The US government has raised the alarm about a renewed surge of fake title deeds in Kenya, dealing a reputational blow to the country in the race for foreign direct investment (FDI).
A report from the Office of the United States Trade Representative (USTR)—which serves as President Donald Trump’s primary adviser on trade—has for the first time cited the bogus land ownership documents as a barrier for investments in Kenya.
The report serves as a reference for trade deals between the US and foreign countries, signalling that the menace of fake titles will be placed on the table in trade and investment talks between Nairobi and Washington.
The intricate web of a fraudulent syndicate is manipulating records at the land registry, creating fake titles that have been used in fraudulent land transactions, including access to bank loans.
This has seen banks, workers and companies lose billions of shillings via the bogus titles and manipulated official records, catching the attention of Washington.
“The process for leasing developed land and property is clear and established, but the process for obtaining leasehold title of undeveloped land is opaque and unreliable,” says the report from the USTR.
“For undeveloped land, investors risk receiving fake title deeds or leasing a plot with multiple titles and unauthorized sales.”
The Ministry of Land is betting on cleaning up the mess through reforms, including moving decades-old records online that will make it possible for people to register and verify titles on the internet.
The government argues that digitising registration documents will help prevent fraudulent dealings by sealing loopholes that allow duplicate titles to be created, which are then used to transfer land without the rightful owner’s knowledge.
Some lawyers and cartels have opposed the digitisation plan, slowing its implementation.
In November last year, Lands Cabinet Secretary Alice Wahome, without divulging specifics, announced that the government had enhanced security features of title deeds to prevent fraudsters from producing counterfeits.
This came months after the government printer went public via a gazette notice that 367 sheets of paper used for printing title deeds had been stolen from its custody, underlining the efforts of the land fraud syndicate.
Land remains one of the most treasured and emotive assets across the continent.
In Kenya, the farming sector, which accounts for 25 percent of GDP, has upped demand for land, which is now viewed as an essential commodity.
This comes amidst new demand from the real estate sector, buoyed by rising urbanisation and growing appetite for home ownership.
This land craze has birthed a network of sophisticated cartels who dupe desperate buyers.
Land officials working in the archives department are the most culpable.
The department is home to the green card or the “birth certificate” of land parcels, which captures a detailed history of a piece of land, including ownership, transactions, and encumbrances.
The card is crucial for due diligence and ensuring a smooth and legal transfer of land ownership.
The ‘green card’ also has details of the land’s acreage, registration number, names of the registered owner, address, national identity card number, title deed number and when it was issued, and the signature of the land registrar.
With such information, the fraudster starts the mission of forging documents similar to the originals.
They forge the land’s ownership documents such as the title deed, ID card and signature of the land registrar who signed the last entry of the genuine proprietor. They also alter the records in the registry to match the forgeries.
After forging the documents, brokers later come in with potential buyers.
The buyer would be given the documents, unaware they are forgeries, to conduct their search at the land registry and compare the details.
The results of the search turn positive since the copies of the documents are generated from those in the official archives.
Fraud racket
Banks have not been spared by the fraudsters.
In 2019, NCBA and Equity Bank lost nearly Sh500 million through a title deed fraud racket after the Court of Appeal ruled that Co-operative Bank of Kenya had the right to a property used to acquire loans from the three banks.
The three lenders laid claim on the single property in Riruta, which is registered in different names and was used to secure over Sh450 million in loans.
Judges said that the circumstances surrounding the dispute between the three banks were fraught with fraud, which neither lender could be strictly responsible for, as they all believed they held a first charge on the Riruta plot.
The suit brought to the fore a title deed racket that has seen lenders lose billions of shillings on non-existent security.
The citation of fake titles in the authoritative US report looks set to thrust the hazard of Kenya’s fake titles into the global limelight.
