Plan to regulate land buying firms welcome

Investors scammed by land-selling company Lesedi Developers Limited protest outside their offices. FILE PHOTO | NMG

A Bill seeking to regulate land-buying companies is a welcome move that Parliament should back.

Many Kenyans continue to be swindled by fraudsters posing as land investment companies, pointing to the need for safeguards in this unregulated space.

Cases of rampant fraud perpetuated by real estate firms for instance last year prompted the Directorate of Criminal Investigations (DCI) to launch investigations into various companies that Kenyans complained about.

The National Assembly’s Public Petitions Committee is currently handling a petition by a section of Kenyans who allege that investment firm Cytonn Investments Management PLC misappropriated investors’ cash in one of its projects.

Those buying property as off–plans have been the most exposed given that many companies have been abandoning projects along the way after taking money.

Kirinyaga Central MP Joseph Gitari’s planned Bill proposes, among other things, to establish an agency that would regulate all land-buying companies in Kenya and set Sh500 million as the fee to be paid for an operating licence.

The Bill would also impose penalties of up to Sh5 million for non-compliance by the land-buying companies.

The proposed regulations promise to weed out rogue players that have been pooling billions of shillings from the public and then failing to deliver.

The regulations will help secure investments by Kenyans many of whom rely on loans to finance such projects and usually take a big hit when the real estate firms take off.

Such cases, if left unchecked, could hit the financial sector’s loan book, especially for small players, and drive up the cost of accessing real estate loans.

The public should in the meantime carry out proper due diligence, read all the terms and conditions before agreeing to give out any money and flag companies promising deeply discounted deals.