Property in the child’s name

By Harold Ayodo

Some children in Kenya own property running into billions of shillings.

Their parents buy property and instruct lawyers to register their children — many in private nursery and primary schools — as owners.

However, these wealthy children who even have investments in the Nairobi Securities Exchange (NSE) are unaware of their fortunes.

It is for similar reasons that some tenants in upmarket areas do not pay rent to landlords in cash but deposit to directed bank accounts of their children.

The parents have several reasons for having their children registered as owners of apartments and homes in high end areas in major towns.

For instance, some investors in real estate who thrive on bank loans opt not to be registered owners lest they default.

It would be difficult for creditors to auction property registered under the name of a child as the investments are — legally — not yours!

Many properties were transferred to names of children before the now defunct Kenya Anti Corruption Commission (KACC) closed shop.

The big shots — mostly in Government — believed that the anti-corruption watchdog would raise eyebrows if their investments were not in sync with their salaries. ?

Propertied children

Nevertheless, some parents introduce babies to property ownership early to prepare for their future.

Another set of children who own homes, apartments and land are those born of single parents, making them sole heirs.

Others are those whose wealthy parents passed on and included them in their Wills as sole beneficiaries.

Some modern day parents also opt to register property in the names of their children to avoid battles over matrimonial property should divorce beckon.

For some married women, registering property under children is the surest way of locking out from inheritance children their husbands may father with mistresses.?

For children who inherit property of their late parents, courts often appoint guardians or trustees to administer the estates on their behalf until they reach 18 years.

Legally, the guardians have power and responsibility to administer the estate of the child — receive, recover and invest the property for the benefit of the child.

Other responsibilities include taking reasonable steps to safeguard the estate of the child from loss or damage.

If property owned by the child are rental houses, the guardian must keep records of payments up to date and produce them in court when required.

Moreover, it is an offence for a guardian to neglect or fail to produce books of account in respect to property belonging to a child when demanded.

Guardians’ duties

According to the Children’s Act of 2001, guardians of the estate of children are guilty when they fail to account, make losses or damage the property.?

Lately, children are moving to court to sue their relatives over investments left by their late parents.

Take the case of the two children of the late Vice President Michael Wamalwa who have sued their step-mother Yvonne, for over Sh36.4 million gratuity after his death.

The children, Alice Muthoni Wamalwa and William Wamalwa, want their step-mother to account for Sh7.9 million she allegedly received on their behalf as minors.

They claim that there was an agreement that William and his brother William Wamalwa Junior would be paid Sh3.9 million each.

They are further seeking orders to compel Yvonne to account for money they claim was found in their father’s briefcase at the time of his death in London on August 23, 2003.

According to Muthoni and her brother, their step-mother is not involving them in the running of their father’s estate.

Consequently, they also want to know how the income from the rent of their house in Karen is spent.

Justice GBM Kariuki, who is presiding over the case, gave Yvonne’s lawyer Albert Khaminwa two weeks to respond to the allegations.

Khaminwa told the judge that the nature of the case required him to take instructions from the widow, who at the moment resides in Australia.