Short end of the stick: Deals that have dashed buyers’ hopes

Residential houses in Nairobi

In the last two years, the real estate industry has witnessed several deals gone bad.

Simple Homes: This was the housing scam of the decade. The company marketed itself as a Special Purpose Vehicle to help Kenyans purchase homes through a “pay rent, own home” model. Prospective buyers were supposed to register with Sh2,500 and place a 25 per cent deposit of the value of the property they wanted to buy upfront. They would then book a unit, which they would occupy once a project was complete. Early last year, it suddenly “closed shop”.

Gakuyo G-Zero Deposit: This was a project under Gakuyo Real Estate and Ekeza Sacco. Prospective home buyers were required to deposit a minimum of Sh10,000 and Sh30,000 for a two and three-bedroom house respectively, as booking fee. They were then required to save at least a third of the cost of the prospective house for up to 15 years in a scheme christened Gakuyo Zero Deposit (G zero D). The deal proved impossible after the withdrawal of some key partners in the project. Those not willing to continue with the project had an option of transferring their money to Ekeza Sacco.

Sh300 million greenhouse pay-out tussle: Diamond Property Merchants entrusted its Kajiado land investors to Nguzo International Limited, who were would manage greenhouses remit profits to investors in Bethany Phase 3 project. Nguzo claimed the greenhouses were damaged by whirlwind and floods, resulting in damaged crops. Locals were also reported to have destroyed the greenhouses. The insurers refused to pay for the damage, making the lost investment a joint loss between the investors, Nguzo, suppliers of agricultural equipment.