Sectional titles' push and pull that is frustrating home owners

What began as a dream to own a slice of prime property on Nairobi’s coveted Riverside Drive in 2020 has degenerated into a frustrating nightmare. 

Many buyers of residential units at Riverside Drive Square Lower East are now counting missed opportunities that vary from one buyer to the next and range from difficulties in using the units as collateral for bank financing to reselling them. 

All their problems, they said, stem from the developer’s continued hold on the property’s mother title while showing no indications of processing the sectional titles for the units.

This is despite earlier agreements and continued assurances.

The developer has also subjected the owners to high management fees through unilateral selection of the company that oversees management of the property, without a procurement process that would help lower the management fees.

“The development was completed in 2023, but since then, we have not received any information from the developer on the processing of the sectional titles,” said Fardouse Adam, one of the distressed owners of units at the Riverside Square Lower East.

Without these individual titles, she noted, owners lack full legal autonomy over their properties, severely impacting their financial flexibility and property rights.

Ms Adam was among the first to buy units at the development in 2020 and said she paid upfront for two three-bedroom units. 

Riverside Square Lower East is part of Riverside Square, an integrated mixed-use development on Nairobi’s Riverside Drive.

The larger development comprises residential developments – Lower East, Upper East and Lower West – as well as a commercial development on the Upper West side. 

Beyond the challenges of getting their title deeds, homeowners on the Lower East Side are grappling with what they describe as oppressive management practices.

They accuse the developer of having unilaterally selected the company overseeing the property’s management, which they said was done without a transparent procurement process that could have led to more competitive — and lower — management fees.

The developer hired HassConsult, the firm which had also been marketing the property off-plan, to manage the affairs of the apartment building.

The contract with HassConsult has been signed by Abdirazak Sharif, the director of One Zero Seven Riverside Drive Ltd, which developed the property, and Ben Mbithi Ngutu, who was the owner of the land on which the property was built.

The unit owners paid a service charge of Sh20.1 million in 2024, of which HassConsult was paid a management fee of Sh4.89 million. The management fee goes up every year by 10 per cent.

The residents believe they could have gotten more competitive rates had they been involved in the procurement process. 

Management company

Adding to their woes, the Sectional Properties Act, which mandates an annual general meeting (AGM) for property owners to form a management company and take charge of their property’s affairs, appears to have been disregarded. 

“We have also not held an AGM to enable us to form a corporation that should take over the management of the property, including the selection of the management company,” said Brian Otiende, another buyer.

The current management company has failed to convene an AGM for more than two years, further ensuring that the buyers have little control in crucial decisions affecting their homes.

Puzzling to the buyers is that at the beginning of 2025, the developer, alongside the property’s previous owner, registered a property owners corporation – the Owners of Sectional Plan No. 603/43 Corporation – that now appears to own the property.

They argue that this corporation should have been registered in their names as the actual unit owners, with each buyer subsequently receiving individual sectional titles. 

The Sectional Properties Act states that the “corporation shall consist of all those persons who are the owners of units in the parcel to which the sectional plan relates.” The Act further requires the registrar of titles to issue a certificate of registration for the corporation.

According to the agreements signed between the buyers and the developer seen by Real Estate, the buyers were required to pay some Sh30,000, “being the cost for incorporation of the Property Owners Company and the Resident Management Company and the transfer and allotment of shares in the property owners company”. 

Management company

While they parted with the money, they noted that this was exorbitant.

“Every buyer was made to pay Sh30,000 towards registration of the management company. The total amount collected by the developer’s lawyers was exorbitant. It is also in addition to other fees they have been asking for, which they never offer an explanation or breakdown of the expenditure despite our requests,” said Segeni Mungai, another buyer. 

The residents decry a host of other charges that they have been asked to pay, which also include an additional Sh120,000 each to facilitate processing of their sectional titles, which had not been included in the sales agreement. 

Mungai added that the owners are contemplating seeking refunds in the absence of proof of prudent use of funds.

Efforts to reach the developer, Mr Shariff, for comment were unsuccessful, with calls and text messages going unanswered.

However, the developer had, in July last year, communicated advising them that the processing of sectional titles was 90 per cent done.

The reason for the delay in processing individual titles, he said, revolved around the extension of the lease term of the mother title. He also noted the complexity that comes with the process. 

“It is important to point out that whereas we could have commenced processing the titles, we decided to undertake an extension of the mother title first and obtained a further extended term of 99 years from October 1, 2019,” the developer had informed buyers in a letter through its lawyer Abib Advocates. 

They argued that skipping this step would have burdened each owner with the complex and costly process of individually extending their leases, involving physical planners, site visits, advertisements, and numerous approvals from Nairobi County and other agencies.

“You will appreciate the amount of work we have been undertaking, which is ultimately for the best interest of the owners, as they will be compliant with the new titles.”

The developer also maintains that they have no vested interest in the property’s ongoing management. 

“We wish to point out that we have no personal interest in the management of the property, which is evident in the existence of an independent management company.”

However, for the aggrieved homeowners, these explanations offer little solace. In a bid to smoothen the transition process, some of the buyers got together and formed an interim committee.

The residents explained to Real Estate that the main purpose of the committee was to assist the unit owners acquire sectional titles, but also liaise with the management company about the concerns of the residents and assist in easing its work, where, for instance, it experienced difficulties in collecting outstanding fees.

The committee has since grown to include more than 70 per cent of the unit buyers. 

It, however, faces difficulties, with the developer’s lawyers declining to deal with the committee, saying it would handle each unit owner individually, which, according to the residents, appears to be overwhelming for the law firm.