Buyers sue real estate firm for failure to deliver four years later

A real estate firm developing a major gated property in Kiambu County is embroiled in a legal battle with five buyers for failure to deliver the development four years after it was expected.

Individuals who paid Redhill Heights Investments Limited have moved to court and want the firm to pay them money they would have been earning in rental income since March 2013, when the company was expected to have completed and handed over the housing units to them.

The buyers also want the property developer to pay back money paid to banks as interests for loans taken to finance their investments in the houses. They also want the developer to cease construction and instead pay incremental construction costs to them for completion of the houses. “Since the first defendant (Redhill Heights) has failed to complete the construction, the plaintiffs in an effort to mitigate their loss intends to take over the construction, complete the same and recover the costs thereof from the defendants,” say the buyers in court papers filed by their lawyers Njuguna and Partners.

“The Plaintiffs have suffered and continue to suffer loss and damage. They continue to pay interest on monies paid to first defendant for the construction. They have lost expected rental income which they would have earned from contractual completion date.” Redhill Heights had in August challenged the jurisdiction of the High Court at Kiambu to hear the case, arguing that the Land and Environment Court had the jurisdiction to hear the case.

However, in October, Justice Joel Ngugi sitting at the High Court in Kiambu dismissed the objection, noting that the dispute was not entirely about land and therefore the court had jurisdiction to hear the suit. Redhill Heights through their lawyers Walker Kontos has appealed the move by Justice Ngugi.

Additionally, the buyers have accused a senior partner at law firm Walker Kontos of deceit and have sued the firm. They claim that Mr Peter Mwangi drafted an agreement that did not protect them. Mr Mwangi acted as a joint lawyer for the buyers and Redhill Heights Investments, drawing a legal contract between them (the buyers) and the developers.

The buyers say the lawyer failed to disclose any conflict of interest in the shareholding of the Redhill Heights Investments. The contract, the buyers say, failed to protect them and this has left them little room to manoeuvre. The buyers had paid Sh6 million each for the land and a further Sh8.8 million for the town houses.

However, Walker Kontos said there was no mischief in one of their advocates to act as a joint lawyer for the buyers and the real estate company. In an affidavit filed in court on December 6, Laban Githuki Wangari said such agreement drawn by one law firm does not of itself become a confidential matter as those documents have been exchanged and are freely available to all parties.

“In any event, it is not the firm of Walker Kontos that would be called upon as any witness, should it be necessary, but the individual advocate who handled the conveyancing matter, in this case Mr Peter Mwangi,” said Wangari in the affidavit. The registrar of companies lists Peter Njoroge Kariuki Gakere, Yusuf Omari, Summit Investment Services Ltd and Susan Wanjiku Mwangi as directors of Redhill Heights Investments.