A landlord is set to lose multi-million property located in Kajiado after he failed to pay Ksh143 million loan owed to a lender.
The property is set to go under the hammer after the court gave the lender the go ahead to auction the property and recover the money.
A report by Daily Nation, on Sunday, April 25, indicated that the mortgage lender was allowed to sell 16 mansions owned by George Gichohi Chege.
Chege had reportedly filed a suit seeking the court to halt the lender's plans to auction the houses located in Kajiado over Ksh143 million loan.
In his suit, the landlord argued that the two parties had agreed that the interest would only accrue after all his money had been disbursed.
Chege disclosed that his loan of Ksh95 million had been approved but only Ksh79 million was disbursed to him.
He had asked the court to compel the mortgage provider to extend his loans repayment period as well as direct for joint marketing between him and the lender.
In his ruling, High Court Judge Alfred Mabeya, however, dismissed Chege's application noting that the Ksh8 million balance that was yet to be disbursed by the lender was held to recover its outlay.
The judge further noted that the borrower had offered the property as security to secure the loan.
Mabeya explained that Chege had reneged on the deal and directed the lender to auction the properties in benefit of its depositors.
Since Covid-19 pandemic hit the country in March 2020, the real estate industry has been left in disarray with a parade of auctions ruling the sector.
The Central Bank of Kenya (CBK) on Wednesday, March 31, released data on credit defaults which shows that thousands of home owners defaulted on mortgage loan repayments, and therefore risk losing their homes among other properties.
The data by CBK showed that 14.5 per cent of all loans taken have been defaulted.
The new figure represents a sharp increase of all defaulted loans which stood at Ksh349.94 billion at the end of February 2020, but hit Ksh432.45 billion in the same period in 2021.
As a result of the default, the lenders watchdog noted that banks were aggressively looking into auctioning properties of their borrowers to recover the loans.
The lenders had been prevented from auctioning properties in 2020 due to the effects of Covid-19 pandemic that led to collapse of businesses and job cuts.
In the Daily Nation newspaper, Monday, March 29, edition, property auction notices filled nine pages signaling tough times ahead.
The properties listed included mansions, high-rise apartments, motor vehicles and household items in Nairobi and across other parts of the country.
Ever since, auction notices have continued filling a good percentage of newspaper ad sections.
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