Sold Twice, Lost Once: Mombasa's Off-Plan Horror Stories That Reached the High Court

The Off-Plan Promise

The off-plan apartment market in Mombasa and the wider Coastal strip has grown substantially over the past decade, driven by diaspora buyers, Nairobi investors seeking beach-adjacent returns, and local middle-class buyers priced out of completed developments. Developers have responded with aggressive pre-sales: pay 30% now, get your unit when the building is done.

Quick answer: Off-plan purchases in Mombasa require verification of the base land parcel before any deposit. If the land under the development has an encumbrance, mortgage, or government acquisition notice, your unit may never be delivered — even if the developer appears legitimate. Verify the base parcel first.

The structure is not inherently fraudulent. In many cases, buyers receive their units and the transaction concludes normally. But the off-plan model has a structural vulnerability that the High Court in Mombasa has been asked to address with regularity: the buyer's protection depends entirely on the developer's honesty and financial stability, neither of which is independently verified.

When both fail, buyers who paid deposits and instalments discover that the unit they were sold may not exist, may have been sold to someone else, or may sit on land that cannot be developed because the developer never owned it cleanly.

The Double-Sale Pattern

The documented pattern in Mombasa is straightforward. A developer sells Unit 5B in a planned block to Buyer A under a Sale Agreement, taking a 30% deposit. Some months later, facing cash flow difficulties, the same developer sells Unit 5B to Buyer B under a separate Sale Agreement, taking another deposit.

The developer uses Buyer B's money to fund construction that was supposed to have been funded by Buyer A's deposit, which has already been spent. The project may or may not complete. If it completes, only one buyer can occupy Unit 5B. The other discovers the double-sale — sometimes only when they arrive with their keys.

The High Court in Mombasa has seen this pattern sufficiently often to have developed a consistent framework: the earlier sale agreement typically prevails, and the developer faces personal liability to the second buyer for the refund of deposits plus damages. But "personal liability" against a developer who has exhausted their funds and potentially dissolved their company is often an empty judgment.

Kenya's Building Approvals and the Whole Building Registration System under the Land Registration Act 2012 require that individual units in a sectional development be registered with distinct title numbers once the building is complete and certified. Until that registration happens, an off-plan buyer holds a contractual right — not a registered interest. Contractual rights do not appear in the land register. The land register will show only the developer's title to the base parcel, plus any charges.

The Encumbered Land Problem

The second category of off-plan failure is more fundamental and, in some ways, more damaging: the developer builds on land that was charged to a bank before the development began.

Under the Land Act 2012, a chargee (typically a bank) holds a security interest over charged land. If the developer defaults on their development finance facility, the bank has the right to appoint a receiver, take possession, and sell the charged property — including the building standing on it.

Buyers who purchased off-plan units have a contractual claim against the developer. They do not have a registered interest in the land or the building that is superior to the bank's charge. When the bank moves to enforce, buyers frequently lose their units regardless of their contracts.

KCAB — the Kenya Centre for International Arbitration — handles a significant volume of developer-buyer disputes arising from exactly this situation, particularly in coastal counties where informal development financing arrangements are common.

What the Base Parcel Check Reveals

The solution is not sophisticated. Before any deposit is paid on an off-plan purchase, the buyer should run a verification check on the base land parcel — the parcel on which the development sits, before any sectional titles are issued.

That check should answer: Who is the registered owner? Are there any charges registered against the parcel? Are there any cautions, caveats, or court orders affecting the parcel? Is the title consistent with a development of the described scale?

A developer presenting a beautiful showroom, a compelling brochure, and a reasonable price is not a substitute for a clean parcel check. The showroom does not tell you whether the bank already has a charge over the land. The brochure does not tell you whether the parcel is subject to an injunction.

The base parcel may look clean on paper — but a Litmus test on the title-holder's charge register tells a different story. A parcel with two bank charges already registered before the development has broken ground is not a safe base for a deposit.

Protecting Yourself Before You Pay

Practical steps for an off-plan buyer in Mombasa or Malindi:

• Obtain the Land Reference number (LR number) of the base parcel from the developer before any payment.
• Run an independent verification check on that parcel.
• Confirm that the developer is the registered owner or has a registered interest sufficient to develop.
• Check the charge register for all encumbrances.
• Use an independent advocate — not the developer's advocate — to review the Sale Agreement.
• Confirm that the Sale Agreement is registered or at minimum notarised, creating a traceable record.

These steps cost a fraction of your deposit. They are not a guarantee against all risk, but they eliminate the most common failure mode: paying into a project built on land that someone else controls.

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