Sunday, December 4, 2022

Shock as banks auction 1,000 homes in 2 months

Millions of Kenyans are stuck in debt. Many who have taken bank loans to finance their personal projects are losing their investments to bank auctions.

One of the hardest hit categories by the bank auctions is homeownership. Every day, banks are putting tens of homes up for auction.

For instance, a troubling report that appeared in the Daily Nation recently showed that between early May and late July, auctioneers have advertised more than 1,000 residential properties, with over 85 per cent of them still under construction.

“In May, the auctioneers booked at least 30 pages on four days alone, to advertise more than 400 residential properties, which increased to over 500 residential properties in June, then about 400 in July,” the report said.

It added that over 80 per cent of the properties being auctioned are within the Nairobi Metropolitan area.

These consist of Nairobi, Kiambu, Machakos and Kajiado counties, with most cases witnessed in Nairobi. The report also added that areas like Kayole, Imara Daima and Mwiki have also reported increased bank auctions.

“In Kiambu, Thika and Ruiru had the most residential properties on auction, but other areas such as Githurai, Juja and Kamakis had dozens of such cases,” the report said.

It further cited that Kajiado and Machakos counties have also reported auctioning of homes in Ngong, Ongata Rongai, Kitengela, Kiserian, Syokimau, Athi River and Mlolongo.

“Auctioning of properties has also been reported across the county, but mainly in areas hosting the well-to-do such as Lavington, Kileleshwa, Karen and Muthaiga North,” the report cited.

In Kenya, there are two main types of auctions. The statutory auction sale and an auction sale on behalf of the owner of property. The statutory auction sale includes sale of property that has been charged, for example to a bank.

Uhuru’s shilling: Sh. 1,000 note in July 2013 is today worth Sh. 548

Before this auction is executed, the chargee bank is supposed to issue the chargor in default a 40 day notice to sell.

This notice is in addition to the three months’ notice and is different from the mandatory notice of 45 days under the auctioneers rules.

Where an auctioneer is selling on behalf of a property owner, you should first know if there is an official letter of authorization from the property owner to the auctioneer.

 

 

 

 

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