Why apartments are the latest craze

As land in major towns becomes scarce and costly, an increasing number of prospective homeowners are turning to flats and apartments, writes HAROLD AYODO

Honey Court apartments in Nairobi’s Riverside Drive. Due to scarcity of residential land in the cities, developers are turning to flats and apartments to meet the rising demand for home ownership. [PHOTO: COURTESY/Villacare ]

Owning a home is increasingly remaining a pipe dream for many people even as land prices and house rent continue to rise sharply throughout the country. The effect is hard felt in the three cities --— Nairobi, Mombasa and Kisumu — and in and around towns.

In Nairobi, the scarcity of residential land has precipitated the development of flats and apartments, and for a growing number of Kenyans, this is the best chance of owning their own property.

Property developers are erecting more multi-storeyed buildings to meet the increasing demand for homes, and flats and apartments offer cheaper alternatives to maisonettes and bungalows.

Patricia Olero, a single mother of two recently bought a unit at Nyayo Estate in the sprawling Embakasi area. "I found this was cheaper than buying a plot and constructing a home," she says. "Besides, my tight schedule would not have allowed me to supervise the construction of a home in the capital city. It was when I realised the law had provisions for owning a flat as property".

Unfortunately, many developers and home owners have discovered that the one challenge affecting ownership of flats and apartments is securing title deeds for each single unit within a block of flats in a development scheme.

Shared responsibilities

The Sectional Properties Act No. 21 of 1987 makes it legal to own property in the apartments such as those being erected in various parts around the country. The Statute further provides for the freehold sale of apartments, thus enabling a series of owners to own levels of a building above a common plot of land.

Kisumu’s Patel Flats where owners are yet to receive titles a decade after they bought them. They are the first units in Kisumu where the Sectional Properties Act of 1987 would have applied. [PHOTO: JONAH ONYANGO ]

"The rights of other owners must be respected in apartment buildings, especially with regard to sharing the designated common areas which include parking spaces and swimming pools," says Olero.

For purposes of managing apartments, property experts say a management company should ideally be incorporated, where the owners of the units are shareholders. "This is cheaper since the running costs for maintaining the common areas are shared out among owners," says Property Lawyer Lucas Kang’oli of King’oo, Njagi and Company Advocates.

Consequently, a monthly service charge is levied on land rates, security, water and electricity in the common areas, as well as cleaning and landscaping the compound. The management company also maintains a capital fund from the service charge to cater for repairs inside the apartments.

Ownership of flats in several parts of Nairobi is based on the concept of sub-leases, which are granted by the property developer out of his or her leasehold or freehold interest. The subleases of units are for a shorter term than those of the developer who in some cases retains the reversionary title or interest. This means the lease can be renewed after it has expired in the name of the management company so that apartment unit owners can continue owning the common areas.

Reassigning or subletting units

On reassigning the units or subletting, Olero says it cannot be done without the consent of the management company.

Ownership is not restricted to residential apartments but also extends to entire floors in buildings, thereby cutting down on costs. Property experts concur that an increasing number of single women are buying flats and apartments for different reasons. For most, investing in the stock market ceased to be a viable option after suffering losses, and after some invested heavily in the last three Initial Public Offers (IPOs) only to receive a small fraction of their intended shares, an occurrence that these women consider a waste of their investment.

Conveyancer Kang’oli says young corporate women prefer apartments and flats as they offer security and do not take much to maintain. "They also come with a better package, which is the sharing of maintenance costs," explains Kang’oli.

Florence Kariuki, a city business woman invested in buying units in high-rise apartments, all of which she now rents out to tenants. "I think owning apartments is the best thing for the modern woman," she says.

Kariuki adds that restrictions on unit owners within the apartment blocks makes it easier to maintain cleanliness and serenity. "There are restrictions on construction of permanent structures, fixing of aerials on the roofs and hanging of any washings on the front part of the premises," she says.

Restrictions to owners

There are also restrictions against throwing of garbage anywhere else other than designated areas, and the keeping of animals. In addition, each apartment owner or tenant has their own designated parking.

"I feel comfortable with the Sectional Properties Act and owners of apartments must abide with certain by-law," says Kariuki.

Flats and apartments maximise on land resources against the backdrop of a huge national housing shortfall resulting from rising population following rural to urban migration. The construction of flats and apartments by the Government could help resolve the crisis and avert the shortage in the urban areas where land is not expanding.

Review of act

In a recent paper titled Overcoming the Finance and Resource Challenge for Sustainable Housing and Urban Development, the Government, through the Ministry of Housing, stated that the housing deficit is over 105,000 housing units needed annually.

Last month, in a review of the Sectional Properties Act, the Government proposed to make conditions friendlier to formal and informal formal private sector investors.

The concept of sectional titles began in the developed world where the high population vis-‡-vis small areas of land precipitated the development of apartments. Sectional titles are thus based on the principle that each floor or house of an apartment is, in law, deemed a separate parcel of land capable of independent acquisition.

In London for instance, owning of sectional units is a popular concept, where property owners are selling off their backyard flats to pay off bonds and mounting bills. An increasing number of homeowners have rezoned flats into sectional title units. The owners and their tenants then share common areas such as swimming pools and parking spaces.

"This concept is good because it allows low income families to own homes," says Kariuki. "It should be encouraged countrywide."

The Operations Director of Mwalimu Town Properties, Kenyan Macharia, says accessibility to the Central Business District increases the demand for apartments. "It is interesting how buyers are now scrambling for housing units in flats, especially those near the city centre as the perception is that security is guaranteed," he says. "However, there are still many people who would rather buy land and construct their own homes."

Titles in owners’ names

Owners of sectional properties have titles registered in their names, which makes them eligible to charge or mortgage their property legally.

Lawyer Cleveland Ayayo says the Statute for sectional properties should be encouraged countrywide to ease the housing shortage. "For instance, the ownership of units at Kisumu’s Patel Flats could be easier if the Government sensitised people," he says.

Ayayo mainly practices property law and asserts that a number of district land registries based out of Nairobi claim they do not have the capacity to deal with this phenomenon. "Prospective buyers of units in flats at the lake side town get discouraged when they are told to go to Nairobi to transact the dealings at the central registry in Nairobi (Ardhi House)," he says.