BY SAM ALFAN
Buying land in Kiambu without proper documentation has landed 14 land buyers into a deep pit.
This after the buyers found out that the land sold to them by Suraya Developers had secured a loan of over Sh100 million with Transnational Bank.
The Bank advertised the land for sale prompting the 14 who had bought the land to seek a court injunction claiming that the land is theirs.
However, lack was not on their side as the court rejected their plea and gave Transnational Bank a go ahead to sell that land to recover its loan money.
Justice David Majanja dismissed the application by the 14 investors saying they failed to provide sale agreements between them and the developer- Suraya property Group, to help the court determine the nature of the proprietary interests in the property.
The Judge further said the bank had charged the property and its interest supersedes any other interest including the rights of the investors.
“In the absence of these agreements, which form the basis of the contractual relationship, I cannot say the Plaintiffs have established a prima facie case with a probability of success in relation to the registered interest of Transnational Bank,” the Judge said.
The 14 investors rushed to court after the bank advertised for sale the property measuring 0.913 acres on Kiambu Road, near Northern by-pass. They had entered a deal with Muga Developers and Suraya for purchase of apartments.
The developer intended to build a multi-storeyed block of apartments including 84 two-bedroomed and 68 three-bedroomed apartments. The construction also included two basement parking spaces.
The investors sought to stop the bank from selling the property to recover a loan of Sh111 million. They also wanted the bank to provide them with reconciled accounts relating to the development, which was known as Classix at Fourways ltd.
The investors said they have a beneficial interest in the property after entering into off plan purchase agreements for the apartments with one ordinary share in the management company of the Development.
The court heard that in order to raise more capital to develop the property, Classix obtained funding from Transnational Bank and charged property but failed to service the loan, which forced the lender to auction the land.
The investors alleged that Susan and Peter Muraya through their associated companies, contrived a scheme to induce them to enter into agreements to purchase units in the development which they never intended to develop.
They further accused them of diverting money for other purposes other than for the development contrary to the agreements they entered into with and other investors. They also accused the lender of being reckless for disbursing the money without documents to back the intended development.
The Bank opposed the application stating that Classix was indebted to it and that it commenced the process of exercising its statutory power of sale by issuing a 90-day notice on May 14 as required by law.
The lender further said it was not privy to the alleged contractual relationship between the investors and Muga Developers, Suraya and its companies.
