What you need to know about Off-Plan Projects

More than ever, many people are now looking to invest in off-plan properties. However, it is unfortunate that more often than not, only few people have managed to make a profit or make it to their property. As with most investments, seeing is believing – especially since we’ve all heard of many cases where developers have disappeared with people’s money.

As with most investments, seeing is believing. Nonetheless, Kenyans are still keen in investing in these off-plan properties. If you belong to these group then here’s what you need to know;

1. Reputation of the developer
Before engaging in an off-plan investment, it is important to do a historical search over the record of the real estate company. Does the company have any successful projects? How long did those projects take to complete? Are there any disgruntled customers of the company? A good real estate company should have a record of timely delivery of projects.

2.Project Completion Timelines

Before signing any contract for an off-plan development, an investor should be able to judge as to whether or not the timelines specified in the contract, for the delivery of the project to completion, are reasonable. Some companies insert clauses in contracts for completion of development in less than 6 months. When the deal is too good, think twice.

3.Project Finance

An investor should be able to compare the cost of investing in off-plan developments with the real estate company, vis a vis engaging in their own purchase and development of the land. As an investor, I will compare the cost of buying a house that sits on a quarter acre, using off-plan methods, with actually buying the land at current rates, and building myself the house. If the cost is greatly variant, it should cause me to inquire further.

4.User of the Land

An investor in off-plan development should also conduct a due diligence search on the land to determine the registered “user” of the land. The term “user” in this case denotes the allowable activities on the land. The “user” of land for an off-plan development, must be “residential” in nature and not “agricultural”.

If a company is selling a residential project that is based on land which is designated as “agricultural”, the project will be bound to fail, unless a change of use is first conducted before the project is undertaken.


The land should also be free from any encumbrances such as mortgages, charges, and any other superior rights of third persons over the land. This is for the purpose of avoiding unnecessary court litigation over stalled projects.

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