Agony of investors as Thika houses stall for six years gobbling millions

 

Would-be investors have cried their ducts dry after a promising real estate project in Thika turned out to be a nightmare. 

Among them are elderly people who poured into the dream of owning an affordable home their entire pension and life savings.

Others had taken loans, which they are still repaying, to acquire one- and two-bedroom apartments whose completion they claim is more than four years overdue. 

Ms Anne Gathambi, an advocate, was in 2015 informed by a friend about an off-plan real estate development in Thika by Dinara Developers. 

She was living in the United States back then. When she returned to Kenya, she was upbeat her family would soon get a good home.

She visited the project site next to Ananas mall along Garissa road in Thika and found structures of all the five blocks were up.

Next, she visited the office of Dinara developers in Westlands, Nairobi. 

A search at the lands office revealed the mother title was clean and registered in the name of Dinara, the company that was selling the apartments.

Abandoned site

“I then paid Sh2.5 million for a two-bedroom unit that initially belonged to someone who had opted out of the project. Different people paid different amounts depending on the point at which they purchased, so that those who bought units when the project was starting paid less. The units were also of different sizes – one and two bedroom,” said MS Gathambi.

“The promise was that we would get the units by 2016, but this did not happen. When we visited the site, we found it abandoned and that’s when we realised things were not okay. It took us six months to find Mr Andrew Kamau, who gave us a long sob story of how he parted ways with his partner and how it affected the financing of the project. Soon after, he said, he closed his offices in Westlands and the next thing we knew he had launched a project called Banda homes,” Ms Gathambi explained.

Dr Njuguna Humprey Kimani, the Managing Director of Metrocosmo, a property management company in the capital city, had also put his money in the scheme. 

He got to know about Dinara Apartments’ Mazuri estate project through a friend.

He explained that there were five blocks of apartments. Four had 29 two-bedroom units each and one block had 49 one-bedroom units. At the commissioning of the apartments project in 2013, the promise was that the apartment would be ready in 18 months – in the early months of 2016.

“I made my payment of Sh2.5 million in 2015 for a two-bedroom apartment. It’s been more than six years now and none of us has moved into our houses,” said Dr Njuguna.

“All efforts to have Mr Kamau, the developer, complete the units have failed.  I last saw him in 2018 before he shifted his office. I also met with him three times the same year, and each time he promised to complete the projects in three or six months. He has other projects such as phase two of Dinara apartments, Banda and now Oak apartments that he is advertising,” said Dr Njuguna.

He further explained that the apartments were bought on an off-plan agreement, where investors buy into a property before it is completed.

Outstanding works

The apartments are in various stages of completion.

Metrocosmo Valuers, who had been hired by the investors, stated Block A has 30 per cent outstanding works that would require about Sh26 million to complete. Block B’s outstanding works were valued at 45 per cent, which would require Sh45 million to complete while Block C has 10 per cent outstanding works, which would need Sh9 million to complete. 

Block D has 30 per cent outstanding works (Sh28 million) and block E 50 per cent outstanding works (Sh44 million).

The site would require Sh5 million while the entire project requires about Sh155 million, noted Dr Njuguna.

“What irritates me is that Mr Kamau is in breach of contract by six years and yet instead of making it up to us by hastening the completion of the project, he is moving on to other projects. There are posters and banners advertising his apartments even in sports clubs,” said Dr Njuguna.

“Right now I would be hesitant to buy anything off-plan in spite of the fact that we have very genuine people who actually deliver and keep their promises to their clients,” he added.

“More than 165 would-be owners are regretting putting their money into the project. Mr Kamau pocketed at least half a billion shillings from Dinara apartments and walked away. People are paying loans for houses they haven’t occupied,” he explained.

Mr Samuel Kinyanjui, who bought two two-bedroom units on February 25, 2014, each at Sh1.6 million, said when he made his first site visit, the foundation for the first block was being laid.

Monthly instalment

“Payment was to be done over two years in monthly instalments, which I paid. I’d pay a monthly instalment of Sh60,000 per unit. After the project stalled, you would find around five people at the site doing minimal work to convince members progress was being made,” said Mr Kinyanjui.

As the group of 71 investors pursues arbitration, their treasurer, Mr Kinyanjui, said one member had complained to him that Mr Kamau had told him that arbitration would take him nowhere.

“At first we tried to book an appointment with him to seek an amicable solution but he declined all our invitations to a meeting. Whenever we sent people to him, he would keep them waiting in his office for six or more hours and then demand that they see him one by one. Other times he would give them an appointment but be away on the agreed-upon date. As we continued meeting to chart the way forward, he started sending a representative to give us completion times that were never met,” complained Mr Kinyanjui.

A handover calendar sent to the investors by the developer explained that the blocks would be handed over by the end of 2019.

“The handover calendar is as follows: Block C 17 August 2019, Block D 7 September 2019, Block E 28 September, Block A 26 October and Block B 23 November 2019,” it read in part. 

In 2019, investors at Banda homes, another project by Mr Kamau, complained to a national television that Mr Kamau had taken their money and disappeared. He was yet to deliver houses to buyers two years after signing the agreements.

The agreements stated he would build houses at Pinewood and Rosewood estates along Thika road. 

Each buyer paid Sh3.9 million in 2018, when the project was rolled out. A year later, not a single unit had been completed. When he was interviewed by a local television in 2020, Mr Kamau blamed Covid-19 pandemic for the delay, promising to complete the houses as soon as possible.
Dr Njuguna blames lack of regulation for real estate investors’ woes.

Poor policing

“The closest we have to regulation is the Estate Agents Registration Board, which is established by the estate agency cap 533 of the laws of Kenya. It regulates the people who practise the art and skill of real estate. However, because of poor policing, more than 90 per cent operate outside the registration board. They are are essentially quacks,” said Dr Njuguna.

He further explained that all registered players are held accountable by the regulatory agency while the rest are accountable only to the extent stipulated by their contracts with clients. 

A call to Ms Eunice Macharia, the chairperson of the Estate Agents Registration Board, confirmed real estate developers have no regulator, and that the board only deals with agents.

On April 15, 2021, Ms Rose Nabiswa, the registrar of the board, published a notice in the Nation newspaper cautioning the public to ensure any estate agent they deal with  provides a registration certificate as well as annual practising certificate before any form of engagement.

“All consumers of services by estate agents are hereby notified that the estate agents cap 533 laws of Kenya makes it mandatory for estate agents – that is any persons who by way of business negotiate for or otherwise act in relation to the selling, purchasing or letting of land and buildings erected thereon – to be registered with the board…in order to protect the interest of the public and enhance professionalism in the real estate sector, consumers may request the estate agent to produce a letter of good standing,” read the notice.

Kenya Property Developers Association CEO Elizabeth Mwangi explained that the organisation is not a regulatory agency and, therefore, members join voluntarily.

The Nation had mailed to seek answers as to whether they were aware about the alleged conmanship at Dinara developers and what measures they had taken.

A search using the key words ‘Dinara Developers’ on the internet displays a plethora of results, including videos and long paragraphs detailing investors’ pain.

Yet to be occupied

The search results include videos uploaded by a local media house where it is featured as a land-selling company transitioning into property development.

Through a phone call, Mr Kamau claimed two blocks were already complete, and that investors had already occupied two blocks, with most of them only customising their houses.

“We did a handover of the apartments to the owners last week and did heavy documentation, including leases. Those complaining have probably not completed paying,” said Mr Kamau, adding that the investors are required to provide proof of payment before they occupy their houses.

However, a site visit confirmed the unnamed buildings are yet to be occupied.

Mr Kinyanjui had, however, decided to complete the outstanding works. He stated that the finishing on all the two-bedroom units in his block, including two of his, was poorly done.

He said apart from the apartments not being connected to power and water, the perimeter wall was also not well done. In addition, he said, the walls had a single coat of paint and the washrooms and floor tiles needed fixing.

“There are no toilet seat covers, the bathroom has no instant shower and the water is not connected to the county council supply. We have done communal cost-sharing for power, water and security, which cost Sh28,000 for each unit. So I have had to part with Sh56,000 for my two units,” said Mr Kinyanjui.

“Mr Kamau has never stepped onto this site ever since we started these completion works on our own. As we pursue arbitration, we shall also seek compensation because we are completing works that we had already paid for,” he concluded.    BY DAILY NATION