Sectional Property Rights: Can A Developer Change the Deal After You Buy? Lessons from Rehman V. Luhar

Imagine you have decided to purchase three apartments within a serene complex of nine units, thoughtfully arranged in three blocks—A, B, and C—each containing three apartments. You secure one unit in Block A and two in Block C, while the developer, who owns the land, retains two apartments, one in Block A and another in Block B. The other apartments are sold to other purchasers. However, without consulting you or the other owners, the developer embarks on an ambitious plan to construct an additional apartment atop Block B, effectively adding a third floor to the structure which would ultimately alter the character of the entire apartment complex by adding another person who will also need to utilize the already existing common areas. When you raise concerns, he dismisses them, insisting that your ownership is limited strictly to your three units and that you have no say over his new development.

This was the case in Khalid Hussein Rehman vs Ahmed Jan Mohamed Suleiman Luhar (2022) KEELC 13714 (KLR), a dispute whose substratum revolved around Sectional Property rights, communal ownership of common areas in sectional developments, and a developer’s obligations under the law. The Plaintiff’s case was that the addition of a new apartment was illegal, as firstly, it needed consent of all the owners of the subleases and secondly, it did not have the requisite approvals from the County Government of Mombasa and National Environment Management Authority (NEMA). The argument of the Defendant was that the Plaintiff’s ownership was restricted to the three apartments and that he had no right to question the additional unit that the Defendant wanted to put up. Further, he argued that he not only had a proprietary interest in the two apartments that he retained for himself but also in the whole plot as there was no management company.

In considering the case, the Court delved deeply into the provisions of the Sectional Properties Act (2020) and reasoned that when a person is purchasing an individual unit, he/she is expected to be made aware of the plan that was approved, the particular unit within the approved plan that is being sold, and what would constitute the common areas. The Court asserted that pursuant to Section 43 of the Act, a developer is mandated to deliver to the purchaser a copy of the sectional plan or proposed sectional plan. Therefore, when a purchaser makes a decision to purchase, they do so in the knowledge that there would be no additional units made to the existing development. The Court was categorical that if a developer would be allowed to proceed and commence a development which purchasers did not contemplate, and which is a development that is to their detriment, the same would go against the spirit of the Sectional Properties Act as it would be akin to allowing a “developer to cheat purchasers to purchase and once “in the box” proceed to alter the development so as to enrich himself to the prejudice of the purchaser/s.”

The Court further underscored that if a developer wished to make any further alterations to an original plan, then he/she needed to seek consensus of the purchasers as they would stand to be directly affected with any new development.

On the argument by the Defendant that there was no management company in place that would have taken up dealings over common areas as envisaged under Section 22 of both the repealed and current Sectional Properties Act, the Court held that a developer cannot be allowed to take advantage of such a lapse so as to prejudice the purchasers of the existing units. In the end, the Court issued a permanent injunction stopping the Defendant from undertaking the development unless and until he complies with the mandatory provisions of the Sectional Properties Act, which requires conversion of the building to the Sectional Properties Act regime, and thereafter complying with the legal requirements regarding establishment of a management company which will then make decisions regarding common areas as envisaged under the Act.

This case underscores the protection of communal property rights in developments involving sectional ownership. The judgment further affirms that developers cannot unilaterally alter an agreed-upon development plan after selling units, as this undermines the expectations and legal rights of existing owners. The decision reinforces the principle that common areas in sectional developments are collectively owned and require consensus for any alterations.