Sifa Gardens’ owners at loggerheads

John Oywa

A simmering row between buyers of houses in Sifa Gardens estate and Tumsifu Agency, the development wing of the Kisumu Catholic Archdiocese, is brewing. The home buyers are accusing the agency of breach of contract.

The row errupted after Tumsifu Agency raised the market price of the houses from Sh3.6 million to Sh6.5 million long after the buyers had paid deposits based on earlier agreements.

It has emerged that some of the would-be buyers of the Sifa Garden houses have instructed their lawyers to sue the agency for breach of contract after a law firm acting for the Archdioceses asked them to either increase the buying price to Sh6.5 million or lose the houses.

Documents confirm that the agency, which is housed at the diocese’s Sifa house, has been trading bitter words with clients who have rejected the increments.

Some of the interested buyers threatening to seek legal redress over the deal are Kenyans in the Diaspora who had paid up to Sh2 million as deposit for the houses whose construction commenced in January this year.

Investigations by Home & Away established that Tumsifu Agency has written to affected buyers through their lawyers Wasuna and Company Advocates asking them to top up or lose the houses.

In a recent letter dated October 22, Wasuna and Company Advocates gave the buyers 10 days to pay the full amount failure to which they would be refunded their deposits.

Spiralling costs of building

The increments are attributed to spiralling cost of building materials.

"Our instructions are that our client, through its professional consultants, has carried out an extensive and exhaustive review of the project with regard to the cost of completing the house allocated to you," says the law firm.

One of the buyers who did not want to be quoted due to his position in the public service says he paid Sh1.7 million in December last year for a house whose price tag was Sh3.8 million. He is now required to pay Sh4.8 million balance instead of Sh1.8 million. Should he be unable to raise this amount, he will lose the house.

His lawyers from Nairobi-based Otieno Omuga and Ouma Company Advocates have written to Tumsifu Agency contesting the decision to increase the cost of the house.

Allotment letters

"By the time you committed yourself to sell the house, you must have done market research and as such you cannot purport to pass any additional costs of construction to me although I doubt that the costs would escalate by a whopping Sh2.9 million," states lawyer Omuga on behalf of the buyer.

He adds: "We think you are attempting to force out initial purchasers who in fact financed the construction costs. Now that the houses have been completed... you can sell them at exorbitant prices. This is unacceptable and immoral.

"The project’s architect, Jerry Ndong’, however, defends the decision to review the sale price of the houses, saying the increase was necessitated by the high cost of building materials.

"The problem started three years after the initial contractor abandoned the project and we had to look for someone else. The cost later went up by more than 100 per cent and the developer will lose if we do not pass it to the buyers," says Ndong’.

Refunding money

He adds: "We re-evaluated the project and informed the archdiocese. A decision was then taken to raise the price. The best option now is to refund the money of those unhappy with the decision."

Tumsifu Agency’s Chief Executive Officer Erastus Khandira says he is aware of the complaints but would rather Kisumu Archbishop Zacheus Okoth and the architect respond to them.

The prelate could, however, not be reached for comment and staff in his office referred queries to the agency lawyers who have written letters to the buyers. Khandira sent allotment letters to buyers on December 15 last year and assured them the houses would commence construction in January. His letter reads in part: "We are pleased to inform you that you have been allotted a house at Sifa Gardens at a price of Ksh 3,600,000 only."

In his letter, lawyer Omuga says he has advised his client to neither accept to pay the increment nor a refund. Lawyers representing other aggrieved investors say they will use allotment letters written to their clients to force the company to withdraw the additional costs. One of the allotment letters written by Khandira confirms the two parties had settled for Sh3.6 million for the houses.

It reads in part: "To date, you have paid Sh1,780,000 only, leaving a balance of Sh1,820,000. Meanwhile, you are expected to pay Sh1,100,000 during construction and the rest during the handing over after completion."

Willing buyer

The letter is copied to the Catholic Archdiocese of Kisumu.

Would-be buyers are complaining it was wrong for the company to accept their downpayment and use it to construct the houses only to demand for more later.

Lawyer Omuga says his client, a civil servant, acquired a mortgage from Kenya Commercial Bank to purchase the house and can, therefore, not pay any more money.

Another senior civil servant who also declined to be named says she had completed paying for the house and was shocked when the agency lawyers demanded that she top up the purchase price.

"Khandaria called and told me to expect a letter from the lawyers. I am shocked," she says.

Lawyer Wasuna, however, maintains the decision by his client to hike the prices of the houses was driven by the rise in the cost of building materials. When he wrote to the affected buyers on October 22, he gave them ten days to state whether or not they would pay the new prices.

"In the event that the new price is unacceptable to you, our client will refund your deposit and put up the property for sale to a willing buyer in the market," states the letter from Wasuna. A Kisumu businessman, Mark Ouko, defends the agency’s decision to raise the cost of the houses.

"Everything depends on the economy. If things changed before they paid the entire amount, they should just accept and pay the additional cost. They should not politicise the issue," he says.