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You can lose deposit, house if you default.

By Harold Ayodo

I resolved to buy a house from a Government institution six years ago following its pocket friendly cost. The sale agreement stipulated that I pay a deposit then settle the balance in installments before I am furnished with the legal ownership documents. However, I defaulted for some years after my wife fell sick and I was not in a position to pay the installments over a certain period. Recently, my name was among some that were published in a mainstream newspaper for defaulting and were threatened with repossession should we not settle our dues within a specific time frame. The reality is that I am still spending a lot of money on paying medical bills for my wife and may not settle the dues as instructed. Is it legal for the house I bought to be repossessed? Tito, Nairobi.

You can loose your house if you default.

Legally, a seller can repossess property when a buyer defaults payment as mutually agreed in a binding sale agreement. In such cases, sellers can legally repossess their land or homes as provided in the recently passed Land Act 2012. It would be easier for the seller to reclaim the property when there was a written sale agreement with detailed clauses to guide the transaction. According to Section 39 of the Land Act, sellers can invoke their right to cancel the written agreement over breach of contract by the purchaser. The seller can either resume possession of the property on mutual agreement or obtain a court order before moving in. Before regaining possession, the seller must give a notice informing the purchaser of the nature and extent of the breach.

The seller also has the option of seeking financial compensation for default as stipulated in the sale agreement. However, there are legal requirements that must have been fulfilled before the seller reclaims the property. For instance, the sale agreement must not only have been in writing but signed by both parties and the signatures attested to by a witness who was present during the signing. There are also some clauses in the agreements stipulating that the seller can repossesses the property and not refund the money earlier paid as deposit/down payment – especially if there is a forfeiture clause. Majority of forfeiture clauses in property sale agreements stipulate that the purchaser lose the money paid as deposit if they default in payment.Several prospective investors have lost fortunes over failure to abide by written contracts over various reasons. For instance, most sellers of property require that buyer pays a deposit of at least 10 per cent of the purchase price and the balance settled in installments within 90 days. Traditionally, most courts abide by the written contracts signed by both parties when property transactions turn sour. A precedent was set in a recent case where South African farmer Stephanus Kruger won a Sh800 million land dispute in Uasin Gishu at the High Court, sitting in Eldoret. According to court records, Kalenjin Investment Trust, EMO paid Kruger Sh112 million deposit for a Sh800 million tract of land in the area. EMO, which has 400 shareholders, moved to court seeking to block Kruger from selling to third parties his controversial 5,000 acres of land and properties in it. The buyers told Lady Justice Philomena Mwilu that Kruger breached the sale agreement after sub dividing the land for sale to third parties after pocketing Sh112 million deposit. The intention of EMO was to stop Kruger from sub dividing and selling parcels LR 21792/3, 2179/4, 9127 and 8522 and movable property within. However, Kruger – in his defence – argued that the contract stipulated that EMO were to pay a deposit of Sh252 million, which they failed. Therefore, Kruger placed an advertisement in a local daily on the sale of the 5,000 acres of land located in Uasin Gishu County which prompted the suit. Furthermore, the sale agreement stipulated that Kruger was at liberty to sell the property after issuing notice in cases of a breach. Lady Justice Philomena Mwilu (currently Deputy Chief Justice) concurred with Kruger that EMO was in breach of a requirement to pay in full either the deposit or purchase price. According to Justice Mwilu, dealings of the two parties after the expiry of the date of payment were outside the sale agreement. The court ruled that it could not be involved to re-write the contract between EMO and Kruger. Consequently, Lady Justice Mwilu found EMO guilty of breach of contract by failing to abide by the clause on payment of deposit or sale price. — The writer is an Advocate of the High Court
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9 Ways to Save Money When Building Your Dream House.

Everybody hopes to build a dream house in their lifetime. Without proper planning and consultation,building a house can be a horrendous experience. There are many factors to consider before and during the process of building your own home. Following the steps below, will help you save money.

1.Plan your budget.

This is the most important factor, it determines the kind of lifestyle you want, the location to buy land, the type of house to build.What size of rooms you want? How much are you willing to spend on building the house? Where will you get the money?How to save money?

Don’t start to build a house that will stall midway,due to lack of proper financial planning.

 2. Your Choice of Land.

Different location have different rules for construction, some are regulated by the local authorities,there is also zoning of areas to serve specific roles e.g industrial zones, residential zones, commercial zones, single dwellings,multi-dwelllings, some have controlled designs(bungalows only or maisonette only).

Type of ground also varies, is it a swampy or black cotton ground?Will you save money because,the ground is naturally able to support the building, or you must do special foundation for it, which definitely may be expensive to build on?

As we covered earlier in this blog on step by step building…its important to keenly scrutinize the land you are buying. There is a lot of fraud in land transactions. Use reputable land experts, to help you check the historical use of the land. Go over the transaction details line by line.

3.Visit homes/Check online for samples.

Many people are not able to visualize size or arrangement of rooms on a paper unless they see one physically. With many new developments coming up everyday, you can visit several homes to get a feel and be able to understand room sizes, window sizes, wall finishes and many more ideas, which can be implemented or modified to suit your life style. Lack of clear vision of size of rooms, can lead to a very big design that can poke holes into your pocket, or very small rooms that are not functional.

4. Seek expert advice.

There are several professionals involve in building a house. Use skilled and experienced consultants who can help you make your dream house to become a reality. This should be done within your budget expectations.

  • Architect: He should be able to visualize your dreams and put them on paper. He should give you both a beautiful house that is functional. It’s always cheaper to make changes on the drawings than to make changes when construction is under way.
  • Structural engineer: He should be skilled and give you drawings that have  been checked and stamped by a registered engineer. The structural safety of the house is paramount. He should be deeply involved in all structural areas, foundation, slab, beams, columns and the roof.
  • Services Engineers: They aid in designs of electrical, plumbing and drainage of the house. They should supervise the electrical, plumbing and drainage work.
  • Quantity Surveyor/Estimators: I can’t stress enough! Before breaking ground make sure you have the estimates for building the house. It should be done in stages, foundation stage, walling above slab, roofing stage etc. You must have the estimates before starting construction. Go through the estimates item by item and understand it completely. With estimates, you will know whether you have a design that fits your budget.

You must appoint one of the consultants, usually the architect to act as your project manager, and to supervise the contractor.

5.Hire The Right Builder.

How should you go about choosing a contractor? Building a house is an expensive venture, so u must choose a contractor who is as committed to realize your dreams as you.

The right contractor should be qualified and experienced in his line of trade. Wrong choice of a builder can cost money and  time, so you better be very careful. Before you hire a contractor, get a  list of reference and ask to see some of the work he  has done. Talk to his previous clients to know his weakness and strengths. Areas to check are honesty, competence, is he wasteful with materials? Can he meet deadlines?

Is he a good communicator, can you communicate easily with him at anytime during the construction period?Your friends or relatives who have built their homes can refer to you the contractors they used.The contractor should be   registered with relevant local authority.

6.Shop and Compare Contractors’ rates.

To save money,don’t settle for the first quote given to you; you should get as many quotes as possible, that way you will be  in good position to negotiate for a fair rate. Some times there may be up to four times difference in rates.NB as you compare the rates remember that the lowest rate may not be the best choice, you may end up with cheap substandard job. You have to balance between reasonable costs and best quality job.

Even for materials do the same. Shop and compare prices of the materials. You may get one hardware charging cement fairly but expensive in steel reinforcements.

 7.Secure your agreement.

In construction industry you have to be very careful. At every stage there is risk of loosing money to unscrupulous people posing as experts, builders or suppliers. Before hiring a builder or a consultant, please get everything in writing. If it’s the architect designing the house, have a formal agreement, showing exactly what he should produce at the end of the contract and what will be the payment agreed upon.

Never pay everything at once, breakdown the payment in to suitable installments. There has should be a down payment, payment during and after completion of the task. We have seen  many cases of people disappearing after being paid full amount before starting work.

8.Give  Labor only Contract.

Though very hectic and time-consuming, you can save money by sourcing and buying materials on your own and give the contractor labor based contract only. The contractor will still be required to help you decide on the quality and quantity of   materials to buy. The materials should be delivered on time, otherwise, the contractor may have idle workers on site and he may charge you for idle hours. So advance planning is very important. The client has to be ahead of the builder as far as procurement of materials is concerned. When you are buying materials you must consider the points below

  • Check contractor for wastage of materials.
  • You must secure the materials on site both night and day.
  • You must quantify materials delivered to site.

9. Stay focused and organized.

Make sure the construction is going on as outlined in the programme.Have a record of all transactions done since commencement of the project.There should be scheduled weekly or bi-weekly meetings with all consultants and the contractor.Communication between the client, builder and consultants should be open and clear. All instructions should be communicated on time.Team work, cooperation should be encouraged among all the players in the project.You are sure to save money with when you implement the points above.


Two Bed Room House Plan With Costing

Building a house has many challenges, but with proper planning with the right team, it can be fun building and seeing your house coming up stress free. We are going to look at a ready-made house plan with cost estimates for building it.



1 SUB-STRUCTURE. From site clearance up to and including ground floor slab 450,000.00
STAGE TWO Building of the Super-structure walling. 150,000.00
1 Building of ring beam,including concreting 120,000.00
1 ROOFING.Includes,wall plate,trusses,fascia board and roof cover 450,000.00
1 WINDOWS/EXTERNAL DOORS. All made of steel, including glazing. 100,000.00
2 INTERNAL DOOR FRAMES. Sizes 6×2 and 4×2.Include fixing to the wall 20,000.00
  Plumbing pipes, electrical piping and switch boxes. 30,000.00
1 PLASTER. This covers, internal wall, floor screed, external plaster above  
  ring beam and gable wall, plinth and pointed horizontal key. 130,000.00
1 CEILING BRANDERING.Including eaves 60,000.00
2 INTERNAL DOORS. All semi-solid flush door, with brass hinges and union locks 65,000.00
3 WINDOW BOARDS. Mahogany 6 inch by 1 inch 10,000.00
1 TILING.Saj Ceramic floor entire house and wall tiling in washroom and kitchen 180,000.00 
2 KITCHEN CABINETS AND WARDROBES carpentry fit outs. 150,000.00
3 CURTAIN RODS 40,000.00
1 PLUMBING AND ELECTRICAL FITTINGS, sanitary wares,electrical lights  
  Sockets, switches. 60,000.00
1 CEILING BOARD. 9mm Chipboard from timsales and gypsum cornice. 57,000.00
2 PAINTING. One emulsion undercoat and 2 final silk coat to internal room  
  Gloss paint to windows, clear vanish to window board, internal doors  
  architraves,quadrants.External one emulsion coat and two mart coats 80,000.00

The estimation and costing of the house Plan has been based on the specifications below.

  • The house is built on a murrum soil, with a strip foundation depth of 1200mm, 600mm wide; thickness of concrete footing is 150mm. Strip foundation concrete of ratio 1:2:4, with 8mm high yield steel (y 8).
  • 9 inch uncut stones for foundation walling, with a mortar ratio of 1:3.
  • Hardcore filling 300mm thick, murrum blinding and treated with gladiator pesticides.
  • Drainage and electrical pipes are placed in concrete.
  • The ground floor slab is 100mm thick, reinforced with A 65 BRC mesh, on 1000g polythene sheet dump prove membrane.
  • 9 inch by 6 inch machine cut stones for super-structure walling.
  • 300mm by 150mm ring beam, with 10mm and 8mm high steel bars, 1:2:4 concrete ratio mix.
  • Roof cover  galvanized colored  iron sheet  of 30g,with cypress timber truss members  of size 100mm by 50mm (4inch by2inch).Wall plate of same size also, timber purling of size 75mmby50mm    (3inch by 2inch).
  • External windows and door will be steel cased. French window design, with 4mm clear glass, except washroom 3mm thick translucent glass.
  • Use of cypress timber in all carpentry work, except wardrobes and kitchen cabinets.
  • Use ppr pipes for plumbing and heavy gauge PVC pipes for drainage system.
  • Use heavy gauge PVC conduits for electrical piping, electrical cables from authorized dealers like East African cables.
  • Internal plaster on all walls, cement/lime sand mix, and 25mm floor screed cement/sand mix. External finish, pointed key below ring beam, and plaster render above ring beam, walling below and above bay windows and entrance walling and Plinth plaster