Rising rent defaults push Nakuru landlords to the wall

One of the apartments next to Bondeni slum in Nakuru City on January 25, 2022. [Harun Wathari, Standard]

The mushrooming of low and middle-class housing schemes has produced a high number of landlords as the real estate market in Nakuru County continues to grow.

A majority of the housing schemes are investments by private developers.

This as Nakuru - Kenya's newest city - tries to catch up with the other big three cities of Nairobi, Mombasa and Kisumu in terms of housing standards.

The rapid growth in housing has also presented some challenges to stakeholders.

The Covid-19 pandemic, which ravaged the global economy, only exacerbated some of these challenges.

The tough times have led to massive rent defaults by tenants, illegal electricity connections in slums and unpaid water bills giving property owners endless headaches.

Some landlords are suing the defaulters and auctioning their belongings to recover rent payments.

These challenges have caused pain to the landlords and tenants in equal measure.

Pursuing defaulting tenants has not been easy, forcing the landlords to hire the services of professional agents at a commission rate of between 10 to 15 per cent.

"The work of pursuing these rent defaulters is not easy especially when you live far away from them. They (defaulters) take this advantage to disappear with our money. Some of them don't honour the goodwill they enjoy from us," said James Kamau a landlord at Racecourse Estate. Kamau admitted having lost a substantial amount of money, which he cannot recover.

Landlady Wambui Kiama said the harsh economic constraints had seen her tenants struggle to pay rent but hoped things would soon improve.

"Times are hard, which has contributed to the difficult times for us (property owners) and the tenants but hopefully things could improve with time," she.

Due to her advanced age, Kiama decided to hand over the management of her houses to an agent.

"It gives me an easier time as the role of chasing rogue tenants has been left to the private agencies," she said.

In the property industry, there are honest and sly tenants and according to Kiama, it is difficult to know them at the initial stages.

"When the tenants occupy our houses in the initial stages, we hardly know their characters but after a certain period is when we come into terms with the realities from them (tenants)," she said.

Industrial expert Elly Ogutu said some affected landlords have been forced to come for advice from them.

"Our opinion has shaped the industry as we advise them on different ways to tackle their problems. Some of the landlords end up handing the management of their property to us," said Ogutu who is the Managing Director of De-Negotiator Agencies, a property consulting firm.

Before full management of the properties, he said some property owners are keen for them only to handle some particular stubborn tenants.

"This is because of their fear to lose more revenue by paying us a commission. They (landlords) only come for advice from us to handle particular tenants instead of offering us full management of their properties," said Ogutu.

"Some of these landlords are cagey when they hand over their properties to us thinking we reap them off."

He said the property owners who over the years had maintained their closeness to them in managing their properties had laughed all the way to their bank accounts.

"This is because we know how to manage their tenants while they (tenants) know the penalties facing them or we could surcharge them if they default in paying rents in good time," he said.

Asked whether he had managed to record new business for the last two months, Ogutu said he had achieved only ten per cent of the target business.

"Business is hard to come by at these hard times when new business hardly comes our way. What we get is from very difficult clients," he said.

Ogutu has been in this business for over three decades.