PROPERTY MARKET: Exercise due diligence before investing in property

Mwenda Thuranira, CEO Myspace. Image|Courtesy

It is a dream of every Kenyan to own a home. Nearly everyone you meet in the streets especially those staying in cities like Nairobi, Mombasa and Kisumu where costs of housing are high always envision owning their own homes to avoid paying rents, which takes a big chunk of their monthly incomes. We all know that building or purchasing a home is perhaps the greatest monetary task and risk of our lifespans. Sometimes you have the money and buy a house or a plot to build and you later learn that whoever sold you the house is not the rightful owner of the property or the land. Am sure some of you have had first time experience of this. You can guess what follows next. You might end up having perpetual court battles or lose your life some of the time if you were too unlucky. Imagining losing your hard-earned coin and property plus putting your life at risk because you did not do your homework well. You can avoid these pitfalls and many others if you do little things that matter right.

Commenting on this, Real Estate Developer and CEO Myspace Properties, Mwenda Thuranira, said, “the challenge with most people who want to acquire property is they don’t take time to do due diligence. Imagine it took you 5 years to acquire property through either outright purchase or mortgage. Or maybe say it took you more than 5 to 25 years either saving or paying a bank loan. It will be very sad if you took 25 years paying for a loan then someone later comes and claims you are sitting on a riparian land or public land and that is why we advise that you do your due diligence or engage a competent property agent or developer to take you through the process.”

When talking of due diligence, it is not only an issue of concern in Kenya alone. It is a global issue. You can end up investing in air with your lifetime savings.

Due diligence in the real estate industry is the purchasers’ mandate to do an examination of the home or land to ascertain whether they are content. During this time, the purchaser does a detailed investigation of the state of the property and the viability of purchasing the property. The buyer is permitted not to continue with the buying process should they in one way or the other not be content with their findings. 

Recently, the country has experienced green ‘mambas’ bringing down properties worth billions on public or riparian land. Some buildings have been brought down when private properties are sitting government projects space for instance the Taj Mall building that paved the way for the expansion of Outer Ring Road. We are also yet to forget the multibillion properties that were brought down when Thika superhighway was being constructed. You can imagine the pain one goes through after losing such investment without any compensation. 

MySpace property. Image|Courtesy

Many think the first step to take when you want to acquire property, is to start comparing prices of properties and jumping into property tour vans without knowing what exactly you are looking for. This is where most people make a mistake. According to Mr. Mwenda, the first step to take is to have the reason of acquisition clear. You need to make it clear whether you are intending to acquire a property for residence or rentals. Then from there you can make good decisions.

“The other thing one should consider is the location of the land. It will be an exercise in futility if you purchase a property that it is clear that it is sitting on a land that is suspicious. You do not need to go to the ministry of land to confirm that. The people who stay next to that area have the history of that land and they will give you the whole story to enable you make the right decision that will save you a lot of trouble, ”he added.

Before penning the property sales agreement, it is advisable not to assume any of the critical steps to avoid the ‘I wish I knew regrets’ later. Once parties sign the sales agreement, the contract is now legally binding and the buyer is now obligated to make the deposit required by the seller.

Myspace Properties Boss further explained on the red flags one is supposed to take note of and raise concern immediately. He says that you might not get to know everything within a day. It might take you some time and it will depend on the nature of the transaction. What you are buying and where will depend on the kind of information and documents you might need to verify.

 

 

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