Pension scheme seeks auctioneers' support to recover Sh150m rent dues

A section of an estate in Kilimani, Nairobi, where retired Postal Corporation staff were offered houses under the pension housing scheme. Members say they have been receiving auction and eviction threats over rent arrears. [David Njaaga,Standard]
Within just a day, Rose Nyaga helplessly watched a large part of her 33 years of sweat and tears vanish. At 60 years, she is now sleeping on the floor of the house she pictured as her retirement home.

This is after auctioneers swept it clean in pursuit of rent arrears amounting to over Sh2.5 million. Her Kilimani house is part of a two-acre 40-housing unit belonging to the TelPosta Pension Scheme.

The scheme, however, says she and 13 others owe it rent amounting to over Sh25 million.

The Scheme, whose portfolio includes investments worth Sh10 billion, is also planning a similar rent distress exercise on its other property along Jogoo Road that has 127 housing units.

The two and three bed-roomed houses on Jogoo Road’s Likoni Flats form part of Telposta Pension Scheme assets. Chief Executive Peter Rotich says the scheme is determined to recover Sh125 million accumulated rent arrears from its tenants.

Ms Nyaga says she has been living at Elgeyo Marakwet Court in Kilimani, Nairobi since 1986. Upon her retirement she was promised priority and told the house would be sold to her.

Instead, two weeks ago auctioneers descended on the house and the 13 others and seized their household items including fridges, water dispensers, TV sets, and furniture. Residents also claimed they lost some valuables in the operation.

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Ms Nyaga worked for the now-defunct Kenya Posts and Telecommunications Corporation (KPTC), which she joined in 1979. She was then given a house with monthly deductions as housing allowance.

She says that when KPTC split in 2003, they were given offers to buy the two-bedroom houses at slightly over Sh2 million each. KPTC was split into the Postal Corporation of Kenya (PCK), Communications Authority of Kenya (CA) and Telkom Kenya. “When the corporation split in 2003 they opted to sell the houses and we were given offers of Sh2.3 million. The only problem was that all the houses had one title deed and we were told to wait,” she told the Financial Standard.

She says her problems started when brokers and middlemen invaded the process. “But when the titles came out they started selling to other people who paid even higher prices,” she claimed.

However, TelPosta Pension Scheme CEO says the 13 suffer from “false entitlement” and have been living there illegally after ignoring notices and court orders stating they pay rent.

“They were given a priority in March 2007 and were unable to pay within the 90-day period. They went to court and were given an extended period to buy. They were still unable to buy,” explained Rotich.

Rotich reckons that the houses along Jogoo Road were offered at Sh1.7 million. He observed that out of the 40 units in Kilimani, 27 were sold and only the 13 are remaining. Ms Nyaga said auctioneers have raided the estate before, though the case is still pending in court.

However, according to Rotich, five real estate agents were appointed by the scheme to collect rent for the past few years.

“They’ve been staying in those houses since 2007 without paying rent. The pension scheme relies on rent collected from its premises to pay benefits to members. “One is supposed to pay rent until you buy the houses. They have not been sold because of a court case but the courts have ruled that you can distress them for rent,” he said.

Telposta wants them to vacate if they can’t pay the monthly rents but has not issued eviction notices yet. Some of the tenants used to pay the rents but defaulted for months over the years.

Rotich explained that a court prevented the Scheme from evicting the tenants but said their continued stay there was hurting the scheme’s income as members annually asked for increment in benefits.

The 10,000-member scheme pays Sh64 million monthly as benefits to members.

“It is in the interest of the members of the scheme that these houses are sold,” he said.

“There is a court case, essentially we cannot sell the houses without the case being dispensed away with. What happened was not eviction, it was distressing for rent,” said Rotich. Other affected residents who spoke to The Standard also claimed that the pension scheme wants to evict them so it can sell their houses to the “highest bidder”.

Based on the current market value, the houses in Kilimani are estimated to fetch between Sh5 million and Sh12 million each with rent costing at least Sh40,000 per month.

Dorothy Muga, one of the 13 tenants raided by auctioneers, said she would not leave.

Rotich maintained that the scheme has a right to claim returns on its investments on behalf of its over 10,000 members and have even switched off power for Government in Huduma Centre at GPO over rent arrears.

“There is no mandate imposed on the housing scheme to provide subsidised housing to the tenants and the pension scheme is in the business on behalf of 10,000 members so the few tenants who are not willing to pay rent should vacate,” he said.

He says some of them belong to the scheme and want to earn benefits without paying rent.

“Some of them are pensioners. The scheme has never failed to pay them their pension benefits despite the fact that they stay in the houses without paying rent,” he said.

Jane Irungu, whose household items were also seized, thinks “big people” wanted to allocate houses for themselves.

“This is a high-cost area and someone is eyeing it. They cannot believe that people who once worked as messengers, clerks, and supervisors for KPTC can own houses,” she said.

Those affected claim that valuations done by the auctioneers on the household items seem to be below market price. A water dispenser that ranges between Sh7,000-Sh15000 was valued at Sh1000. The 12 items seized in her house including furniture, TV, four burner cooker are valued at Sh28,000 yet Sh2.6 million is being claimed as rent arrears. The auctioneers’ charge has also been set at Sh200,000.

The residents showed The Standard court orders barring the sale and advertising of the household items but Rotich said the orders were from a lower court and would be protested.

According to Rotich, they have legal backing to ask for rent.

“There are no orders of injunction restraining the scheme from collecting rent,” said Rotich, adding that the auctioneer gave them 14 days. Those who failed to comply vacated and would treat those cases as bad investments.

“We followed the due process until the court told us you can proceed and levy distress. This puts the scheme in an odious position as part of the outcome to pay them pension emanates from rent collection.”

He said most had not even gotten clarification from the managing agents about exactly how much they owe.

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