Compensation for Compulsory Acquisition in Kenya: How Awards Are Determined

Compensation in compulsory acquisition is not simply a negotiation over an owner’s preferred price. It is a statutory assessment of the interests affected by the acquisition and the evidence supporting their value. The starting point is Article 40 of the Constitution, which requires prompt payment in full of just compensation, and Part VIII of the Land Act, 2012.

A sound claim separates three questions: what interest does the claimant hold, what land or improvement is actually being acquired, and what statutory factors support the amount claimed? That discipline matters where the acquisition is only partial, the land is charged or leased, more than one person has an interest, or the claimant relies on structures, crops, business use or occupation evidence. The acquisition process determines the public project; the compensation inquiry must still determine each affected interest.

Start with the interest, the parcel and the valuation date

The Commission’s award is made to people whose interests it has determined, not only to the person who first produces a title certificate. A current official search, title or lease, charge, co-ownership record, succession documents and evidence of occupation may therefore all be relevant. A lender, tenant, co-owner, proprietor, person with a registered easement and a qualifying occupier can have different interests in the same land. Each should be identified accurately rather than folded into one unsupported figure.

The physical scope matters just as much. Compare the Gazette notice, survey material and project plan with the title and the ground. Is the whole parcel affected, or only a defined strip or portion? Are buildings, crops, access, utilities, machinery or other improvements inside that area? The Commission’s final survey and the actual boundaries are important because the award, the remaining land and the later registry work must correspond with what is taken.

For freehold and community land, section 107A says that valuation for compensation is based on the statutory framework and the land-value index developed for that purpose. It also identifies the value date as the date the notice of intention is published in the Gazette. A valuation report should therefore state the interest valued, the relevant date, assumptions, comparable evidence, condition of the land and the evidence used for each improvement. A current market opinion that does not engage with those questions may be less useful at an inquiry.

Know which changes in value the Act excludes

The Act does not treat every apparent rise in value as compensable. Under section 107A, an increase may be disregarded where it is caused by the intended use or development for which the land is being acquired, or by value expected to accrue from that future use. This prevents a proposed road, utility or public project from inflating the compensation baseline merely because it is proposed.

The section also addresses improvements made within two years before publication of the notice or after its publication. Such additions may be disregarded if they were made in contemplation of acquisition, unless the earlier work is proved to have been made bona fide; later work may be disregarded unless necessary to keep a building in proper repair and not a capital improvement. Improvements contrary to law or detrimental to occupiers’ or public health are also excluded. The practical lesson is to preserve approvals, contracts, invoices, photographs, receipts and evidence of when and why work was done.

Urgency, personal inconvenience and anticipated damage after publication or from the intended use are likewise not automatically factors in the land value. That does not mean an affected person has no case beyond bare land value. It means the claim should be framed through the specific heads the Act recognises, with evidence that fits each one, rather than through a broad assertion that the project is disruptive.

Document the effects that a partial acquisition can cause

Section 107A permits consideration of damage caused by severing the acquired land from the owner’s other land, and damage injuriously affecting other property or actual earnings. It also permits reasonable expenses where a person is compelled to change residence or place of business, diminution of profits between publication and possession, and the effect of an express or implied title condition or law restricting the intended use. These are fact-specific items, not automatic percentages added to every award.

A partial acquisition is a common example. If the proposed portion changes access, site layout, drainage, building operations, farming or a lawful business, describe the consequence with a plan, photographs, operational information and appropriate expert evidence. If diminished profits are claimed, the Act requires proof of the profits, including tax returns. A valuer’s opinion is important, but it is stronger when the underlying records show how the land was used and why the claimed impact follows from the acquisition.

Leasehold land calls for a different analysis. Section 107B directs attention to the unexpired lease term, value assessed on the statutory basis, lawful developments and improvements, and other prescribed criteria where the lessee has complied with the grant. A claimant should therefore produce the lease and any consents, evidence of compliance, rent material and proof of lawful improvements. A valuation that assumes perpetual ownership when the interest is a time-limited lease may not answer the statutory question.

Use the inquiry and award to test the evidence

The compensation inquiry is where an interested person should put the claim and supporting material before the Commission. The inquiry notice calls for written claims by the inquiry date, and the Commission may hear evidence, summon witnesses and require title documents. This is the right time to identify missing interest holders, correct the parcel or area, explain a partial-taking impact and place a reasoned valuation on the record. Waiting until after an award can make a dispute harder to explain and resolve.

After the inquiry, section 113 requires a separate written award for every person whose interest the Commission has determined. It is final and conclusive evidence of the size of the land, the value in the Commission’s opinion and the form of compensation, subject to the Act’s review provisions. Section 114 requires each person found to be interested to receive an award notice and offer of compensation. Read the award against the evidence submitted: the interest, area, improvements, amount, form of compensation and allocation among co-holders should all be intelligible.

The Act permits compensation through, among other things, replacement land, money, a government bond, development rights, equity in a state-owned entity or another lawful means. The owner’s election operates within that statutory framework. A claimant should not sign an acceptance, banking instruction or other award form without understanding what it records and whether it affects a live challenge. If entitlement or shares are disputed, or a person does not consent to receive the amount, the Act provides a separate payment mechanism rather than treating the issue as though the interest has disappeared.

Keep payment and review records separate from the valuation file

Payment requires due diligence, including final survey and the determination of acreage, boundaries, ownership and value. Where compensation has not been paid, section 117 requires the Commission to open a special account and pay interest at the Central Bank’s prevailing base lending rate from possession until payment; additional compensation carries the statutory interest described in that section. Keep the award, payment instruction, bank evidence, correspondence and any special-account notice together, but do not confuse a payment dispute with the evidence supporting the original valuation.

A person who disputes a Commission decision on the process or award should act from the complete record, not from an informal estimate. Part VIIIA establishes the Land Acquisition Tribunal as the first forum for compulsory-acquisition matters. Under section 133C, an application by a dissatisfied person is ordinarily made within thirty days of the decision, although the Tribunal may extend time for sufficient cause. The Tribunal may confirm, vary or quash the decision; a later court appeal is on the legal and procedural grounds set out in section 133D.

The useful working file is therefore specific: the notice, official search, title or lease, survey material, occupation and improvement evidence, valuation report and comparables, inquiry submissions, award, payment documents and proof of relevant dates. It gives the Commission and, if necessary, the Tribunal a way to test a claim head by head. It also prevents the discussion of just compensation from being reduced to a single unexplained figure.

Primary sources: Constitution of Kenya, Article 40; Land Act, 2012, sections 107A–107B, 111–119 and 133A–133D.