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Urithi’s housing bubble bursts as bank puts its land on sale

Mr Samuel Maina is the Chairman at Urithi Housing Cooperative Society.

With a local bank putting up for sale one hundred acres of land belonging to Urithi Housing Co-operative Society, the housing bubble for one of Kenya’s leading real estate developers appears to have burst, and left thousands of its members in a quandary.

Urithi is one of the major developers who emerged to cash in on the Kibaki-era housing boom and which saw several gated community enclaves emerge in both Nairobi and its metropolis.

In its untroubled days, Urithi developed several properties and gave titles to its members.

IN TROUBLE

Now, two of Urithi’s housing ventures are in trouble — one 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.

The Urithi case echoes that of many other developers who have been left with properties they cannot sell, and loans they cannot service either due to poor projection, mismanagement or a housing crunch.

The land in question, named Panorama Gardens, is located in Gatanga, a few minutes’ drive from Blue Post Hotel in Thika. Urithi Housing had acquired this land in 2016 — after agreeing to finance a defaulted loan that the previous owner had with the bank.

They paid him Sh1 billion and took over his bank liabilities, agreeing to repay the bank the Sh500 million balance in five years.

CHALLENGES

“One of our biggest challenges to offset this debt is coming from some members who subscribed to this project we marketed as Panorama Gardens and made a down payment but have never cleared the balance,’’ says Urithi chairman Samuel Maina.

But now he claims they have cleared with the bank and that the bank has stopped the auction.

Urithi was started in 2012 and has 8,000 members.

GAKUYO

Among its founders were its current chairman Samuel Maina and the embattled televangelist David Kariuki Ngare who left in 2013 to set up Gakuyo Real Estate and later Ekeza Sacco, which is in the middle of storm after allegedly swindling its members over Sh1 billion.

Mr Maina says the uptake of plots had become problematic, putting the society on the edge and exposing hundreds of its investors.

For the Gatanga land, the bank appointed Nairobi-based Antique Auctions Agencies to oversee the sale and has served the society with 45 days redemption notice to offset a debt of Sh263 million.

In a letter dated April 29, 2019 to Urithi, the auctioneers issued a notification for sale.

“I have seen the notice, but we are engaging both parties and we hope to settle the matter as soon as possible,’’ said Mr Maina in an earlier interview.

He later said they have repaid the penalties and restructured the loan.

PANAROMA GARDENS

Panorama Gardens was marketed and sold by Urithi as ready plots for immediate development and attracted 400 investors, with an eighth of an acre going for Sh2.25 million.

The investors now claim they cannot develop the property because most of them have never been issued with title deeds while some are only in possession of ownership certificates or agreements they entered with Urithi.

“Out of the 400 investors who bought plots at Panorama Gardens, nearly 70 per cent have cleared their balances. We are currently reaching out to the members who owe us some money to clear their balances so that we can conclude documentation and issue title deeds to the members,” Mr Maina said.

Even as this is happening, another trouble is brewing for Urithi pitting the organisation and investors who bought another property behind Mang’u High School, dubbed Tola 3 and Tola 4.

Ms Jane Wachira bought two undeveloped plots measuring 40×80 in 2016 for Sh2.4 million at Tola 4.

DIG TRENCH

Her biggest predicament is that she cannot develop the land even after completing paying for the property and despite being in possession of an ownership certificate issued to her by Urithi.

In 2017, the vendor who sold the said land to Urithi dug a trench on her property and brought down the beacons claiming Urithi had not cleared paying for the land.

“I bought this property at Tola 4 in 2016 and completed paying for it in 2017. We did not know there was a problem until this year when the landowner who sold the property to Urithi dug a trench and brought down the beacon and marked the property for demolition,’’ said Ms Wachira.

Ms Mercy Kamau also bought a plot at Tola 3 in 2016 measuring 40/80 at Sh925,000 from Urithi.

NO TITLE DEED

She was issued with an ownership certificate with a promise of getting a title deed within three to four months. It never happened.

In April 2017, she started constructing a five bedroom maisonette. In 2018, the landowner who had sold the land to Urithi stopped the development.

However, the Urithi chairman told the Nation they are working with these members to resolve the issue.

“What we have been telling our members is that if a project is in distress, it is only them who can save it. We are trying to walk with our members to resolve the issues,” Mr Maina said.

www.Nation.co.ke

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