The vicious court battle pitting former Attorney General Githu Muigai and mortgage lender Housing Finance involving sixteen units sold through auction worth Sh100 million has raised authenticity queries of properties by the lender after it failed to avail title deed to the buyer.
The new development comes at a time HF is on an overdrive in property sale craze for both loan defaulters and own properties.
In a lawsuit likely to expose the financially struggling mortgage lender’s underbelly, the former AG is seeking a refund of Sh100.5 million from a bank that auctioned the properties back in 2020.
Muigai through his trading company Fair Lake Estate is seeking to terminate the auction deal, arguing that the bank has failed to offer him documents for ownership of the homes.
On the other hand, the bank told the court that Muigai was offered the ownership documents, including the original title deed and leases on September 29, 2020, and asked Justice Wilfrida Okwany not to reverse the auction deal.
In the same court papers, Muigai says he conducted 16 bids for the flats through a representation named Koome Kiragu.
The bank has opposed the termination of the sale deal and return of the Sh100.5 million, saying it has not breached any terms or conditions of sale and that Muigai has already been furnished with documents to ease the transfer of the property.
Muigai filed the case at the High Court in Milimani after claiming he was denied access to the housing units at Zahara Gardens, Ngong Road.
He further argues that the bank failed to provide all the complete documents for each specific apartment auctioned as a separate and distinct lot, a move he says is a repudiation of the auction.
Muigai says the bank was supposed to give him the documents within 90 days upon payment of the first auction price on August 24, 2020.
Muigai argues that the bank breached the sale contract by failing to clarify and notify him of the transaction’s Completion Notice within 90 days, as provided for in the agreement, to enable him to take control of the property.
The houses were auctioned in May 2020 after the previous owner defaulted on a loan.
The case will be heard on June 22.
HF Group wants to sell its head office building in Nairobi, convert some loans to equity and pursue defaulters in a bid in a bid to spice up its capital ranges.
The Group said that it’ll pursue the three methods along with scouting for traders to get further capital because it seeks to maneuver out of regulatory breaches.
The lender said within the newest annual report that it needs to promote Rehani House construction by the end of this 12 months in a transfer that will even assist it meet the regulatory requirement that places a cap on funding in mounted belongings.
Rehani House, a 13-storey high-rise construction positioned on the junction of Kenyatta Avenue and Koinange Street in Nairobi, has been HF’s headquarters for years.
HF has not disclosed how much it is concentrating on to get from the transaction that may now make the mortgage financier a rent-payer in its major places of work.
“The sale of Rehani House building by December 2022 will ensure compliance with investment in buildings to core capital and would also result in a one-off gain,” said HF within the annual report.