 

For banks and lenders, the comfort that a registered charge over a registered title was historically thought to provide is reduced and will be expounded upon by the Supreme Court in the Teleposta Appeal. Lenders must look beyond the standard valuation and search to require evidence of the root of title, particularly for properties that originated from public allocations.

For developers, a challenge to the root of the title midway through construction is catastrophic. Dina Management makes it imperative to commission historical title investigations before deal close and to draft sale agreements with carefully constructed warranties, indemnities and representations, supported by title insurance where available.

For advocates handling conveyancing, the standard checklist no longer protects clients adequately. The duty of care now extends to the chain of title, including the green card, allotment letters, Part Development Plans and consents that ought to have been obtained at first allocation. Records of the steps taken should be preserved, since the courts will scrutinise the diligence of a party who later claims bona fide status.

A registry search captures the present register, not its history. It does not reveal whether the land was, at first allocation, public utility land, riparian reserve, road reserve, forest land or set apart for a public purpose, nor whether the requisite Part Development Plan was prepared or whether the alienating authority had the power to alienate. In Dina Management, none of these facts were on the register, yet all of them proved decisive.

How the Courts Are Applying Dina Management

The Supreme Court’s reasoning in the Dina Case has been adopted and extended by multiple courts.

In Sehmi & Another v Tarabana Company Limited & 5 Others (SC Petition No. E033 of 2023), decided on 11 April 2025, the Supreme Court reaffirmed that an innocent purchaser cannot acquire a valid title from a root that is itself invalid and clarified that the bona fide purchaser principle operates against equitable interests (beneficial rights), not legal challenges to the root of title. The decision also recognised that where a lessee has initiated lease renewal before expiry, the principle of legitimate expectation ensures fairness when public authorities backtrack on promises or established practices.

The Environment and Land Court has applied the Dina Management analysis in a steady stream of decisions, repeatedly invoking the principle that a registered proprietor must, when the root of title is questioned, “go beyond the instrument” and demonstrate the lawfulness of the acquisition. The reasoning has reached disputes ranging from contested allocations of school and institutional land to private subdivisions traceable to an irregular parent title.

The Court of Appeal has reinforced the position. In Teleposta Pension Scheme Registered Trustees v Intercountries Importers and Exporters Limited & 5 Others (Civil Appeal 293 of 2016) [2024] KECA 870 (KLR), decided on 12 July 2024, the Court allowed the pension scheme’s appeal, declared the title held by Intercountries irregular and illegal and directed its cancellation. The parcel had originally vested in the Kenya Posts and Telecommunications Corporation, the pension scheme’s predecessor and the subsequent allocation to a private allottee was unlawful. The fact that Intercountries had purchased through a chargee’s exercise of statutory power of sale did not save its title.

The pattern is showing. Courts are willing to look behind the register, willing to set aside titles that fail the legality test at root and increasingly resistant to defences founded on the bona fide purchaser principle alone.

Forward-Looking: The Teleposta Appeal

The Teleposta litigation has now progressed to the Supreme Court. In Teleposta Pension Scheme Trustees Registered v Intercountries Importers and Exporters Limited & 5 others (Application E023 of 2025) [2026] KESC 27 (KLR), certified by the Court of Appeal as raising matters of general public importance, a position recently upheld by the Supreme Court in the ruling delivered on 31 March 2026.

The appeal is pending before court and it would be premature and unethical to comment on its merits. We would thus restrict ourselves to the questions raised in the Court of Appeal which included:

1. The standard of due diligence to be expected of a purchaser at a chargee’s auction; 
2. The position of a chargee bank that took its security in good faith and in reliance on a registered title which is later challenged at root; 
3. The interaction between vesting orders made by ministerial Legal Notice (in Teleposta‘s case, Legal Notice No. 131 of 2001) and prior allocations to private parties; 
4. The effect of National Land Commission gazette notices purporting to revoke titles, in light of the constitutional and statutory limits on extra-judicial revocation; and 
5. Whether the Dina Management decision requires further refinement in cases involving institutional land that has passed through multiple statutory vesting and conveyancing arrangements.

Whichever way the Supreme Court rules, the decision is likely to be the most significant pronouncement on indefeasibility of title since Dina Management itself. Interested parties with ongoing or contemplated transactions in properties of complex institutional or statutory issues would be well advised to monitor it closely.

The Way Forward: Practical Guidance

The new legal environment calls for a more rigorous approach to due diligence, calibrated to the value and complexity of each transaction.

Tracing the root of the title is essential for any high-value or strategically important parcel of land. Counsel should pull the full registry record: the property register (the “green card” for Registered Land Act titles, or the equivalent register for RTA and Government Lands Act parcels) and the parcel file. Where the chain traces to a public allocation, this extends to the letter of allotment from the Commissioner of Lands or, currently, the National Land Commission (NLC), and the Part Development Plan under the Physical and Land Use Planning Act, 2019. The cadastral position should be verified against the deed plan or Registry Index Map, both anchored in the Land Registration Act, 2012 read with the Survey Act (Cap. 299).

Every consent the law required at the material time must also be on file: Land Control Board consent under the Land Control Act (Cap. 302) for controlled agricultural transactions; lessor’s or NLC consent for leasehold and public land; spousal consent under the Matrimonial Property Act, 2013 and the Land Registration Act; and chargee’s consent. None of this is complete in 2026 without a parallel check on Ardhisasa, where uneven record migration has itself become a due-diligence flag. Where the parcel originated from public land, the alienating authority’s power to alienate should be confirmed.

The Report of the Commission of Inquiry into the Illegal/Irregular Allocation of Public Land (the Ndung’u Report) remains a useful starting point for identifying parcels flagged as irregularly alienated. A negative finding does not guarantee legitimacy, but a positive hit is an immediate red flag.

Physical inspection and an occupancy check are indispensable. Walking the boundaries, speaking to neighbours and verifying physical features against the deed plan can surface adverse claims that no register will reveal. Beachfront, riparian areas (within 30 metres of a watercourse under Water Resources Authority guidelines), road reserves, forest reserves and parcels adjoining institutional land warrant heightened scrutiny. Sale agreements should be negotiated with robust contractual protection: vendor warranties as to root of title, indemnities against historical irregularities and a portion of the purchase price held in escrow for a defined period. Title insurance where available is increasingly worth its premium for high-value transactions.

Lenders should update internal credit and legal policies to require root-of-title verification for charges over land originating from public allocations. Developers should build the timing and cost of historical title investigation into deal economics; a short pre-acquisition window is far less expensive than litigation midway through construction. The steps taken should be documented in every case, since concurrent evidence of diligence will be central to any later defence.

Conclusion

Dina Management case did not invent due diligence. It raised the standard and reallocated the risk. A registered title remains a valuable asset, but it is no longer a complete answer. Buyers, lenders and developers in Kenya now operate in a legal environment where the legality of an allocation made decades ago can resurface and unwind a recent acquisition. The Sehmi decision has reinforced this position, and the Court of Appeal’s decision in the Teleposta case has applied it to a high-value commercial dispute now headed for the Supreme Court.

The market has begun to adjust. Sophisticated investors are commissioning deeper title investigations; lenders are revisiting their credit and security frameworks and conveyancing practitioners are extending their searches well beyond the four corners of the register. Those who continue to rely on a clean search alone do so at their peril.

The message from the Supreme Court is that the title is the end of a process, not the beginning of certainty. Certainty comes from understanding that process from its origin. Those who invest in that understanding and who engage advisers who know how to interrogate it, will continue to transact with confidence in Kenya’s real estate market.

Sources and Further Reading

1. Dina Management Limited v County Government of Mombasa & 5 Others (Petition 8 (E010) of 2021) [2023] KESC 30 (KLR) (21 April 2023): https://new.kenyalaw.org/akn/ke/judgment/kesc/2023/30/eng@2023-04-21
2. Sehmi & Another v Tarabana Company Limited & 5 Others (SC Petition No. E033 of 2023, judgment of 11 April 2025): https://new.kenyalaw.org/akn/ke/judgment/kesc/2025/21/eng@2025-04-11
3. Teleposta Pension Scheme Registered Trustees v Intercountries Importers and Exporters Limited & 5 Others (Civil Appeal 293 of 2016) [2024] KECA 870 (KLR) (12 July 2024): https://new.kenyalaw.org/akn/ke/judgment/keca/2024/870/eng@2024-07-12
4. Teleposta Pension Scheme Trustees Registered v Intercountries Importers and Exporters Limited & 5 others (Application E023 of 2025) [2026] KESC 27 (KLR) (31 March 2026) (Ruling):  https://new.kenyalaw.org/akn/ke/judgment/kesc/2026/27/eng@2026-03-31 

5. Maina v Maina (Civil Appeal 239 of 2009) [2013] KECA 94 (KLR) (10 December 2013) (Judgment): https://new.kenyalaw.org/akn/ke/judgment/keca/2013/94/eng@2013-12-10
6. Constitution of Kenya, 2010, Articles 40, 60, 62 and 63: 
7. Land Registration Act, 2012 (No. 3 of 2012)
8. Land Act, 2012 (No. 6 of 2012)
9. Report of the Commission of Inquiry into the Illegal/Irregular Allocation of Public Land (the Ndung’u Report, 2004): https://libraryir.parliament.go.ke/bitstreams/a5b2ebda-864c-4c41-9598-eecab772d58a/download 
10. Oraro & Company Advocates, “The Supreme Court Pronounces Itself on the Doctrine of a Bona Fide Purchaser” (June 2023):

The Supreme Court Pronounces Itself on the Doctrine of a Bona Fide Purchaser

11. Kabarak Law Review Blog, “The Bona Fide Purchaser Conundrum and the Validity of Property Titles” (Terry Ombati, 27 September 2023): https://kabarak.ac.ke/klrb/the-bona-fide-purchaser-conundrum-and-the-validity-of-property-titles-insights-from-the-supreme-court-of-kenya