Scenario: A foreign buyer was evaluating several off-plan apartments in a Nairobi development and wanted to understand the developer—not only the title.
The property transaction itself required legal due diligence. Separately, the buyer needed to know whether the developer had the corporate authority, project funding, approvals, contractors, delivery history and completion controls necessary to deliver the units.
This case study therefore focuses on real estate developer due diligence in Kenya. For title, land-search and purchaser-payment issues, see Raven's separate Property Due Diligence Kenya case study.
The Buyer's Question
The buyer's question was: Can this developer realistically and lawfully deliver the off-plan project being marketed?
- Who owns and controls the developer?
- Does it own or control the development land?
- Has the board authorised the project and unit sales?
- What projects has the developer previously completed?
- How is the current project financed?
- Is the land charged to a financier and how will individual units be discharged?
- Are County, environmental and construction approvals consistent with the marketed project?
- Who are the contractor, architect, engineer and quantity surveyor?
- What protects purchasers if the developer cannot complete?
Developer Due Diligence Process
Corporate Ownership and Authority
Review company identity, shareholders, directors, beneficial ownership, authority to sell and any related development or holding companies.
Project Land and Financing
Understand the developer's interest in the land, registered financing, lender rights, project funding and the mechanism for releasing individual units.
Approvals and Project Scope
Compare marketed floors, units, amenities and use with approved plans and current regulatory records.
Delivery Track Record
Review previous projects, completion history, delays, purchaser complaints, litigation indicators and references where available.
Technical and Completion Capacity
Identify the contractor and consultants, programme, insurance, construction security, cost-to-complete information and completion controls.
Illustrative Developer Red Flags
1. Thin corporate capital relative to project scale
Nominal company capital does not prove insolvency, but a large development undertaken by a thinly capitalised special-purpose company increases the importance of project financing, guarantees and ring-fenced purchaser protections.
2. Project funding was not sufficiently transparent
A buyer should understand whether the project is equity-funded, financed by a bank, dependent on purchaser deposits or reliant on future sales. Each structure creates different completion risks.
3. Marketing claims needed reconciliation with approvals
Brochures, floor counts, amenities and unit descriptions should be checked against approved plans and any later variations. A marketed unit is not automatically an approved or registrable unit.
4. Previous delivery history was mixed
Past projects can reveal patterns in delay, handover quality, title issuance, purchaser disputes or management of defects. Track record is not conclusive, but it is commercially relevant.
5. Purchaser funds needed completion safeguards
Where the developer relies on early purchaser payments, the contract should allocate completion, refund, delay and financier risks clearly and provide a controlled payment structure proportionate to the exposure.
Developer Risk Assessment
| Risk area | Illustrative rating | Control |
|---|---|---|
| Corporate authority | Medium | Current company records and transaction-specific board authority. |
| Project funding | High until evidenced | Financing evidence, cost-to-complete review and lender structure. |
| Approval alignment | High | Current approved plans and written reconciliation of any variation. |
| Completion capacity | High | Programme, contractor capacity, insurance and performance security. |
| Purchaser recovery | Critical if unsecured | Stakeholder controls, refund security and contractual long-stop rights. |
Raven Africa Recommendation
The illustrative recommendation was do not treat the developer's registration or the project's physical progress as sufficient evidence of completion capacity. Proceed only after the funding, approvals, authority and purchaser-protection gaps are closed.
For broader neighbourhood, access, infrastructure and stakeholder exposure, the project may also require a separate site and project risk assessment.
Decision Value
Developer due diligence helps a buyer distinguish between three questions: Is the land real? Is the unit legally saleable? Can this developer actually deliver it?
Those questions should be answered together before substantial off-plan funds are released.
Real Estate Developer Due Diligence FAQs
Buying Off-Plan From a Kenyan Developer?
Raven Africa can review the developer's corporate identity, ownership, project structure, approvals, financing indicators, delivery history and completion risk alongside transaction-specific property due diligence.
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