MARKETING AFRICA MAL 18/17 mal 18:17 online | Page 36
THE REAL ESTATE
OFF PLAN
INVESTMENTS IN
REAL ESTATE
By Nancy Murule
O
ver the last couple of months,
we have witnessed a number
of property buyers coming
to the fore claiming to have been
swindled by developers over off plan
real estate purchases. Specifically, the
Simple Homes and Gakuyo Real
Estate debacle!
The Simple Homes Case
Formed in October 2015, it started
operating as a developer claiming
to sell houses off plan via a tenant
purchase scheme, in which buyers
were first required to join their
cooperative and pay a Kshs 2,000
admission fee, then pay a 25%
deposit for the houses in various
locations including Syokimau and
Kitengela.
After this, they would be paying
monthly installments equivalent
to their current rental rates which
could be as low as Kshs 24,000 per
month. The prices of the houses
were fixed and no interest was
charged. The buyers were to assume
occupancy immediately after
completion and could pay off the
75% from 5-40 years.
‘‘ Off plan investment refers to the purchase
of property before completion, generally
driven by the high price of real estate and
the long time taken to deliver units. The
buyer hence buys the property off the plan
or design stage in the development. It has
become increasingly popular as the prices of
the property sold are much lower than market
rates, and can be up to 50% less than the price
of a completed house.’’
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They however did not take members
to site, were not registered by any
of the developer bodies, and when
clients inquired on progress and
requested site visits, they shut down
operations as well as the online
activities, which was in February
2017. Local dailies have reported that
at least Kshs 500m have been lost
by investors and homebuyers in the
scheme. The Directorate of Criminal
Investigation has since then started
investigating the matter.
The Gakuyo Real Estate/Ekeza
Sacco Story
Gakuyo Real Estate/Ekeza Sacco is
alleged to have collected in excess of
Kshs 100m from about 7,000 clients
in deposits with each paying Kshs
10,000 with the total sum inclusive
of subsequent installments being in
excess of Kshs 3b. The deposits are
supposed to accumulate to quantities
large enough to purchase either
houses or serviced plots in various
parts on the country including Embu
and Nanyuki.
The company was supposed to deliver
the first batch of houses in 2016 but
they have not been delivered with