Businesses & Financial News

Government asked to squeeze land cartels ‘balls’

By Steve Umidha

The government should reform the country’s land Act to allow land sellers and property owners to compulsorily purchase land at existing use value and capture the increase in land value if the industry is to weed off rogue agents.

The land (amendment) bill, 2019 enacted through an Act of parliament provides for “revision, consolidation and rationalization of land laws to provide for sustainable administration and management of land and land based resources,” but experts believe it has done little to solve some of the ills in the sector owing to the existing gaps in the Act.

Players are now calling for sterner reforms and advanced regulations in the real estate sector following an upsurge in land grabbing cases and rogue land dealings in the last few months.

“The ministry of lands should set up a board in every 47 counties across the country so that all real estate companies should register with that board in the same way we see with other sectors like LSK, medical industry, we should have a body regulating the sale of lands and properties in this country,” said Joseph Njoroge, a director at Eden Park County Gardens, a local real estate firm.

While the government in 2013 formed National Land Commission (NLC) to act as the lead agency in land matters in collaboration with Ministry of Lands, Housing and Urban Development (MLHUD) and county-level institutions, Mr. Njoroge says cases of rogue dealers flooding the market have escalated exponentially particularly in land-related disputes.

Such a body, Njoroge says will also discourage land dealers taking part in gazumping, whereby higher offers are accepted after a deal has already been agreed and thus succeed in acquiring the property – which is a common practice in the real estate industry.

Gazumping occurs when a seller accepts a verbal offer on the property from one potential buyer, but then accepts a higher offer from someone else. A seller can also raise the asking price or ask for more money at the last minute, after previously verbally agreeing to a lower one.

“If you go to prison today you will find that almost a quarter of people in the prison have been sentenced because of land deals because we lack a sound regulatory framework by the government to solve such cases, DCI has been however helpful…Judicial system should also help in the restoration and redistribution of lands to those conned in the process,” he said.

Moses Nyakiongora, the Chairman of National Building Inspectorate while acknowledging the increasing challenge in the sector, believes more needs to be done to bring sanity in the sector.

“We are constantly working towards addressing these challenges with relevant agencies available, but we understand the magnitude of the problem at hand,” said Nyakiongora in a telephone interview.

The government is also mooting plans that will have apartment owners hold individual title deeds in a radical new plan through the Sectional Properties Bill of 2019, which is currently before Parliament and championed by Lands and Physical Planning, and seeks to address the legal loopholes that have exposed flat owners to unscrupulous property developers.

The Bill, which seeks to repeal the Sectional Properties Act of 1987, upon its sanction will give the owner of an apartment more power than what is currently vested in management companies – and could see such apartment owners have absolute right to the property.

As it is currently stipulated under the lands Act, apartment owners do not own the land underneath their units, and hold no title to show ownership of their houses. They, however, own a share of the management company, the parent land owner or lease holder.

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