Urithi Housing Cooperative Society is now embroiled in a tussle with its investors, after Family Bank moved to auction land already sold to clients.
The land in question, Panorama Gardens in Murang’a County, was bought by the real estate company in 2016 for Ksh1.5 billion, having borrowed Ksh500 million from Family Bank and charged the land as security.
The land was subdivided and sold to a number of investors, before the company defaulted the loan, prompting Family Bank to invite the services of Nairobi-based Antique Auctions Agencies to recover the money.
In the loan agreement, the lender (Family Bank) reserved the right to recall the facility in case Urithi defaulted on the loan agreement.
An eighth of an acre was retailing at Ksh2.5 million, but business seems to have slowed on Urithi’s side.
Five investors have so far moved to court to stop the auction.
The five, Anthony Mbugua Njihia, Bernard Mwangi Waweru, Purity Kabuba, Onesmus Kamau and Mercy Waithera Kimura, say they had already finished paying for the land, which is acknowledged by Urithi.
The investors had even been given vacant possession and share certificates of ownership awaiting registration of titles.
The investors have already obtained orders stopping the public auction, until the case is heard and determined.
Justice Grace Kemei found that Urithi failed in their part to obtain Land Control Board consent and effect the transfer of the plots to the purchasers.
“Urithi’s act of default and the bank’s acts of disposing the suit land in exercise of its statutory power of sale entitles it to alienate the land thus ocasioning loss to the applicants (buyers),” ruled the Judge.
Reports of auction of the 100-acre piece of land emerged last year, with the company accusing some members of failing to clear their balances after making their down payments.
“I have seen the notice, but we are engaging both parties and we hope to settle the matter as soon as possible.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.
In another project dubbed Tola 3 and Tola 4 behind Mangu High School, investors who bought parcels of land last year were unable to develop their parcels after they were flushed out by the original owner, despite completing payment for the lands.
The vendor who sold the said land to Urithi dug a trench on the property and brought down the beacons claiming Urithi had not cleared paying for the land.
Several developments at the two projects have been stopped by the vendor, with the chairman saying that “if a project is in distress, it is only them (investors) who can save it.”
Urithi started in 2012 and has 8,000 members. Among its founders were its current chairman Samuel Maina and the embattled televangelist David Kariuki 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 Ksh1 billion.