This archive report was first published on 6 January 2022.
January 6, 2022
Kenya's real estate sector has experienced significant growth in recent years, with many developers and financiers investing heavily in the industry. However, despite the growth, the sector remains a challenging terrain for developers, financiers, landlords, and property managers to navigate.
One of the major challenges facing landlords and property managers is the issue of non-payment of rent. According to Washington Agutu, the man in charge of the asset management division at the National Housing Corporation (NHC), the law currently favors tenants more than investors, making it difficult for landlords to evict tenants who refuse to pay rent.
Agutu called for the empowerment of landlords to have the leeway to vet their own tenants and choose who to admit and who not to. He also suggested that landlords should be allowed to use technology-aided solutions to manage property, such as smart houses that can disable a tenant's access if they fail to pay rent.
Agutu's comments come at a time when the government is also grappling with the issue of rent collection. The State Department of Urban Housing, which manages 77,000 houses, has reported that rent collection is below the expected Sh125 million every month. The department has attributed the low collection rates to lack of automation in their system, which has led to leakages and discrepancies.
Agutu also highlighted the issue of tenants obtaining titles for housing units and refusing to pay rent. He suggested that the best course of action in such cases is to take the tenants to court, which can result in lost revenue for the landlords.
Developers and property managers are calling for a review of the judicial orders that protect tenants and leave out investors. They argue that the current laws make it difficult for landlords to evict tenants who refuse to pay rent, resulting in lost revenue and damage to their investments.
Agutu's comments have sparked a debate on the need for tougher regulations on tenancy to protect the interests of landlords and property managers. The debate is expected to continue as the government and stakeholders in the real estate sector seek to find solutions to the challenges facing the industry.
