Guarantee (House Purchase) Act

LAWS OF KENYA
THE GUARANTEE (HOUSE PURCHASE) ACT
NO. 27 OF 1967
Revised and published by the National Council for Law Reporting
with the authority of the Attorney-General as gazetted by the Government Printer
www.kenyalaw.org

Kenya
Guarantee (House Purchase) Act
Act No. 27 of 1967
Legislation as at 30 November 1967
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• SA: Adaptations must be shared under the same terms.
Share widely and freely.

Guarantee (House Purchase) Act (Act No. 27 of 1967)
Contents
1. Short Title .......................................................................................................................................................................................................... 1
2. Interpretation .................................................................................................................................................................................................... 1
3. Local authority may submit scheme to guarantee excess advances ............................................................................................ 1
4. Minister may approve scheme ................................................................................................................................................................... 1
5. Power to guarantee ........................................................................................................................................................................................ 2
6.

................................................................................................................................................. 2
6.

Liability under guarantee ............................................................................................................................................................................. 2

.................................................................................................................................................... 2

Guarantee (House Purchase) Act (Act No. 27 of 1967) Kenya
GUARANTEE (HOUSE PURCHASE) ACT
NO. 27 OF 1967
Assented to on 26 November 1967
Commenced on 30 November 1967
[Amended by Kenya (Amendment of Laws) (Written Laws)
Order, 1963 (Legal Notice 2 of 1964) on 12 December 1963]
1. Short Title
This Act may be cited as the Guarantee (House Purchase) Act 1967. 2.

en Laws)
Order, 1963 (Legal Notice 2 of 1964) on 12 December 1963]
1. Short Title
This Act may be cited as the Guarantee (House Purchase) Act 1967. 2.

Interpretation
In this Act, except where the context otherwise requires—
"advance" means an advance made or to be made by a building society to a person for the purpose of
purchasing a house;
"building society" means a building society within the meaning of the Building Societies Act and any
other body Which the Minigter may, with the agreement of the Treasury, by notice in the Gazette, declare
to be a building society for the purposes of this Act;
"excess advance" means that part of an advance which exceeds 65 per cent but does not exceed 90 per
cent of the value of the property in respect of which the advance is made, together with the interest
payable on that part of the advance;
"local authority" means the Nairobi City Council or any other local authority which the Minister may,
with the agreement of the Minister for the time being responsible for local government, by notice in the
Gazette, declare to be a local authority for the purposes of this Act;
"purchase" in relation to a house, means the purchase of the house and the land appurtenant to it, or the
purchase of land and the erection of the house on it, or the erection of the house on land;
"value" in relation to property, means the sum at which the property is valued in a valuation made or
approved by a valuer employed or authorized for the purpose by the Government, or the cost of the
purchase (including the land) if that is less.

de or
approved by a valuer employed or authorized for the purpose by the Government, or the cost of the
purchase (including the land) if that is less.

3. Local authority may submit scheme to guarantee excess advances
A local authority may prepare and submit to the Minister for his approval a scheme for the local authority
and the Government jointly to guarantee the repayment of excess advances made or to be made by a
building society to citizens of Kenya for the purpose of enabling them to purchase houses within its area of
jurisdiction. 4. Minister may approve scheme
Where a scheme is submitted to the Minister, under section 3 of this Act, and he is satisfied—
(a) that a guarantee will extend only to two-thirds of the excess advance and two-thirds of any
expenses incurred in protecting, preserving or realising the security; and
(b) that a guarantee may be given only in a case where the advance does not exceed five thousand four
hundred pounds, he may, with the agreement of the Treasury and of the Minister for the time being
responsible for local government. 1

ve thousand four
hundred pounds, he may, with the agreement of the Treasury and of the Minister for the time being
responsible for local government. 1

Guarantee (House Purchase) Act (Act No. 27 of 1967) Kenya
5. Power to guarantee
Where the Minister has approved a scheme under section 4 of this Act, the local authority and the
Government may enter into guarantees in accordance with the scheme, in such form as the Minister may
think fit.
6. Liability under guarantee
Where a local authority and the Government have entered into a guarantee under section 5 of this Act—
(a) the Government's liability under the guarantee shall be one-half of the amount the repayment of
which is jointly guaranteed by the local authority and the Government, and the local authority's
liability shall be one-half of the same amount;
(b) the Government's liability under the guarantee shall cease altogether when the principal sum owing
in respect of the property has been reduced to an amount equivalent to one-half of the value of the
property as assessed at the time the advance was made.
2