A Nairobi landlord is counting his loses after losing houses valued at Ksh1.5 billion following a court tussle with a well-known bank.
A report by Business Daily on Monday, March 29, indicated that a Nairobi Court had approved the sale of the houses through public auction by the bank after the landlord defaulted on debt.
The investor had taken out a loan of Ksh1.1 billion from the bank in 2017 with the aim of constructing 24 houses in Lower Kabete.
The money was guaranteed by three houses located at the same place and the resultant project was to be sold as housing units to settle the debt.
The Milimani Law Courts in Nairobi as pictured on November 18, 2019
The company then ran into headwinds and defaulted on the loan prompting the Bank to issue demands seeking the investor to settle the debts.
After noting that there was no payment plan, the bank decided to issue statutory letters asking the investor to sell the houses through public auction to settle the debt.
The developer, however, sued the bank over the demand letters.
In its court documents, the bank argued that it was legally allowed to pursue the settlement of its debt
“A party that pollutes the river of equity does not deserve any injunctive relief.
“Once the property has been offered as security it becomes a commodity for sale in the event of default,” argued the bank through its legal department.
After assessing the evidence, High Court Judge Wilfrida allowed the bank to sell the properties in order to recover the debt.
She further dismissed a case by the developer filed in 2019 that was seeking to have the sale declared illegal.
An Empty Court Room