Off-plan housing 101: The approvals that may land you in trouble

The potential traps in off-plan house purchases are more than just money vanishing into the bottomless pockets of con developers. [iStockphoto]

Ownership of a home through the off-plan arrangement has both pros and cons.

A couple of years ago, several leading off-plan developers in Kenya collapsed under claims of incompetence by disenfranchised buyers.

The main complaints revolved around fraudulent developers who pocketed investors' money and never broke ground. Some started construction and then stopped, asking for additional money beyond what had been initially agreed.

But the potential traps in off-plan house purchases are more than just money vanishing into the bottomless pockets of con developers.

Nashon Okowa, a construction project manager, insists that the statutory approvals for developments could land buyers into trouble, with some developers keen to cut through shortcuts.

Lack of some of the approvals could backfire on the buyer. While no house should be opened for occupation without authorities confirming it has satisfied all legal requirements, some developers go as far as forging documents, which could backfire on the new owner.

"In serious democracies, the debate as to the legality or illegality of a document ceases with the signature of a government official, but not so in my beloved country. It would be a travesty to even have such an imagination. We crossed the Rubicon long ago," Mr Okowa says.

"Every document, whether from a government institution or not, must be put to the authenticity test."

County government's approvals

In his book "Don't Buy That House," a guide to off-plan house purchase, Mr Okowa talks about the requisite approvals, starting with those by the county governments.

It is a law requiring that all projects must be approved at the counties before the commencement of any construction works, he says. The county government is able to scrutinise and approve architectural, structural and civil drawings.

Mr Okowa believes more should go through the county government's microscope.

"I have never understood why in this century and with the limited resources we have nobody has seen it appropriate that electrical and mechanical drawings should also be included in the approvals list," he writes.

Unscrupulous developers use quacks, and a buyer should do their due diligence. "Some developers, in their infinite foolish wisdom, prefer to use unregistered consultants to do their projects and then procure the licence of a registered one for just the approval process."

"(You should) ask for the architectural county-approved drawings. Usually, they are blue in colour. Check the architect on the construction site board, if the project is ongoing, is the same on the approved drawings. If you find a different name, put your question marks."

There are various stamps on the architectural plans to show approval due to the different departments they have to go through, he says.

Structural and civil drawings should also be submitted by a government-licensed engineer as a legal requirement.

The buyer should also check the building order. "This is the approval letter that accompanies the architectural drawings. It contains the approval details and the conditions for approval to show if there were encumbrances," he says.

Structural and civil drawings should also be submitted by a government-licensed engineer as a legal requirement. [iStockphoto]

NEMA approvals

The aspiring house owner should also check for the National Environmental Management Authority (Nema) approval.

Under The Environmental (Impact Assessment and Audit) (Amendment) Regulations of 2019, developments can be categorised into low-risk projects (such as places of worship and community-based and social projects), medium-risk (such as establishments of multi-dwelling housing developments of not more than one hundred units and hotels with bed capacity not exceeding one hundred and fifty) and high-risk (such as establishments of new housing estate developments exceeding one hundred housing units, hospitals and new townships), Mr Okowa writes.

Developers undertaking projects in the low and medium-risk categories are expected to submit to Nema a summary of the project report of the likely environmental effects of the project. However, those working on high-risk projects must submit a comprehensive report.

Some of the latter want to run away from this as the comprehensive project report is time-consuming and expensive. So they submit that the project is under the medium-risk category.

"You have to confirm that the Nema approval given conforms to what is being built or intended to be built," he says.

WRMA approvals

Another statutory requirement is the Water Resource Management Authority (WRMA) approval. This must be sought when the proposed construction is next to a water catchment area. The riparian reserve, the area next to the water catchment where no permanent structure could be constructed, often ranges from 4 to 30 metres depending on the type of catchment.

Overlooking this requirement cost many of their properties in 2019 when the government ordered the demolition of houses built on riparian reserves.

"Once you have realised that the development requires a WRMA approval because of a river or a stream that is next to it, request the developer to share with you the approval from this authority. Call the WRMA to confirm. Follow it up with an email for record confirmation," he writes.

KCAA approvals

The Kenya Civil Aviation Authority (KCAA) is another important statutory approval, when building around public airports or airstrips, including military barracks' airstrips.

"KCAA controls the heights of buildings around these places to ensure the safety of airplanes when taking off or landing. This approval, just like the WRMA one, brings to the fore the importance of site reconnaissance before buying a house," Mr Okowa says.

NCA approval

Another necessary statutory approval is the National Construction Authority's (NCA). Before the commencement of construction works, every construction project must be registered with the NCA.

"The NCA approval is given after a developer has obtained architectural and structural drawings approvals at the county, an environmental licence has been granted by Nema and a contractor has been awarded construction works by a developer. It is the last licence to be issued in the approvals cycle."

He says this specific approval has a "simplicity" and an "inclusive nature," with NCA "bringing in more professionals to a project."

"Here, the licences of the electrical engineer, mechanical engineer, quantity surveyor and contractor are also required for approval to be issued. It is a fully online process and the beauty of it is that the Authority has linked its approval system with the various respective professional regulatory bodies so that it is quite seamless," Mr Okowa writes.

"Also, various project consultants are sent private notifications by the Authority to accept whether they are involved in the project or not."

The developer must submit the county-approved architectural drawings, approved structural drawings, and Nema licence to NCA.

If the development is within a water catchment area or near an airstrip, then the approval of WRMA and KCAA will also be required.

Licences of a registered architect, structural engineer, electrical engineer, quantity surveyor, mechanical engineer and contractor are also submitted together with the drawings, Mr Mokua indicates

"The Authority then retreats to verify the approvals and documents, visits the site for the proposed project before issuing the development with approval. If the project is issued with approval, then you can be sure as a buyer that it has registered, licenced professional consultants with the respective licensing boards. In addition, it shows that the contractor is also properly registered by the Authority and can carry out such a valuable project," he notes.

This is not a full-proof endorsement of the authenticity of a project since all these licences can be acquired for the sole purpose of approval and nothing else, he warns.

"That is why some of us have been calling for the criminalising of the sale of consultant's licences. In serious democracies, a licence like this would completely legitimise the development it cannot be in but it is not the same in our case. We have completely complicated the irreducibly simple."

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