Understanding Management Companies in Sectional Developments: Roles, Powers & Legal Limits

As apartment living and gated communities become more common in Kenya—particularly in Nairobi, Mombasa, and other urban centers—the demand for well-structured property management continues to grow.

The Sectional Properties Act, 2020 provides a legal framework for managing shared spaces in developments through Corporations (Bodies Corporate) and Management Companies. Yet, many property owners remain unclear about who holds the real authority, and what legal boundaries exist.

At WKA Advocates, we help landowners, unit owners, developers, and property managers navigate these roles with confidence. This article explains the legal distinctions, roles, powers, and limitations of management companies and how owners can protect their rights under Kenyan law.

Key Terms in Sectional Property Management

  • Sectional Title: A legal form of ownership where individuals own separate units (apartments, offices) and share ownership of common areas.

  • Corporation (Body Corporate): A legal entity created automatically once a sectional plan is registered. It consists of all unit owners and manages shared property.

  • Management Company: A private firm—typically contracted by a developer or the Corporation—to handle day-to-day operations such as cleaning, maintenance, and utility billing.

Corporation vs. Management Company: Who Does What?

1. The Corporation (Body Corporate)

Established by law under the Sectional Properties Act, a Corporation is:

  • Composed of all registered unit owners

  • Responsible for maintaining and managing the common property

  • Empowered to make binding decisions, enforce by-laws, raise levies, and take legal action

  • The primary decision-making and legal entity in any sectional development

2. The Management Company

A management company is not created by law, but appointed by the Corporation (or initially by the developer) to:

  • Maintain shared spaces such as hallways, elevators, gardens, and rooftops

  • Hire and supervise staff (security, cleaners, caretakers)

  • Collect service charges and utility payments

  • Liaise with government agencies and service providers

Important: The management company acts only under the authority of the Corporation or a written contract. It does not hold legal ownership or decision-making power unless authorized.

What Can a Management Company Legally Do?

When appointed through a valid contract, a management company may:

  • Collect service charges on behalf of the Corporation

  • Implement daily operations and enforce community rules (e.g., noise levels, garbage disposal)

  • Oversee building maintenance and repairs

  • Hire contractors and third-party service providers

  • Represent the Corporation in routine administrative matters

What a Management Company Cannot Do

Despite their operational role, management companies have no legal authority to:

  • Sell, lease, or mortgage common areas

  • Evict residents without a court order

  • Amend by-laws without a vote of the Corporation

  • Increase levies without legal approval from unit owners

  • Make decisions that bind owners unless expressly authorized

WKA Advocates regularly reviews management agreements to ensure companies stay within their legal limits and protect owners from overreach.

Common Legal Disputes Involving Management Companies

  1. Unlawful Service Charges
    Charging unapproved fees or failing to account for collected funds

  2. Financial Mismanagement or Lack of Transparency
    Refusing to disclose financial records to owners or the Corporation

  3. Misuse of Common Areas
    Turning shared spaces (parking, rooftops) into private income-generating facilities

  4. Overstepping Legal Authority
    Imposing fines, denying access, or threatening eviction without due process

  5. Developer-Controlled Contracts
    Contracts favoring developers and restricting the Corporation’s power to terminate the management company

WKA Advocates offers legal remedies and representation in such cases to protect property owners’ rights.

Developer-Appointed Management Companies: What You Must Know

Developers often install a management company before handing over control to owners. Problems may arise if:

  • The contract is biased in favor of the developer

  • There are no clear termination or handover clauses

  • The developer continues to control service charge accounts long after handover

Best Practice: Upon registration of the sectional plan, the Corporation should legally assume control and transition away from the developer-appointed company. WKA Advocates assists with contract reviews and peaceful, lawful transitions.

How WKA Advocates Can Help

Our legal services cover all aspects of sectional property management, including:

  • Registration of Corporations (Bodies Corporate) under the Sectional Properties Act

  • Drafting and reviewing management contracts and service agreements

  • Resolving disputes between owners, developers, and management companies

  • Overseeing legal handovers and developer exits

  • Advising on statutory compliance and best practices in property management

We ensure your apartment complex or gated community is run in a transparent, accountable, and legally compliant manner.

FAQs – Management Companies in Sectional Title Developments (Kenya)

1. Is a management company required under the Sectional Properties Act?
No. A Corporation is mandatory, but hiring a management company is optional.

2. Who appoints the management company?
The Corporation (unit owners collectively) can appoint or remove a management company through a formal vote.

3. Can a management company make legal decisions for the Corporation?
Only if expressly authorized in writing. Otherwise, it must refer major decisions back to the Corporation.

4. Can unit owners remove a management company?
Yes. Through a Corporation vote or based on the contract’s termination clause, owners can remove or replace the company.

5. What if a management company misuses funds?
They can face legal action for fraud, breach of contract, or misappropriation. WKA Advocates handles such litigation.

6. What is the difference between a management company and a Corporation?
The Corporation is a legal entity made up of all unit owners. A management company is a service provider, hired under contract.

7. Can a management company restrict access to my unit?
No. Only lawful authorities (like the police or a court order) can restrict access. Any such action by a management company is illegal.

Understanding Management Companies in Sectional Developments

Management companies are important for day-to-day operations in Kenya’s apartment and gated communities, but their authority is limited and must come from the Corporation. Owners, developers, and property managers must ensure that their contracts are clear, fair, and legally sound.

At WKA Advocates, we protect your investment by ensuring your property is well-managed, your rights are respected, and your management structure is legally compliant.

Need Legal Help with Your Management Company or Corporation?

Contact WKA Advocates today for legal advice, contract review, dispute resolution, and compliance services tailored to Kenya’s real estate laws.