- The hammer is set to fall on the houses in two weeks as the bank seeks to recover the loan advanced to the developer, who still holds the title to the entire estate.
- Some of the buyers acquired the middle class units in 2017.
- Sunset Boulevard Limited, which built and sold the houses, is said to have failed to repay the undisclosed debt with I&M Bank, prompting the auction that has thrown residents into panic.
More than 200 home buyers in Athi River’s Sunset Boulevard Estate are facing eviction from their houses, following a dispute between the developer and I&M Bank.
Auctioneers Monday advertised for auction 204 houses whose value is estimated at about Sh2 billion, putting the home buyers at risk of losing their investment over a loan that they were not party to.
The hammer is set to fall on the houses in two weeks as the bank seeks to recover the loan advanced to the developer, who still holds the title to the entire estate.
Some of the buyers acquired the middle class units in 2017.
Sunset Boulevard Limited, which built and sold the houses, is said to have failed to repay the undisclosed debt with I&M Bank, prompting the auction that has thrown residents into panic.
“Duly instructed by our principals, your undermentioned properties, together with all the improvements erected thereon (two hundred and four units erected on LR NO12867/509-Sunset Boulevard Estate), will be sold by public auction on Wednesday 31st July 2019,” read Monday’s notice by Leaky’s Auctioneers.
The estate built on a 20.2-acre piece of land features a mix of one, two and three bedroom apartments on 23 blocks.
The houses have a market price of between Sh8 million and Sh12 million, which values the units under auction at more than Sh2 billion.
Two learning institutions; Beyruha Academy Pre-Primary and Primary Integrated School, are also set to be sold in the auction.
Sunset Boulevard Limited is 50 percent owned by a Mr Jonathan Feldman and another 50 percent owned by Mr Samuel Mirie Gachathi, according to the Registrar of Companies records.
The investors had built a total of 390 units, but 186 of them are excluded from the auction notice.
Lawyers acting for the developers were Monday frantically fighting to keep off the auctioneers even as it emerged that the bank has been in a year-long tussle with the developer for non-payment of the debt, which is secured by the expansive residential estate.
The High Court last month issued an order stopping the auctioneers from selling off the houses, according to correspondence seen by the Business Daily.
Ogola and Okello Advocates, acting for the developers, Monday wrote to I&M Bank’s lawyers demanding the suspension of the advert and threatening to sue if it was not removed.
“We demand… an advert cancelling the said contemptuous advertisement failing which we will be moving to court immediately to cite your clients for contempt of court,” the advocates wrote on Monday.
But even as the lawyers battled it out among themselves, the reality of losing a home hit the more than 200 home owners living in the Athi River estate.
A caretaker, who did not want to disclose his names for fear or reprimand from his employers, said he had been flooded with calls from worried home owners who are fearing the looming evictions.
Efforts to reach the directors proved futile as one of them was said to have gone into hiding while the other is reportedly bereaved and with his family out of town.
“We have all been caught by surprise and I am receiving so many calls from people who are worried about losing their houses.
"Why don’t you just call the directors because I have not been able to reach them as well to help clarify to us what is going on here,” the caretaker said in a phone interview.
The real estate sector has been going through turbulent times in recent years after more than a decade of robust growth.
The sector’s non-performing loans stood at Sh43.5 billion as at September last year, equivalent to 14 percent of the banking industry’s bad debts.
It has recently grappled with issues such as developers who fail to deliver units sold off-plan and a potential glut in units that buyers can’t afford due to difficulty in accessing mortgage loans.
Some lenders have been opting for out-of-court settlements, hoping to give debtors time to settle the loans and trying to save innocent buyers who are caught between developers and their lenders in the loan recovery disputes.