National Bank ordered to stop transactions involving Nairobi affordable housing title deed

By Catherine Muema On Oct 31, 2024

By Antynet Ford

Nairobi City County Assembly has now written to the National Bank of Kenya to stop further transactions using the title deed for the Jevanjee housing project until the Sectorial Committee on Lands, housing, and Planning completes its investigations.

In a letter to the bank through the assembly clerk, the planning committee has summoned the NBK managing director to appear before them and give details on whether the said title deed was used to secure a loan at the bank.

The MD is also expected to explain to the committee the criteria and circumstances under which the title deed was used to secure a loan how much they advanced in the form of a loan and what purpose.

The committee also requested NBK to avail the copies of all the relevant documents that they relied upon to approve the loan about the affordable housing project.

“It has come to the attention of the Nairobi City County Assembly planning committee that the title deed for the parcel of land on which the Jevanjee affordable housing project is being implemented was presented to NBK to secure a loan to finance the said project. The committee has resolved that National Bank of Kenya stops any further transactions on the said title deed until the committee completes its investigations.” The letter by the assembly clerk states in part.

“The managing director of NBK should appear before the committee on November 6, 2024, and furnish the committee with a report on whether the title deed was used to secure a loan, how much was advanced in the form of a loan, and for what purpose, the criteria under which the title deed was used to secure the loan and the copies of all the relevant documents relied on to secure and process the loan concerning the said project.” The letter added.

An explanation from former planning committee chair and Waithaka Member of County Assembly Anthony Kiragu, who now serves as the minority leader and a member of the committee, indicates that the project developers were to come with money to develop units on the county land and sell them to the public.

But five years later, after all the units were sold before development, there was no progress, and now the title deed was used to secure a loan against the urban renewal policy.

“A developer was supposed to come with money, the county with land, and the developer was to construct units and sell to the public. What is shocking is that the Jevanjee project where almost 1400 units were to be built was sold out within a month and on top of that, there is no progress five years later. They have again gone further against the urban renewal policy and used county property to secure a loan.”

Previously while appearing before the planning committee, Officers from the County government, led by the County Executive Committee Member for urban planning and built environment Patrick Mbogo, and his chief officers, told the assembly planning committee that the county does not have the two important documents for the projects that stalled over two years ago.

In their response to the committee, they said that former Nairobi governor Mike Sonko has the Jevanjee Estate title deed while they do not know where the Pangani Affordable Housing Title deed is.

However, the former Nairobi governor revealed to the media that the Jevanjee title deed was used by the private developer to secure a Sh1.9 billion loan to finance the project.

Previously, Tecnofin had run out of cash saying they were facing financial changes from what they termed as the fast pace of the project.

An attempt through the Nairobi City County Assembly to facilitate access to funding failed to materialize after the court ruled against using the project’s title as security.

The development was to resume last month but the MCA’s said it is still stalled a month after the developer confirmed resumption.

This comes as on April 19, 2023, the Nairobi City County Assembly passed a motion to allow title deeds of the Nairobi Urban Renewal Projects, where the Pangani Affordable Housing Project falls, to be used as security by developers to access funding.

However, a civil society group, Sheria na Watu, filed a case with the Environmental and Lands Court on May 10, 2023, against the Nairobi City County Government and the Nairobi City County Assembly arguing that the move by the latter is unconstitutional.

The court heard that the National Lands Commission was never involved in the process yet it is the custodian of public land.

“It was contended that before the approval of the said resolution by the second Respondent, no authorization was obtained from the third respondent to offer the title of the intended Pangani Urban Renewal Project as collateral, for the benefit of the developers, who are private entities.” The judgment stated in part.

Article 62 (2) of the Constitution states that public land shall vest in and be held by a county government in trust for the people resident in the county and shall be administered on their behalf by the National Lands Commission.