County Rates Auctions in Kenya: What the National Rating Act 2024 Means for Property Owners

Unpaid land rates are one of the fastest routes to losing a property in Kenya. County governments, Nairobi City County chief among them, have stepped up enforcement against rates defaulters, and a wave of public auction notices in recent years has caught many landowners and commercial property holders by surprise. The rules governing this process changed significantly with the National Rating Act, 2024, which repealed the decades-old Rating Act (Cap 266) and the Valuation for Rating Act and introduced a single, modernised national framework for property rates, valuation rolls, and enforcement. For any property owner, investor, or developer in Kenya, understanding how a county can move from a rates demand to a public auction, and what options exist to stop that process, is essential to protecting a valuable asset.

County Government Powers to Recover Unpaid Rates

Under Kenya’s devolved system, county governments have the mandate to levy property rates on land and buildings within their jurisdiction, and to enforce payment. The National Rating Act, 2024 consolidates and clarifies these enforcement powers. Where a rateable person defaults, section 19(2) allows the county to impose a penalty at the prevailing Central Bank of Kenya rate, deny the defaulter certain county services, institute a civil suit for recovery, or create a legal charge against the rateable property. Where these measures fail, section 19(3) goes further, empowering the county to appoint a receiver to collect rent directly from tenants, or to auction the property at its current market value in accordance with the prescribed procedures. An auction is therefore not the county’s only tool, but it is the most severe one, and the one owners most need to guard against, comparable in effect to a lender exercising a statutory power of sale over a mortgaged property.

These powers attach to the property itself as a rateable unit, not merely to the person who owes the debt. A change of ownership does not automatically extinguish arrears on a parcel, which is why rates clearance is central to due diligence in any property transaction.

The Legal Process: Demand, Notice, and Auction

The Act sets out a structured sequence a county must follow before it can lawfully move against a defaulting owner. Counties must publish notices, including in the Kenya Gazette, setting the due dates for payment of rates, and section 15(3) requires this at least sixty days before the due date takes effect, giving ratepayers advance warning of a rating year’s obligations.

Once a rate becomes due and remains unpaid, section 19(1) requires the county to issue a written demand to the defaulting ratepayer, giving sixty days from service of the demand to settle the outstanding amount. Only after this sixty day window lapses without payment do the county’s enforcement options under sections 19(2) and 19(3), including penalties, a charge on the property, appointment of a receiver, or ultimately auction, become available. An auction is typically preceded by public advertisement of the sale, since the Act requires the property to be sold at current market value through the prescribed procedures, in practice involving licensed auctioneers and a fresh valuation.

Separately, the Act governs the valuation roll underpinning every rates bill. Section 35(3) requires a draft valuation roll to be open for public inspection for not less than forty five days from publication, and section 36 allows a rateable person to lodge a formal objection to their valuation within forty five days of publication, accompanied by a non-refundable objection fee of not less than ten thousand shillings. Because a rates bill flows directly from the assigned valuation, an unchallenged, inflated valuation can itself be the root cause of an unaffordable demand later on.

What the National Rating Act, 2024 Changes

The National Rating Act, 2024 was assented to on 4 December 2024 and commenced on 24 December 2024. Section 57 repeals both the Rating Act (Cap 266) and the Valuation for Rating Act in their entirety, replacing them with a single statute applying uniformly across all forty seven counties, subject to each county’s own rating legislation on matters such as instalment schemes and waiver criteria.

Among the most significant changes for property owners are the creation of the National Rating Tribunal under section 39, with jurisdiction under section 41 to hear and determine objections and disputes brought by rateable persons or county executive committees, and a clear appeal pathway from the Tribunal to the Environment and Land Court under section 55. This gives ratepayers a dedicated, specialised forum for contesting valuations and rating decisions. The Act also caps the interest chargeable on unpaid rates: section 16(3) provides that simple interest on arrears shall not exceed the prevailing Central Bank of Kenya rate, curbing punitive, uncapped penalty interest.

The Act also formalises flexibility for ratepayers who are struggling to pay. Section 16(2) allows the responsible county executive committee member to prescribe payment of rates by instalments rather than a single lump sum, while section 17(1) allows an application for remission before the due date, or within fourteen days after it. Section 18(1) requires each county to prescribe, through its own legislation, criteria for waivers and discounts on interest and penalties, so the generosity of waivers will vary between counties.

How Property Owners Can Challenge or Forestall an Auction

A property owner who receives a rates demand, or learns their property has been listed for auction, is not without options, but time is the critical factor; the remedies below work best when used early, before an auction date is fixed and advertised.

The first line of defence is engagement rather than avoidance. A ratepayer who cannot pay in full should approach the county revenue department to negotiate an instalment arrangement under section 16(2), or apply for remission under section 17(1) within the statutory window. Where the real grievance is that the property has been overvalued, the correct remedy is to lodge a formal objection to the valuation roll under section 36 within forty five days, rather than simply ignoring the demand that follows from it.

Where a dispute has already crystallised, whether over valuation, the amount claimed, or the county’s compliance with its own procedures, the National Rating Tribunal under section 41 is generally the appropriate first forum, with a further right of appeal to the Environment and Land Court under section 55. Owners should also check whether the county actually complied with the Act’s own safeguards, such as proper service of the section 19(1) demand and the sixty day payment window, before any auction proceeds; a failure to follow the prescribed statutory process can support an application for judicial review or an urgent injunction restraining a threatened sale.

Finally, because arrears attach to the property, buyers, lenders taking security over land, and owners refinancing should always insist on an up to date rates clearance certificate and a search of the county’s rates and valuation records before a transaction proceeds, to avoid inheriting a dispute that predates the current owner. This sits alongside other pre-completion checks, such as confirming stamp duty has been correctly assessed and paid on the transaction.