Posts Tagged ‘investment’

The joy of almost owning an apartment has rapidly given way to fear and apprehension as the suraya property grouped seemed to slide into a quagmire of litigation. Anybody who reads the papers is definitely aware of the Fourways saga whereby the original land owners felt shortchanged in a deal that made them equity partners through providing the land to build the estate on.

What followed was a legal drama that could easily set precedents on how people in Kenya buy property. The reason I say this is because here were hundreds of people who have paid deposits on the property or even completed there instalments and were due to take possession of the houses and apartments, but were cut short by a court injunction that shut down the whole operation, for a few excruciating weeks, and left everyone worried.

The problem is that if the business crashed all the investors would lose all the money already paid out to acquire their part of the estate, at best we would spend years trying to get it back. This is because developers here use the deposits from buyers to start and often complete their projects. This is a highly risky thing for the man on the street like me and was informed by friends that actually in south Africa your initial deposit goes into an escrow account that the developer has no access to until the completion of the project, therefore they are not allowed to rely on deposits to get their projects going……..they must have completed their financing beforehand!

As the legal tussle amongst the developers ensued, I won’t bother with the details, it became obvious there will be a delay in completing phase one of the four ways estate and that means guys like me in Phase 2 are basically screwed. My sales agreement says completion date is April 2012. Now we are looking June 2013 as the estimated completion date for Phase 2.

And yes I am pissed off!!! The sales agreement makes allowances for almost any type of delay and I doubt I can be compensated. Even worse they have been holding my deposit for a year now plus another eighteen months to go…………..interest free!!!!! The law needs to change and soon.

As for the change mortgage interest rates as I sit out the delays……………..this will be the subject of my next property post.


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