What you need to know:
- Regulation has done little to rein in shady firms that have left property buyers with huge losses and debts.
“Getting your desired piece of land is not a walk in the park — you have to go through some legal processes to ensure the land you acquire is legitimate. Nowadays, land selling offices are all over and one wonders where all this land that is being sold on a daily basis is.
“Advertisements run throughout on radio, television and newspapers. People believe the media too much and end up being conned. Media outlets should stop such adverts,” Ms Moreen Nkonge, a resident of Kiambu, said in the Daily Nation on June 3, 2018. She also called for regulating of land advertising and control of brokerage firms, some of which have caused many Kenyans untold suffering in fake land deals advertised in the media.
Many players in the sector share Ms Nkonge’s concerns.
Today, the media are awash with advertisements running back-to-back, marketing land deals mostly in Nairobi, Kiambu, Machakos, Nakuru, Kajiado, Nyandarua, Laikipia and Malindi.
The companies, including some which have turned out to be rogue, have been competing for airtime during prime time, where directors cough millions to secure advertising slots to reach out to potential buyers as they seek to cash in on the high demand for property ownership.
Some firms even hire celebrities and media personalities as their ambassadors to create confidence, but leave their clients in tears after failing to meet their obligations despite receiving hard earned cash.
For instance, Gakuyo Real Estate, a land buying company owned by the controversial preacher David Kariuki, is under investigations by the Directorate of Criminal Investigations after clients accused the preacher of dubious land deals.
Mr Kariuki, also known as Gakuyo, is accused of luring the public to his alleged con trap with creative advertisements on popular Kikuyu radio stations.
The clients accused the controversial bishop, who is also the chairman of the troubled Ekeza Sacco, of embezzling their money.
A report by the Commissioner of Co-operatives indicated how the preacher spent millions to market Gakuyo and Ekeza activities.
The drive also saw Mr Kariuki combine Gakuyo and Ekeza’s marketing activities with the Kiambu gubernatorial campaigns ahead of the 2017 General Election.
He spent Sh6 million in 2015, Sh50 million in 2016 and Sh78 million in 2017 on vernacular radio and TV stations marketing campaigns that the media aired live.
The preacher, through Gakuyo Real Estate and Ekeza Sacco, marketed land and affordable housing, convincing members to register with Sh20,000 to be eligible for three-bedroom houses in Joska at Sh3.5 million each and Sh10,000 for two-bedroom houses at Sh1.5 million each.
He failed to hand over the houses to members by March 2017 as he had promised.
Instead, the management began taking members in circles, giving new pledges that the housing projects would be relocated to Nakuru and other places because the Joska development was no longer viable.
Most of the investors are yet to get title deeds for the land they bought.
The huge marketing budget, where the preacher personally appeared for paid-up shows in the media, easily saw unsuspecting investors, mostly from central Kenya, fall for the scam. It is proof of how far land dealers are willing to go to lure people into their con games.
According to past records, land companies, which began in the 1960s, were meant to Africanise the White Highlands.
Peasants formed companies to enable them to jointly buy land through contributions, but today they have become the fulcrum on which fraud rotates.
Most of the tricks used include sale of affordable houses off-plan, where clients make payments even before the construction begins.
Designs of posh houses are advertised but never delivered or sale of land where people are lured through irresistible deals in which the land is still under the vendor’s name only for the buyers to end up without title deeds.
Currently, investors in Urithi Housing Co-operative Society and Suraya Property Group are in a panic after the two entities failed to meet their obligations despite collecting millions from clients.
Urithi’s Panorama Gardens in Gatanga, near Blue Post Hotel in Thika, which had attracted 400 investors who paid Sh2.25 million per plot, is up for sale, while developers in another property in Thika have been kicked out by the previous owner who says Urithi failed to pay him the balance.
For Suraya, dozens of investors recorded statements with the DCI claiming that the developer failed to deliver the houses they bought at Fourways Junction phase II, Lynx Apartments on Muchai Drive, and Loneview Apartments on Mombasa Road in Nairobi.
Today, thousands of cases are in court while others are being investigated in which land and housing companies have been accused of swindling clients.
In some cases, land buying company wrangles turn bloody. For example, MBO-I Kamiti in Kiambu and Kihiu Mwiri in Murang’a, which have been dogged with leadership troubles leading to deaths of officials as they fight for control of resources.
In cases like Embakasi Ranching in Nairobi and South Ngariama in Kirinyaga, members have been waiting for decades to get ownership documents.
Concerned by the trend, Interior Cabinet Secretary Fred Matiang’i, then acting Land minister in 2015, announced in a newspaper advertisement that the government plans to tackle irregular and illegal land transactions.
He directed an inventory on the status of surveying, planning and registration of land for all land buying companies and co-operatives with a view to, among other things, seek ways to address illegal and irregular land transactions.
But the move that players in the sector welcomed did not bear fruit as rogue real estate companies continue to fleece unsuspecting Kenyans of their hard-earned cash.
For instance, in Kiambu alone, according to Land Executive James Maina, there are more than 500 land buying companies, most of which are a permanent feature on radio and TV stations selling land and housing projects.
The Estates Agent Act (Cap 533), which also establishes a board charged with the responsibility of registering estate agents and regulating their activities to protect the public, seems to have done little to tame fraud in the sector.
Industry players, who are concerned that fraudsters have invaded the multibillion sector to take advantage of Kenyans’ quest to own land, want the policies and regulations to be put in place to protect buyers.
They want tougher laws enacted, including the sponsoring of related Bills in Parliament and creation of regulators to control the sector to enhance policing of land-buying companies.
Mr Joseph Njoroge, director of Eden Park and Country Gardens, with interests in Nanyuki and Kajiado, said MPs should enact laws to protect Kenyans from fraudsters.
He proposes that land dealers and real estate firms should first seek clearance from the regulators who should vet them before going public, including advertising.
“There should also be a recognised body for land buying-firms, just like we have professional bodies for other players in the county or national level to enable self-regulation. Today, only the police can question a fraudster in the sector and that happens when fraud has already occurred,” Mr Njoroge told Sunday Nation.
The media, he said, also need to play a role by ensuring that before they run advertisements from land buying firms they consider doing due diligence by confirming the status of the company and land as well as placing prominent disclaimers.
Mr Njoroge advises buyers to first do due diligence before entering into any land deal to establish their reputation and also ensure, before making any payment, they are taken to the land being sold to determine the ground status to avoid buying “air”.
Former Gatanga MP Humphrey Njuguna, who has also been in the property sector, agrees that legislation should be put in place to regulate the sector and curb lawlessness.
He says most companies have been taking advantages of Kenyans’ ignorance on land transactions.
“Do we have adequate legislation in the property sector and if we have, what is the problem? If we don’t have, what is the way forward?
“A serious policy is needed. Due to the money involved, con men have invaded the sector in which one just gets an operating licence from county governments and starts advertising land, which doesn’t even belong to them or even exists,” Mr Njuguna said.
The former lawmaker urged the government to crack down on land-related crimes just like it does with corruption and money laundering and ensure that real estate dealers are genuine.
He said all real estate dealers, including land brokers and land agents, should be registered and licensed.
Mr Njuguna added that most real estate dealers are briefcase companies and account for half of the land fraud in the country.
Perhaps after being moved by the increasing fraud cases involving land companies through dubious transactions, Land Secretary Faridah Karoney announced in Ruiru last month, during the opening of a registry, that the government would profile all firms in the sector and list title deeds of all the land they have transacted.
She said it was impossible that a property company could be subdividing and selling the same parcel of land for years. She added that the profile of all land firms would help to flush out con men in the sector.