By Steve Sabai
Nairobi 21,September 2023, Our attention has been drawn to The Real Estate Regulation Bill, 2023 which seeks to provide for the regulation of the business of negotiating for or otherwise acting in relation to the selling, purchasing or letting of land and buildings; regulation and registration of real estate agents, land companies and developers; and establishment of the Real Estate Board. The Institution of Surveyors of Kenya (ISK) hereby states as follows: Property developers are business people who develop real estate units or buy and subdivide land for profit making purpose.
While ISK appreciates the need to regulate real estate developers in order to restore sanity in the property market, the regulation of professionals and business people should be conducted separately given the dynamics involved. Registered Real Estate Agents are professionals who are registered and regulated by the Estate Agents Registration Board (EARB) established under the Estate Agents Act Cap 533 of the laws of Kenya.
This Act of parliament provides for the registration of persons who, by way of business, negotiate for or otherwise act in relation to the selling, purchasing, or letting of land and buildings on behalf of a property owner. EARB also handles complaints against Registered Estate Agents with those found culpable losing their registration and annual licenses.
ISK wishes to inform the public that the current Estate Agents Act save for a few required amendments is adequate and superior to the proposed bill in as far as Estate Agents are concerned. It is all encompassing and incorporates all categories of estate agency and there is no need for another regulation.
Professional boards all over the world are managed by professionals in the specific field. The proposal by the bill to have a non-professional board regulate professionals is shocking. ISK will not allow its members to be regulated together with developers who are business people. Some of these developers are Land Buying Companies involved in the subdivision of land and thus participate in the business of mass sale of land to the general public. In the recent past, the media has been awash with reports of the public being defrauded. The victims have been mostly foreign investors and Kenyans in Diaspora.
Most of these Land Buying Companies are run by business people with little or no training in real estate. Their main drive is profit and some disregard ethical business practices, hence the chaos in the sector. We have noted that many manipulate the market and give misleading information in their marketing strategy only to finally disappoint the purchasers. We recommend for a “Real Estate Developers Bill” to be formulated.
The bill should focus on regulating developers who deal with constructing real estate units; buying and subdividing plots for selling purpose. We also call upon the Ministry of Lands to empower the existing EARB by allocating it more funds in order to reign in on unregistered estate agents. We also wish to reiterate the fact that there are many reliable and honest developers who meet their contractual obligations.
Existing laws can therefore be used to handle fraudulent cases even as a new Act to reign in rogue developers is being formulated. We further advice members of the public to ensure that they are always dealing with Registered Estate Agents. We conclude by noting that the registration and regulation of land trading companies to protect public interest and wanton subdivision of agricultural lands with no viability for residential use is long overdue.