Buying "Off-Plan" means buying a house based on an architectural drawing before it is built. The attraction is obvious: the price is usually 20-40% lower than a finished house. However, Kenya is littered with stalled projects where buyers paid millions for apartments that were never completed.
The Common Risks
- Stalled Projects: The developer runs out of money or diverts funds to another project.
- Substandard Quality: The brochure showed Italian tiles, but the finished house has cheap local ceramics.
- Double Allocation: The developer sells the same unit to two people.
- No Title Deed: The developer built on land that had a bank loan, and the bank auctions the whole building.
How to Protect Yourself
If you must buy off-plan, follow these strict rules:
- Due Diligence on the Developer: Don't just look at their website. Visit their previous completed projects. Talk to the people living there. Did they get their Title Deeds? Was the project on time?
- The Land Search: Your lawyer must conduct a search on the land where the project is being built. Is it owned by the developer? Is it charged to a bank?
- Escrow Account: Never pay the full amount directly to the developer's personal account. Insist on an Escrow Account managed by lawyers. The money is released in stages (milestones) only when construction reaches specific levels (e.g., Foundation, 1st Floor, Roofing).
- The Sale Agreement: Ensure the agreement has a "Completion Date" and a "Refund Clause" with interest if the project stalls.
Buying in Kiambu or Kilimani?
We have seen too many people lose their life savings to "ghost projects." Let Wanyoike & Partners review the developer's contract before you pay a deposit.