Bill seeks to do away with scammers in real estate
Land and real estate investors will no longer lose their money to unscrupulous agents if a new bill is passed into law.
This is because every real estate agent shall maintain and preserve such books of account, records and documents in the prescribed manner and not facilitate the sale or rent of any parcel of land, apartment or building in a real estate project which is not registered in accordance with the Act.
This is even as stringent penalties await persons who undertake a real estate project that is not registered.
The Real Estate Regulation Bill 2023, sponsored by Trans Nzoia Senator Allan Chesang now seeks to put in place mechanisms for the regulation of real estate agents and real estate projects.
In order to protect purchasers from unscrupulous conmen, purchasers will be entitled to obtain the information relating to approved plans, and layout plans along with the specifications, approved by the competent authority.
In addition, buyers will be entitled to know time schedule of completion of the project, including the provisions for water, sanitation, electricity and other amenities and services as agreed to between the developer and the purchaser in accordance with the terms and conditions of the agreement for sale.
“A person shall not practice as a real estate agent unless that person has been issued a practising license by the Board of Directors and has complied with the requirements of this Act,” the Bill reads in part.
In addition, investors in the multibillion real estate sector will also be forced to seek for registration, licensing and plan approvals if the proposed law is enacted.
The first-time lawmaker proposes the establishment of a Real Estate Board whose functions shall be to advise the national and county governments on the regulation and development of the real estate sector and regulate real estate agents and real estate projects.
The Board will also be responsible for the registration of real estate agents, real estate projects, license real estate agents, maintain a public database with information on real estate agents and real estate projects registered and maintain a public database with information on real estate agents and real estate projects.
In addition, the Board will prescribe standard fees and charges to be levied by real estate agents and developers, ensure compliance with the orders or directions made in the exercise of its powers under the Act and perform such other functions as may be necessary.
“A person who fails to comply with, or contravenes any of the orders or directions of the court issued under this Act commits an offence and shall, upon conviction, be liable to imprisonment for a term not exceeding three years or to a fine not exceeding Ksh10million or to both,” reads part of the bill.
The management of the Board shall vest in a Board of Directors consisting of a Chairperson appointed by the Cabinet Secretary, the Principal Secretary responsible for matters relating to land or a designated representative and the Principal Secretary responsible for matters relating to housing or a designated representative.
The Principal Secretary responsible for the National Treasury, one man and one woman nominated by the Council of Governors (CoG), a person nominated by the association representing the largest number of purchasers of land in Kenya and one person nominated by the association representing the largest number of developers in Kenya will be part of the Board of Directors.
A person nominated by the association representing the largest number of real estate agents in Kenya; and the Registrar appointed in accordance with section 15 who shall be an ex officio member of the Board will also form part of the management.
According to the proposed law, the Board may appoint such officers, agents and staff as are necessary for the proper and efficient discharge of the functions of the Board under this Act.
“This Act shall not relieve the Board of the liability to compensate or pay damages to any person for any injury to them, their property or any of their interests caused by the exercise of any power conferred by this Act or any other written law or by the failure, whether wholly or partially of any works,” reads part of the Bill.
Chesang further proposes the establishment of a Registrar of Real Estate Agents and Projects who shall be appointed by the Board of Directors through a competitive recruitment process.
The Registrar shall maintain a register of real estate agents and real estate projects, receive applications for registration and, with the approval of the Board of Directors, register real estate agents and real estate projects.
The Registrar may on the recommendation of the Board of Directors, suspend or revoke the registration of a real estate agent or real estate project and perform such other functions as may from time to time be assigned by the Board of Directors.
“The Registrar shall serve for a term of five years and shall not be eligible for re-appointment.”
The Bill proposes that the Registrar shall keep and maintain a register indicating the date of the entry in the register, the address of the person registered the qualifications of the person and such other particulars as the Board may from time to time direct.
“The registrar shall remove from the register any name which is ordered by the Board of Directors to be removed from the register under this Act,” reads part of the Bill.
Chesang in his bill further proposes that where the name of a person is entered in the register, the registrar shall issue to him a certificate of registration in such form as the Board may prescribe and the certificate shall remain the property of the Board.
He added: “A certificate of registration issued by the registrar shall be valid and shall remain in force for one year, but shall be renewable on the payment of the prescribed fee.”
Chesang further posits that the Registrar shall establish and maintain an online digital real estate portal to facilitate the registration of real estate agents, facilitate the registration of real estate projects and to provide a platform for interaction between real estate agents and developers with the national and county governments, private institutions, investors and other relevant institutions.
The portal will also help provide access to finance, information, innovation and the global market for real estate agents and developers.
Chesang argues that the Kenyan economy is the largest economy in East Africa with a real estate market turnover of over Ksh100 billion annually, adding that the real estate sector has witnessed a lot of fraud in the recent past hence the need for a regulatory regime as the current regulatory regime has been ineffective in regulating the sector.
