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closing statement real estate example
Introduction
In the context of real estate transactions in Kenya, a closing statement is a crucial document that outlines the final terms and conditions of the sale, including the financial details and the transfer of ownership. This document is typically prepared by the advocate representing the buyer or the seller and is signed by both parties to signify their agreement to the terms. The closing statement ensures that all legal and financial obligations are met before the property changes hands.
Table of Contents
Legal Framework
1.1 The Constitution of Kenya
1.2 The Land Act, 2012
1.3 The Land Registration Act, 2012
1.4 The Law Society of Kenya (LSK) Conditions of Sale
Components of a Closing Statement
2.1 Identification of Parties
2.2 Property Description
2.3 Purchase Price and Payment Terms
2.4 Adjustments and Prorations
2.5 Representations and Warranties
2.6 Closing Costs
2.7 Transfer of Ownership
2.8 Signatures and Date
Sample Closing Statement
3.1 Identification of Parties
3.2 Property Description
3.3 Purchase Price and Payment Terms
3.4 Adjustments and Prorations
3.5 Representations and Warranties
3.6 Closing Costs
3.7 Transfer of Ownership
3.8 Signatures and Date
Conclusion
1. Legal Framework
1.1 The Constitution of Kenya
Article 40: Provides for the protection of the right to property, ensuring that every person has the right to acquire and own property.
1.2 The Land Act, 2012
Section 38: Outlines the procedures for the transfer of land, including the requirement for a written agreement.
Section 44: Details the obligations of the seller and the buyer in a land transaction.
1.3 The Land Registration Act, 2012
Section 24: Provides for the registration of land and the issuance of title deeds.
Section 26: Establishes the conclusive evidence of ownership provided by a title deed.
1.4 The Law Society of Kenya (LSK) Conditions of Sale
These conditions provide a standardized framework for real estate transactions, ensuring that both parties are aware of their rights and obligations.
2. Components of a Closing Statement
2.1 Identification of Parties
Buyer: Name, address, and identification details.
Seller: Name, address, and identification details.
2.2 Property Description
Detailed description of the property, including the title number, location, and any relevant features.
2.3 Purchase Price and Payment Terms
The agreed purchase price.
Payment terms, including any deposits made and the balance due at closing.
2.4 Adjustments and Prorations
Adjustments for property taxes, utilities, and any other prorated expenses.
2.5 Representations and Warranties
Statements by the seller regarding the condition of the property and any encumbrances.
2.6 Closing Costs
Breakdown of all closing costs, including legal fees, stamp duty, and registration fees.
2.7 Transfer of Ownership
Details of the transfer process, including the handover of keys and the registration of the title deed.
2.8 Signatures and Date
Signatures of both parties and the date of the agreement.
3. Sample Closing Statement
3.1 Identification of Parties
Buyer: John Doe, P.O. Box 12345, Nairobi, ID No. 12345678.
Seller: Jane Smith, P.O. Box 67890, Mombasa, ID No. 87654321.
3.2 Property Description
Title Number: Nairobi/Block 123/456.
Location: Karen, Nairobi.
Description: A four-bedroom house with a detached servant's quarter.
3.3 Purchase Price and Payment Terms
Purchase Price: KES 20,000,000.
Deposit: KES 2,000,000 (paid on 1st January 2023).
Balance: KES 18,000,000 (due on closing date).
3.4 Adjustments and Prorations
Property Taxes: KES 50,000 (prorated to the closing date).
Utilities: KES 10,000 (prorated to the closing date).
3.5 Representations and Warranties
The seller represents that the property is free from any encumbrances and that all taxes and utilities are paid up to the closing date.
3.6 Closing Costs
Legal Fees: KES 100,000.
Stamp Duty: KES 400,000.
Registration Fees: KES 20,000.
3.7 Transfer of Ownership
The seller agrees to hand over the keys and all relevant documents upon receipt of the balance of the purchase price.
The buyer agrees to register the title deed in their name within 30 days of the closing date.
3.8 Signatures and Date
Buyer: ___________________________ Date: _______________
Seller: ___________________________ Date: _______________
Conclusion
A closing statement is an essential document in real estate transactions in Kenya, ensuring that all legal and financial obligations are met before the transfer of ownership. By adhering to the legal framework provided by the Constitution of Kenya, the Land Act, 2012, the Land Registration Act, 2012, and the LSK Conditions of Sale, both parties can ensure a smooth and legally compliant transaction. The sample closing statement provided above serves as a guide to the key components that should be included in such a document.
Answered by mwakili.com