Proptech, or property technology, refers to the use of technology to improve the real estate value chain. This includes everything from using online platforms to list and sell properties to using data analytics to assess market trends. Proptech companies are changing the traditional real estate industry in several ways.
A perfect example is @Kiotapay, which is an end-to-end real estate platform for automating billing, collections, payments, expense management, sales and other real estate records. They are making it easier and faster for people to buy, sell, and rent properties. They are also providing new insights into the market, which can help investors make better decisions. As the Proptech industry continues to grow, companies need to be aware of the legal and regulatory challenges that they face.
In terms of Kenya’s legal development in the context of Proptech, the Business Laws (Amendment) Act 2020 (the “Act”) stands out as a game-changer. In this article, we will explore the key considerations for Proptech companies in Kenya, exploring the supportive legal environment and the imperative of compliance. Designed with a keen focus on digitization and efficient record-keeping, this Act aligns perfectly with the operations and aspirations of Proptech companies. One notable provision is the introduction of electronic filing of property documents, providing Proptech firms with significant time and cost savings. Moreover, the Act recognizes the validity of electronic signatures, enabling Proptech companies to conduct transactions with customers seamlessly and expeditiously.
What are the key considerations for Proptech companies in Kenya?
- Data Protection and Intellectual Property
Proptech companies collect and use large amounts of data about real estate stakeholders, including personal information, financial data, and property records. It is crucial to protect this data from unauthorised access, use, or disclosure. The Data Protection Act 2019 in Kenya regulates the collection, processing, and use of personal data, requiring companies to obtain individuals’ consent and ensure the privacy and security of this information. Proptech companies should also consider protecting their intellectual property rights under the Intellectual Property Act 2001, safeguarding patents, trademarks, and copyrights.
- Service and Performance IssuesProptech companies providing services in Kenya must ensure that their services meet the required standards of quality and performance. This may involve offering warranties, or guarantees, or taking steps to mitigate the risk of service failures. For example, a Proptech company offering a platform for property rentals must prioritise security and user-friendliness. Insurance coverage may also be necessary to address any damages or losses resulting from platform usage.
- Liability for Systemic IssuesProptech companies can be held liable for damages or losses resulting from systemic failures within their systems or technologies. Robust cybersecurity measures, such as security systems and regular updates, should be prioritised to mitigate the risk of cyberattacks. Comprehensive insurance coverage is also essential to address any potential user losses or damages.
- Avoiding Technological Lock-inProptech companies need to avoid becoming dependent on outdated or inflexible systems. Adopting open standards, regularly reviewing and updating systems and technologies, and ensuring compatibility with other systems and technologies are essential. This flexibility will facilitate future upgrades or replacements of the platform, keeping the company agile in the face of technological advancements.
- New Contractual FormsThe adoption of Proptech technologies is likely to lead to the development of new forms of contracts. Proptech companies may need to create contracts that reflect the specific features of their platforms. Careful drafting of these new contract forms is crucial to ensure fairness and enforceability. Consulting with a lawyer during the drafting process is strongly advised to navigate the complexities of the legal landscape.
In conclusion, by being aware of the legal and regulatory challenges, Proptech companies can operate in a safe and compliant manner. This fosters trust with users and partners and contributes to long-term success. If you are a Proptech company in Kenya, staying up-to-date on the latest regulatory and legal developments is crucial. Consult with a lawyer to ensure compliance with all applicable laws and regulations. Remember, compliance is key, and legal support is just a consultation away. Stay informed, stay compliant, and stay ahead in the world of Proptech.