Fourways Junction Houses: Equity Bank is set to repossess ten mansions situated at the Fourways unction over debt that real estate couple Suraya was unable to repay. The repossession will be effected after the High Court ordered construction firm China Wu-Yi Company Limited to hand over the houses.
The houses are located at Hibiscus and Tulip apartments in the estate. They are owned by Suraya Property Group and Muga Developers, and they were built using various loan facilities of undisclosed amount, borrowed ten years ago from Equity Bank.
In November 2020, the High Court in Nairobi had ruled that the construction company could not recover the houses because Suraya’s co-developer, Muga Developers, owed Equity.
In court papers, China Wu-Yi said that it struck a deal with the two developers to posses some of the houses as part of the payment for its services in the project that is located along Kiambu Road. Suraya Property however denied this and said that the property was charged to Equity Bank, which granted the Sh. 1.76 billion cash for the project.
China Wu-Yi says that Suraya advertised in a newspaper in March 2009, a tender for the construction of Fourways Junction, phase I. The Chinese firm said it completed the job. As at August 2011, the pending certificates had accumulated an outstanding sum of Sh. 166 million. The parties allegedly engaged in talks and it was proposed that the developer pays Sh. 30 million for bill of quantities, a further Sh. 57 million was to be paid in cash after the houses were sold and the balance of Sh. 79 million was to be repaid by transferring four hibiscus villas and two tulip apartment units to the construction company.
The deal entailed three more hibiscus villas and one tulip apartment to make it seven hibiscus villas and three tulip apartments. The construction company, however said the real estate company failed to honour the deal, only handed to it four villas and refused to transfer the title of all the house as agreed. And during routine checks, the company said it met a buyer who said he was in the process of purchasing one of the houses they had agreed, should be transferred to it.
In his ruling though, Justice David Majanja declined the request since Muga Developers owes Equity an undisclosed amount of money. It advanced the company the loan nine years ago. “The bank is owed money by Muga, which continues to accrue interest and will at some point outstrip the value of the security if not paid. In that event, the bank, which has no contractual relationship with the Plaintiff (Chinese Contractor), will not have any recourse against the Plaintiff for that loss,” Justice Majanja ruled.
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In the current ruling, the court noted that it is common ground that the financial facility which the bank granted the developers has not been repaid in full. Justice Majanja said the contractor does not have proprietary interest in the suit property that would defeat the Bank’s securities. “It is my considered opinion, any person who lays claim to the ownership of any housing units which are on the property charged to the bank, should strive to ensure that the bank loan was paid of,” Justice Majanja ruled.