Commercial Bank of Africa Centre in Upper Hill, Nairobi. PHOTO | FILE
Opinion and Analysis
By MARTIN DIAS
In Summary
- Reforms will greatly assist Kenyans to carry out transactions with more confidence and surety.
The real estate industry is today the largest single
sector experiencing rapid growth. Even US President Barack Obama
admitted that much had changed since his last visit to Kenya.
He was amazed and impressed to note that Nairobi’s
infrastructure had developed significantly. He said: “Kenya is on the
growth path having the highest growth rate in East and Central Africa.”
Today many Kenyans are shopping for homes. They are
constantly looking around the neighbourhood for the right home to buy
or apartment to rent.
The number of Kenyans and even expatriates hunting
for houses are numerous, probably in their hundreds, thus providing real
estate agents with ample opportunities to provide housing solutions
from the market portfolio.
The commercial sector also offers another line of
opportunities as business enterprises are looking for office space to
rent or buy and save on rent.
This is big business for estate agents, from
established ones to midsize companies. Not left out are briefcase agents
who are in their hundreds if not more.
A briefcase agent is one who has no office, works from a cell phone and has the sweetest tongue and power of persuasion.
Indeed, with some humour but facts, we can admit that today everyone and anyone is an estate agent.
Recently, I was privileged to be invited to a
cocktail at the prestigious Capital Club in Westlands courtesy of Radio
Africa Group. The function was the launch of their upcoming motor and
property expo to be held at the KICC grounds.
The guest speaker was acting Land secretary Fred
Matiang’i. Of interest was his speech touching on new regulations to be
implemented in reforms targeting estate agents.
His concern was that there was no order or law to
regulate their existence and have entities that are duly registered and
governed by the Estate Agent Act.
As chief executive of an established agency called
Financial and Property Consultants Ltd, I found this topic to be of
immense interest and significant importance to this vibrant industry.
I listened carefully to every word and decided to share his speech with all players in this industry.
The Cabinet secretary posed some pertinent and relevant questions to the guests that included the following:
1. How many Kenyans have lost money in a house
letting transactions? Many have paid a deposit and thereafter never seen
the agent again.
2. There may be cases of Kenyans in the diaspora who may have
lost money in the same way, possibly in a house purchase involving
paying a money deposit. Have they lost deposits to agents?
3.When you drive around you can observe many FOR SALE or TO
LET signboards in the neighbourhood. These signs come in all sizes and
shapes at different locations. Strangely you even see such signs on tree
trunks or even on electricity poles. How do you tell who is a genuine
or licensed agent?
Many of us will agree that we may have been victims
of dubious agents and have been conned out of huge sums of money. We
are talking about a thriving industry that is serving a large community
looking for good homes.
4. How do we deal with this problem and bring sanity to the industry?
Dr Matiang’i brought out these concerns and
suggested a plan to regulate the industry. This included registering all
estate agents in the market as well as setting up a central database to
hold all the required information on the agents.
Vital information includes the registered name of
the agent, KYC (Know Your Customer) data, location of their offices and
physical address, and names of directors and key staff.
Other information will include a tax compliant certificate and operating permits like single business permits and office leases.
With such a database, Dr Matiang’i can initiate a coding system through which estate agents will be identified.
When a home buyer looks up a code number of the
agent concerned, he can get the agent’s details and feel confident that
he is dealing with a credible party. In case of any problem, the agent
can be traced from the paper trail.
The deadline for agents’ registration was given as
September 30, 2015. It is anticipated that the CS’s team will have
compiled this data within a month or two after the deadline.
Players in the estate agency fraternity will be
called upon to provide their input on suggested changes to the Act. I
urge all industry players, big and small, to actively participate in
this important exercise.
I also urge them to actively get involved in bodies
like the Estate Agents Committee, the Kenya Private Developers
Association and other related property organisations. Our involvement
will bring sanity and order to this vibrant industry.
The regulation of the industry relies upon the Property Act which is also yet to be reviewed.
Dr Matiang’i confirmed that the ministry would
eventually present this exercise in a written proposal to Parliament for
approval before assenting into law. It would thereafter become a
requirement to be followed by all stakeholders in the industry.
These reforms will also greatly assist Kenyans in
the diaspora carry out transactions with more confidence. The diaspora
community is fairly large and an important contributor to the ExchequerWe must ensure the industry is properly regulated for more Kenyans to
start planning their homes and shopping in a secured environment. We
need to see more investments made at home from our brothers and sisters
abroad.
In return, this industry creates huge job opportunities. But it needs tighter regulation.
At the end of the session as I sipped my third
glass of wine, I smiled and applauded Dr Matiang’i’s plan to evolve the
real estate industry.
Bwana waziri, well done on this initiative and please follow this to the end until it is law.
Mr Dias is the chief executive officer, FAPCL Group md@fapcl.com
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