MP seeks to regulate land-buying firms

Land buying companies will be required to deposit Sh500 million with a government body before they are issued with a licence if MPs pass a new bill to rein in land sharks.

Kirinyaga Central MP Joseph Gitari has written to Speaker of the National Assembly Moses Wetang’ula seeking to introduce a bill to regulate land buying companies.

The government has also signaled intention to regulate the industry which has been accused of swindling unsuspecting buyers of billions of shillings.

The Finance Committee of the National Assembly is in the process of drafting a bill seeking to control the industry. “We need to bring sanity in the land buying sector, as people’s representatives we cannot sit and watch as our people continue to be conned off their hard-earned money. My committee is in the process of drafting a piece of legislation which will be coming soon,” said committee chairman Kimani Kuria.

A number of such companies have gone under with investors deposits holding worthless land agreements and title deeds.

In the proposed bill, Gitari says that the principal objective is to regulate the legislation and licensing of the “land buying” companies and protect the interest of persons who purchase land from the said entities.

The bill the MP says in the notice to the Speaker contains provisions to a regulator to impose penalties of up to Sh5 million for non-compliance.

Further the proposed legislation seeks to have the companies to register with a regulator just like commercial banks. “Such companies should deposit Sh 500 million as licence fee,” Gitari writes.

Gitari said he has been motivated to draft the bill to “rescue” thousands of unsuspecting Kenyans who have fallen prey to the unscrupulous people trading as realtors. “We need to tame these people since the current law has not been stringent enough to tame them, by regulating them and having them deposit a fee will help in controlling them,” Gitari said.

Kuria further says that the said companies have been operating in clear violation of the law by asking their clients to pay for deposits. “Such deposits are illegal since they are not taxed, we want to amend the law to introduce a tax for such deposits,” said Kuria who is also the MP for Molo.

A majority of investors have been left holding valueless land documents as crooked company directors’ sale agreements as greedy land firms mint millions of shillings, leaving them grappling with loans.

Deceitful sellers

The deceitful land sellers use any means to cheat their victims like using the so-called online influencers or popular presenters on vernacular radio and TV stations.

They also rope in preachers to use the word God to entice people to invest with them and move which has become very popular among Kenyans.

They also offer free transport, drinks and meals to investors being ferried to the location of the land parcels most of which is situated in remote localities.

In other situations, a company identifies a prime and vast land that is managed by a second or a third-generation owner.

The owners of the said piece of land are convinced that they will buy it at whatever price given. But here the catch is that the owners must sign a deal that allows the company to market it as its own.

Sadly, the land marketing company is paid directly by buyers but fail remit the money to the real owners. The matter is then dragged to the courts leaving the poor investors with worthless documents and no land to show.

For instance, Lesedi Developers Ltd – a land-selling and housing company based in Thika left thousands of investors with nothing to show after a landowner demolished houses built by one of them following a dispute with the director.

According to the frustrated investors, they paid Lesedi all the dues but the company did not remit the money to the land owner.

Some of the many companies that have folded with investors’ money without delivering on the land and houses promised and have cases in courts include Banda Homes, Lettas Developers, Dinara Developers, Tehillah Holdings and E-Farm Housing Cooperative Society.

The cases have dragged for years and the poor investors continue to pay for loans they took from banks to purchase the land.

Companies which have gone under with investors’ cash include Gakuyo Real Estate, Lesedi Developers, Urithi Housing Co-op, Kamuthi Housing Co-op, Suraya and Cytonn. Banda Homes, whose owner Andrew Kamau has since declared himself insolvent, went under with nearly Sh4 billion belonging to its clients.

Demand for houses and scarce land has resulted in Kenyans falling for the con game as the government watches without taking action.

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