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Tuesday, November 24, 2020

Home owners lose multi-million houses after developer defaulted on loan

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Home owners at the multi-million Gables Park Estate in Mavoko Sub County, Machakos County are counting millions of losses. This is after auctioneers descended on the homes under the instructions of Housing Finance.

The auctioning of the houses which are located along Katani Road comes after the Gables Park Estate property developer, Capital Realty, failed to pay a Sh. 350 million loan that he took at Housing Finance.

The first casualties in the auctioning are eleven home owners. The second casualties include 14 home owners who have already received notice to vacate and pave way for the auctioning. This notice was issued by Legacy Auctioneers on November 3 this year.

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According to the home owners, the property developer had take the HF loan to develop the seventy six units. He however failed to pay off the loan, despite being paid for the houses, completing the construction works and handing over the houses to their owners.

Court documents show that Capital Realty was supposed to service the loan using proceeds from the sale of the houses. By January this year, the court documents show that the developer had defaulted on the principal amount and the interest due which had accumulated to some Sh. 301 million.

The homeowners made an attempt to have the auctioning stopped. However, in a court ruling that was delivered on the 23 of October this year, Justice Oscar Angote said that the interests of the lender as a chargee was superior to that of those who purchased the property. Justice Angote further ruled that the home owners should have conducted due diligence to determine if the property they were buying had been charged to any loan. Ironically, the developer admits that the home owners had fully paid for the houses.

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