Nairobi — Fraudulent real estate agents and companies might find themselves on the noose if a new bill seeking to nab their activities is passed into law.
Today, thousands of cases are in court while others are being investigated in which land and housing companies have been accused of swindling clients of their hard-earned cash dashing their hopes of owning houses.
Trans Nzoia Senator Allan Chesang has sponsored the Real Estate Regulation Bill 2023 which intends to put in place regulation measures for real estate agents and real estate projects.
In order to streamline the industry faced with unscrupulous individuals, the real estate companies will be required to be registered by the registrar of real estate and license issued by a board of directors under the Act.
Under the regulation, the real estate agents will be required not to facilitate the sale or rent of any parcel of land, apartment, or building in a real estate project which is not registered in accordance with this Act.
The companies are forbidden from involving themselves in any unfair trade practices, including falsely representing standards, misleading representation concerning the services rendered, and permitting the publication of any advertisement for property that is not intended to be offered.
"A person shall not practice as a real estate agent unless that person has been issued a practicing licence by the Board of Directors and has complied with the requirements of this Act," the bill read.
The Real Estate Board will be required to advise the national and county governments on the regulation and development of the real estate sector and regulate real estate agents and real estate projects.
The Board will also be responsible for the registration of real estate agents, real estate projects, licensing real estate agents, and maintaining a public database with information on real estate agents and real estate projects registered, and maintain a public database with information.
Stiff penalties have been put in place in the regulations with anyone liable to committing an offence liable, to a fine not exceeding five million shillings or to imprisonment for a term not exceeding two years or to both.
Most of the tricks used by scammers 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.
In order to reign in on rogue real estate companies that have continued to fleece unsuspecting Kenyans of their hard-earned cash, the bill proposes that no developer shall advertise, market, book, sell, offer for sale or invite persons to purchase any plot, apartment or building in any real estate project that is not registered in accordance with the Act.
Further, where a real estate project is to be developed in phases, every such phase shall be considered a separate real estate project and the developer shall obtain registration under the Act for each phase separately.
The purchasers shall be entitled to obtain the information relating to approved plans, layout plans along with the specifications, approved by the competent authority and such other information as provided in the Act or the rules and regulations made the agreement.
The purchaser will be guaranteed to know the time schedule of completion of the project, including the provisions for water, sanitation, electricity and other amenities and services as agreed to between the developer and the purchaser in the agreement for sale.
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"if the developer fails to comply or is unable to give possession of the apartment, plot or building, in accordance with the terms of agreement for sale or due to discontinuance of their business as a developer on account of suspension or revocation of his registration under the provisions of this Act or the rules or regulations made thereunder," the bill reads.
Swindling real estate companies have been competing for advertisement airtime on media platforms to reach potential buyers who are scammed by trusting the media oulets without through verification of the media outlets.
Chesang in his proposed bill seeks to tame that by obligating the developer to publish the advertisement or prospectus issued on the online public portal of the Board to avoid falsely representing the project.
