Govt Moves to Tame Rogue Landlords

  • An image of Affordable Housing Project
    Apartments under the affordable housing project located at Park Road, Ngara in Nairobi.
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  • The government through the Ministry of Transport and Housing has moved to tame rogue real estate developers who have been in the spotlight for fleecing unsuspecting tenants and home buyers.

    Transport CS James Macharia, on Wednesday, May 26 told the Senate that they were finalising a raft of measures under an executive order. 

    A regulatory body, Real Estate Developers Regulatory Board (REDRB), will also be formed to oversee the sector which has been a breeding ground for scammers. 

    Among the roles to be played by REDRB will be; registering real estate developers, issuing licenses and regulating the landlords. 

    President Uhuru Kenyatta tours Nairobi Metropolitan housing projects in Nairobi's on Tuesday, June 30, 2020
    President Uhuru Kenyatta tours Nairobi Metropolitan housing projects in Nairobi's on Tuesday, June 30, 2020
    PSCU

    It will also conduct oversight of registered developers and housing projects as well as creating a robust dispute resolution mechanism between buyers and developers. 

    The Kenya real estate sector has experienced significant growth over the past years starting from 2004 through to 2016, with a marginal decline in 2017 due to political instability during the electioneering period as seen from the growth in its contribution to GDP.

    Growth can be attributed to a number of factors including the existing housing deficit which has remained at around 2 million as per the World Bank, increased urbanization with the country having an urbanization rate of 4.3 percent compared to the global average of 2.0 percent.

    Other reasons include supporting a demographic where many people being in their productive years fueling demand for properties as well as economic growth. The ease of doing business with Kenya being ranked #56 out of 190 by the World Bank as of 2020. 

    Basing on the data, real estate developers have rushed to build homes, especially in urban areas. Residents also purchase land and construct their own houses, Saccos and Chama members pull together resources for land buying and home construction, while others opt to take mortgages and purchases through off-plan offers.

    There is currently no legal framework that governs the relationship between the developers and buyers with regards to off-plan developments despite the model gaining popularity over the years. 

    However, the proposed Housing Bill of 2019 provides for the regulation of developers. The bill, nonetheless, has faced a number of legal setbacks thus being delayed for years. 

    That's the reason why the Transport CS pushed for the establishment abroad through an executive order to regulate the sector’s players as a short term measure.

    A number of developers have faced litigations with tenants and home buyers accusing them of fraud and embezzlement. This includes the Goldenscape Greenhouses project which cost homeowners Ksh18.6 million and the Gakuyo Real Estate plan. 

    Greenhouses belonging to Goldenscapes Limited.
    Greenhouses belonging to Goldenscapes Limited.
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    DCI Kenya