Investors have little to show six years after paying for land

In October 2014, Mhasibu Housing Company Limited (MHCL) invited its members and the public to buy into real estate property in Ruiru, Kiambu County.

The promise was that those who bought land parcels in the project would be provided with cabro roads, water at a central point, electricity, a perimeter wall all round and title deeds. Some 175 people paid between Sh3 million and Sh3.5 million. Then their misery began.

A visit to the site, which is off exit 13 along Thika Road, showed some work going on but those who bought into the property are adamant that it has taken an awfully long time and pressure to have the work – some work – done.

Some investors have however started putting up their houses but much of the property remains unutilised. Roads are not yet paved, drainage is still under construction and there is no water and electricity connectivity. A nearby housing project, which started at the same time is complete and occupied.

The investment arm of Kenyan accountants’ Mhasibu Sacco Society is now accused of shifting goal posts and the investors say they are yet to get value for their money, six years later.

But the company denies any wrongdoing, saying differences have just been on timelines but most of the promises have been delivered. 

At the centre of the battle is the Mhasibu Bustani Management Company, which is accusing MHCL of failure to deliver what investors paid for. In a letter dated July 23, 2020 addressed to the chairman of Mhasibu Sacco Society (MSS) Limited, the mother organisation, the management company accuses MHCL of shifting goal posts, a situation which it says has disenfranchised investors in the 50-acre plot.

Back in 2014, MCHL, a wholly-owned subsidiary of the sacco, placed an advert in a national newspaper, seeking investors from sacco members and the public in 175 parcels of land in Ruiru. The venture raised about Sh550 million.

“The offer made was that the purchase encompassed six components: A quarter an acre plot, a perimeter wall around the 50 acre property, roads to cabro standards, titles in the individual buyer’s name, water and electricity at a common point for individual buyers distribution,” reads the letter signed by Andrew Juma, the director of the management company addressed to Andrew Bulemi, the sacco board chair.

In an investors meeting on May 12, 2015, issues were raised by those who had bought into the project. Some of them included the issue of title deeds, which they said was vague.

They said when they were investing, the project chairman said title deeds were part of the deal and all that remained was for the investors to construct their units. This, the letter states, however changed.

“Investors are now required (to pay) Sh190,000 to get their titles, electricity has not been installed, water has never been connected to the estate, the management company has never been handed over to investors,” reads the letter.

A quotation letter from Kenya Power sought Sh5.4 million to connect the project to the grid. Morris Njagi, the CEO of the housing company, now says Sh3 million has been paid to the electricity distributor, with the remainder to be paid this month.

“Kenya Power cannot drop electricity in a bush because that will cost them, so they wanted the place developed first,” said Njagi.

The other point of departure between the investors and the company is on common areas where a church, school and recreation area were to be situated whose titles are still being held on to by the officials of the company.

Njagi however said the titles will be handed over to the management company.

On water, the CEO said Sh2.6 million was paid to a neighbouring housing company to connect the property with water, but the company broke the deal and therefore the money will be recovered. The investors however claim Sh17 million was paid, and not Sh2.6 million.

“We find it baffling that such huge amounts of money were paid to another estate’s management company and not the utility company responsible,” the investors say in the letter.

However, in a meeting between Mhasibu Bustani Welfare Group, MHC and Ruiru Juja Water and Sewerage Company (RUJWASCO) on August 21, the housing company agreed with the water firm to provide the connection at a cost of Sh650,000.

A letter by the welfare group to Njagi said attempts to have the project handed over to bona fide shareholders have also come a cropper even after presenting necessary information.

The management company has five directors and three shareholders. The CEO however insisted hat the management has been handed over.

“MHCL registered Mhasibu Bustani Estate Management Company Limited to run the affairs of Ruiru III development (project) and appointed themselves as directors in the interim and in trust for shareholders. Bona fide shareholders of the company have since appointed new directors amongst themselves,” reads the letter.

Apart from the Sh190,000 being demanded for title deeds, MHCL is also demanding more money to release the title deeds.

“A few weeks later MHCL processed titles in their (MHCL’s) name for each investor who had requested their completion documents and demanded Sh40,000 to release the leases/titles. This was done maliciously and without prior agreement or consultations on the same,” says the welfare group.

The investors are now appealing to the sacco chair, Bulemi, to intervene and have the outstanding issues resolved. The investors have also taken the matter to the DCI, where the officials had to respond on the matter.

Yesterday, Bulemi told The Standard the matter is being handled between the two parties. “They are talking to try and resolve the outstanding issues and we hope they will come to an understanding over the same,” said Bulemi.

But as works continue, another letter from Mhasibu Bustani Welfare Group raises issues over the quality of ongoing work. In a letter to MHCL Chair Makokha Wanjala on May 13, the group raises five issues regarding construction of drainage channels, including poorly graded concrete mix, holes on the surface of drainage channels, disintegration of some sections, erosion and uneven channel bases.