Five buildings in Nairobi seized over rate arrears

What you need to know:

The city government, which is owed Sh12 billion, is targeting to squeeze Sh200 million from 150 properties.
Tenants of the five buildings will now have to pay rent directly to City Hall until the county recovers its debt.

Nairobi County government has taken control of five buildings within the city’s Central Business District (CBD) to recover rate arrears owed to it.

Four are prime properties on Moi Avenue, one of the CBD’s major roads, while the fifth is on the nearby Tom Mboya Street.

City Hall has also threatened to take over other properties whose owners owe millions in unpaid rates in what it is calling ‘Operation Clampdown’.

The government, which is owed Sh12 billion, is targeting to squeeze Sh200 million from 150 properties in the next one month.

The first casualties are City Printing Works Ltd, Leo Investment Ltd, P&L Investment Ltd and Princely House Ltd, who own premises along Moi Avenue, and Brighton Investment Ltd, which has property on Tom Mboya Street.

Tenants in their buildings will now have to pay rent directly to City Hall until the county recovers its debt according to the provisions of the Ratings Act. The County will also impose a three per cent interest penalty on the defaulted amounts.

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Speaking to journalists yesterday, County Executive Committee Member for Finance Mr Gregory Mwakanongo said the county had given building owners enough time to pay up before resorting to taking over the buildings.

“Last year, we gave property owners up to 90 per cent waivers on accrued interest (and as a result) we collected Sh780 million,” he said.

Mwakanongo stressed that those who refused to pay, even after the waiver expired, were the ones being targeted.

Another operation will be conducted on Thursday morning. The operation will be extended to the outskirts of the city from January next year.

This comes even as a report on revenue and expenditure for the first quarter of the year cast doubt on whether the county will meet its revenue estimates. City Hall collected Sh158 million between July and September, less than five per cent of the Sh3.7 billion targeted for the whole financial year.

Mr Mwakanongo, however, said this was normal as the county expected to raise most of its revenue from rates in December when businesses renew permits.