Win for Real Estate Investors Against Off-Plan Developer Defaulters

This ruling will give homebuyers and real estate investors some confidence when purchasing off plan properties.

Win for Real Estate Investors Against Off-Plan Developer Defaulters

In a landmark ruling, the High Court ruled in favor of real estate investors whose developer, VK Construction Limited for delaying possession of their off-plan apartment. The court found that the developer had breached the terms of the sale agreement by failing to complete the apartment within the agreed timelines, not meeting the quality standards, and refusing to grant possession to the buyers when requested.

READ ALSO: Why Are Kenyans Shying Away from Buying Off-Plan Houses?

The plaintiffs, Nizarali Pradhan Sumar and Shehnaz Nizarali Sumar, filed the case in 2019 after purchasing an apartment in a development comprising 32 four-bedroom apartments. They had signed a sale agreement on April 23, 2015, with an agreed purchase price of Kshs. 18,800,000.

However, they ended up paying a total of Kshs. 18,860,000. Upon inspecting the unit, they discovered multiple defects, including water leakage in all bedrooms and poor-quality finishing. Despite their attempts to take possession of the apartment, they were denied access, and when finally allowed in, the unit was uninhabitable.

READ ALSO: Buying Property Off Plan: Is it Worth It? Pros & Cons

The case proceeded to court after the developer failed to respond to the completion notice and did not enter an appearance or file a defense. The High Court ruled that the developer was in breach of contract and ordered a full refund of Kshs. 18,860,000, Kshs. 489,490 for finishing expenses and an additional compensation of Kshs. 150,000 per month for loss of income.

In delivering the judgment, the court emphasized that the plaintiffs had fulfilled all their contractual obligations, while the defendant had failed to meet its commitments. The ruling reaffirmed that buyers of off-plan properties are entitled to compensation if developers fail to deliver as per the agreement.

READ ALSO: Unlock the Secrets -10 Must-Know Tips for Off-Plan Buyers!

This ruling serves as a significant precedent for real estate investors who face challenges with off-plan developments. It highlights the legal protections available to buyers and underscores the importance of holding developers accountable for project delays and poor-quality construction.

For real estate investors, this decision offers a glimmer of hope, ensuring that their rights are safeguarded and reinforcing trust in the off-plan property market.

READ ALSO: Off-plan Property Investment and What You Should Know and Consider

Lulu Kiritu
WRITTEN BY
BuyRentKenya
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