Last week, I wrote about the role of resident associations in our lives. The vast majority of urban dwellers today live in a community of some kind, be it apartment blocks, maisonettes or town houses. I closed off my piece by asking how could the Mexican standoff that I narrated, between a vacating tenant, a landlord who had not paid the resident association fees and the management company been avoided? By finding a lasting legal solution to the phenomena that I call “Developers Bait And Switch”. Utopia Ltd is a housing development company that plans to put up one hundred units on a beautiful piece of land overlooking one of the Rift Valley lakes. As housing units are scarce here and the design plans promise the mythical marital legend of happily ever after, several potential buyers make bids for off plan purchases. Prices for off plan purchases are usually a long Sportpesa bet, fraught with performance risk that the developer will actually build and conclude the project. The hope is the buyer will have actual appreciation of value as the price by the end of construction will more often than not increase due to the conclusion of performance risk.

Utopia promises cabro roads within the estate, lighting on the streets, a borehole to service the residents and a connection to the local authority’s sewer line. Buyers fall in love with the concept and purchase off plan units. They get baited by the images and sweet talking purr of the sales team. One year later, Utopia delivers the properties. Without cabro roads. Without street lights. And with a piddling bio digester that can’t absorb even the total amount of crap that the developer is telling disgruntled buyers. Over and above this, Utopia’s lawyers transfer the sub leases to the master title to the buyers. But Utopia fails to transfer shareholding in the company that owns the master title. So that buyers have ownership of their individual units but no evidence of their communal ownership of the whole land. The “switch” has happened: promise heaven and deliver hell.

In this scenario, the only option that buyers have is to sue the developer in their individual capacities. Since they are not shareholders of the company that owns the master title, they do not have the legal vehicle that could have been used to communally hold the developer to account and sue for compensation. Bait and switch tactics are extremely common in the real estate industry and the only recourse gullible buyers have is to sue the developer either for completion of the project (good luck with finding that fellow lounging at the Mauritian coast sipping a cold beer bought with your money) or for a refund of funds paid (again, please check out the Mauritian coastline).

Anyone can be a developer. It’s an unregulated hustle. What gets regulated is the construction standards, the noise and environmental impact standards, the engineering standards and most construction related professional services by the relevant statutory authorities such as the National Construction Authority, National Environmental Management Authority etc. However, promises to provide boreholes, street lights or sewer connections do not seem to be regulated. Thus Utopia Ltd can simply pack up, shed their snakeskin and morph into another cobra ready to strike a new group of unsuspecting buyers. Rinse and repeat.

But all plans have to be filed at a County office in order for building approvals to be given. It starts there. Utopia Ltd and its individual directors should never be allowed to put up another development if it’s messed up before. Occupation certificates for housing projects should never be issued unless what was promised and submitted for approval has been certified as completed. Developers are not being held to account in any shape or form outside the courtroom where they’ve been taken to either by unsatisfied buyers or even more unsatisfied bankers seeking to enforce the judgement debt for defaulted payments on the development loan.

The road to home ownership hell is littered with the good intentions of innocent home buyers and paved with the greed as well as laziness of bad developers. Is there an opportunity to develop a law requiring new (and previously penalized) developers to issue performance bonds to buyers? Can our county offices ensure that the promises made to innocent buyers are fulfilled? Maybe only in utopia.

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Twitter: @carolmusyoka

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