Resolving outstanding land rate arrears is critical before selling property in Kenya. The seller is legally responsible for clearing all arrears, and buyers cannot register transfer without a Rates Clearance Certificate. Here's your complete step-by-step guide:
Step 1: Check for Outstanding Arrears
Where to Verify
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Visit the County Government Lands Office where the property is located
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For Nairobi properties: City Hall, Rates Department
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Access online portal: epayments.nairobi.go.ke (Nairobi City County)
What to Request
| Document | Purpose |
|---|---|
| Land Rates Statement | Shows all outstanding amounts, interest, and penalties |
| County Search Certificate | Confirms ownership and arrears status |
| Payout Figure | Exact amount needed to clear all arrears |
Important: Buyers should also verify this themselves before completing the purchase.
Step 2: Calculate Total Arrears Amount
Outstanding arrears typically include:
| Component | Description |
|---|---|
| Base Land Rates | Unpaid annual land rates (usually last 3 years) |
| Interest Charges | Accumulated interest on overdue rates |
| Penalties | Late payment penalties imposed by county |
| Water Bills | Outstanding municipal water charges (if applicable) |
Nairobi Example: If you haven't paid for 3 years, you'll owe:
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3 years of base rates
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12% annual interest (compounded)
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25% penalty on overdue amounts
Step 3: Make Payment for Arrears
Payment Options for Nairobi City County
| Method | Details |
|---|---|
| Cooperative Bank | Account: 01141709410000 (Nairobi City County Revenue Collection) |
| Equity Bank | Account: 1770279910476 (Nairobi City County Revenue Collection) |
| USSD 647# | Mobile payment via M-Pesa or Airtel Money |
| M-Pesa | Use epayments.nairobi.go.ke portal |
| NBK Branch | Pay at any National Bank of Kenya branch |
| In Person | City Hall cash office |
Payment Process
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Obtain your payment invoice from the Rates Department
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Pay the full outstanding amount (partial payments won't clear arrears)
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Receive original rates certificate receipt
Note: County must follow due process before auctioning—issue formal demands, allow opportunity to pay, seek court orders.
Step 4: Apply for Land Rates Clearance Certificate
Once arrears are paid:
| Step | Action | Timeframe |
|---|---|---|
| 1 | Return to Rates Department with payment receipt | Immediately |
| 2 | Submit documents for verification | Same day |
| 3 | Wait for processing | 2 hours (Nairobi) or up to 48 hours |
| 4 | Collect Rates Clearance Certificate | Ready |
Required Documents:
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Original rates certificate receipt
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Title deed + official search
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PIN certificate
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ID card
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Last 3 years' land rates receipts
Step 5: Obtain Land Rent Clearance Certificate (For Leasehold)
For leasehold properties, you also need:
| Requirement | Details |
|---|---|
| Where | Commissioner of Lands office |
| Cost | Free (no charge) |
| Purpose | Confirms land rent paid up to date |
| Necessary | Mandatory for leasehold transfers |
Step 6: Attach Certificates to Transfer Documents
When registering the property transfer:
| Document | Requirement |
|---|---|
| Rates Clearance Certificate | Must be attached to transfer documents |
| RCC Receipt | Include original payment receipt |
| Land Rent Clearance | Attach for leasehold titles |
| Original Land Rates Receipts | Last 3 years' receipts |
Legal Requirement: Section 38(1) of the Land Registration Act 2012 states the Registrar shall not register a transfer without a Rates Clearance Certificate.
Important Considerations
Who Pays?
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Seller pays all outstanding land rates before sale completion
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Seller is responsible for both land rates (county) and land rent (Ministry)
Buyer Protection
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Buyers can deduct arrears cost from purchase price if seller hasn't cleared them
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Buyers should verify County search before final payment
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Request clearance certificates before completing transaction
Consequences of Not Clearing Arrears
| Risk | Impact |
|---|---|
| Transfer blocked | Deeds Office won't process without RCC |
| Property auction | County may auction after 3 years of arrears |
| Legal penalties | Stiff penalties including property loss |
| Delay costs | Transaction stalls, buyer may sue |
Timeline for Resolution
Day 1: Check arrears → Get statement → Calculate total
Day 1: Make payment → Receive receipt
Day 1-2: Apply for RCC → Submit documents
Day 2: Collect Rates Clearance Certificate
Day 2+: Proceed with property transferSummary Checklist for Sellers
✓ Verify outstanding arrears at County Lands Office ✓ Calculate total amount (rates + interest + penalties) ✓ Pay full arrears amount (Cooperative/Equity Bank, USSD, M-Pesa) ✓ Receive original rates certificate receipt ✓ Apply for Rates Clearance Certificate (RCC) ✓ Collect RCC (ready in 2 hours in Nairobi) ✓ Obtain Land Rent Clearance Certificate (leasehold only) ✓ Attach RCC + receipts to transfer documents
Bottom Line: Clear all arrears before marketing the property to avoid delays and ensure smooth transfer.