City Hall to seize property over rates

City Hall is headed for a new round of legal battles with property owners in the race to clean up its books ahead of the handover to the county government.

Town Clerk Roba Duba said the City Council of Nairobi’s legal department has prepared court papers to enable the auctioning of 2,000 residential properties and seizure of 1,000 business premises over unpaid rates.

The battle will start soon after the expiry of the 28-day grace period that the council handed defaulters on Monday.

“We expect a number of people who have benefitted from past inefficiencies of the council to move to court but this is no longer business as usual,” Mr Duba told journalists.

In its 2012/13 budget, the council estimates its liabilities at Sh17 billion against unpaid rates estimated at Sh50 billion.

Yesterday, the council said it was waiving outstanding penalty on its debts for the last time before its assets and liabilities were handed over to the County Transition Authority (CTA) whose officials assumed office last week.

The council estimates that penalty waiver and the subsequent legal battle will lead to a collection of some Sh10 billion by early August. A similar waiver last year targeted a total collection of Sh1.5 billion but yielded Sh800 million.

“This time, the collection will go up because property owners who understand that this is the last time that local government minister can exercise such discretionary powers have been pleading with us for the final waiver,” said Mr Duba. The deployment of carrot and stick is likely to double revenue from internal resources in the current fiscal year.

In its Sh15.5 billion budget plan for 2012/13 budget, finance committee chairman Michael Ogada said the council expected to raise Sh10.25 billion from its internal resources while Sh5.25 billion was to come from the Treasury.

Like other local authorities, City Hall has lately come under pressure to clean up its books ahead of the planned handover to CTA, the agency mandated by law to steer the transition from centralised to devolved governance.

The eight-member team sworn in last week will also oversee the transfer of staff from local authority structures to the county government.
It is expected to come up with a formula for subdividing the council’s assets and liabilities among Nairobi County, Central government and the National Land Commission (NLC).

While their dealing with property owners is expected to be transparent as outlined in the Constitution, NLC and Nairobi County are expected to come up with separate bylaws that defaulters may find very stringent, CCN officials said. According to its own records, government departments owe the council Sh3 billion while individual property owners are yet to remit Sh47 billion in rates.

Top on the list of institutional defaulters are National Assembly (Sh26 million), Kenya Railways (412 million), Kenya Broadcasting Corporation (259 million) and Kenya Cultural Centre (Sh297 million).

omondi@ke.nationmedia.com