Kenyan court clarifies what land buyers can recover after fraudulent deals collapse
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A ruling by Kenya's Environment and Land Court in Kisumu shows land buyers can recover money paid and expenses directly linked to a failed transaction — but only where the costs are proven and tied to the deal.
A Kenyan court has clarified what land buyers can recover when a property deal turns fraudulent and collapses, ruling that buyers may recover money paid for the land and some expenses directly linked to the failed transaction.
The decision stems from a case in which a buyer agreed to purchase two parcels of land in Manyatta, Kisumu County, for Ksh600,000 and paid Ksh260,000 as a deposit. She also paid for succession proceedings to help the seller obtain authority to deal with the property, and later funded a civil case after discovering the land had been registered in another person's name.
Without informing her, the seller settled that case with the registered owner. She reported the matter to the police, leading to the seller's conviction for obtaining money by false pretences and a three-year prison sentence. Seeking compensation, she asked the court for ownership of the land or a refund of Ksh780,000, including the deposit and money spent on succession proceedings, legal cases and other expenses.
A trial court declined to give her the property but ordered the seller to pay Ksh614,000, covering her deposit and Ksh100,000 in legal fees related to the criminal case. On appeal, the Environment and Land Court in Kisumu maintained that she could not be given the property because the seller had no title to transfer to her. Her attempt to cancel the registered owner's titles also failed, as there was not enough evidence to prove the registered owner participated in fraud.
The court found some additional expenses were directly connected to the fraudulent transaction and awarded a further Ksh170,000, covering Ksh60,000 in succession legal fees and Ksh110,000 for the civil case challenging the land registration, bringing the total award to Ksh784,000 with 14 per cent interest from March 25, 2024. Claims for upkeep, school fees, dowry and tracking expenses were rejected, with the ruling underscoring that money spent during a failed deal is not automatically refundable — buyers must prove the expenses were directly linked to the transaction, actually incurred and supported by evidence.