Nairobi residents seek class action over land rates increase

Politics and policy 

City Hall, the Nairobi County government headquarters. Photo/FILE 

By KIARIE NJOROGE, gkiarie@ke.nationmedia.com

In Summary

• Kenya Alliance of Residents Association (KARA) is seeking to have all property owners in Nairobi County made parties in the case filed last week by Kaputei Residents Association.
• The application is challenging increase in rates from 17 per cent to 34 per cent.
• Kaputei was granted orders to pay the old rates, pending the hearing and determination of the case.

City Hall could face a class action suit over the increase in land rates for vacant plots, which it is banking on to raise Sh5.6 billion this year.

Kenya Alliance of Residents Association (KARA) Tuesday said it would seek to have all property owners in Nairobi County made parties in the case filed last week by Kaputei Residents Association.

The application is challenging increase in rates from 17 per cent to 34 per cent. Kaputei was granted orders to pay the old rates, pending the hearing and determination of the case.

On Monday, Loresho North Residents Association also filed a suit similar to that of Kaputiei and another by Nairobi Senator Mike Sonko.

“We are looking at consolidating all these cases and have them heard by one judge,” said Kara CEO Stephen Mutoro.

Robert Gitau, the lawyer representing Kaputei, said the procedure in increasing rates under the Rating Act had not been followed.

If the court rules in the residents’ favour, the county could lose as much as Sh2.8 billion in annual revenue.

The accountant in charge of rates at City Hall, Stephen Mureithi, said that in the 2012/13 financial year, they collected Sh2.8 billion in land rates.
The doubling of rates would raise the amount to Sh5.6 billion.

READ: Life gets tougher in Nairobi as City Hall raises charges

Mr Mureithi said those who choose to pay the old rates until the case is determined would be exposed to a three per cent surcharge from Wednesday. The due date for payments was Tuesday.

“If we should lose, you have a credit for next year but if we win, you’ll pay the other half and the interest,” he said.

Of the 135,000 ratable properties in the county’s database, he said, only 55 per cent had been regularly paying rates.

It is believed that less than half of the properties are surveyed and listed in the database, meaning only a third of property owners pay rates. Effectively, this means that less than 30 per cent of city property owners pay rates.

“If the county government was to make sure that all people pay, even at the old rates they would still be able to deliver services,” said Kara chairman Richard Nyaga.

He said the county government should consult property owners, ensure the charges are fair and provide services commensurate with the charges.