Mwenda Thuranira: Kenya’s Real Estate Sector in Crisis as Fraud and Failed Projects Erode Public Trust
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Kenya’s real estate sector is facing a crisis of confidence, with rampant fraud, dishonest dealings, and failed housing projects leaving investors and homebuyers wary. Industry practitioners are now being urged to take responsibility for the sector’s declining credibility and work towards restoring trust.
In a recent opinion piece published in The Standard, Mwenda Thuranira, the CEO of Myspace Properties, raised concerns over the widespread dishonesty in land transactions and the failure of developers to deliver on their promises.
He pointed out that while the sector should be built on trust, greed has taken precedence over service, leading to skepticism among buyers, investors, and the general public. The result has been a slowdown in investments and genuine development, while scams continue to flourish.
Purchasing land in Kenya today, Thuranira argues, has become a risky venture, with buyers spending more time verifying land ownership than focusing on actual purchases and development.
A 2023 report by the Land Development and Governance Institute (LDGI) revealed that 61 per cent of land transactions in the country are entangled in legal disputes, mainly due to double sales and fraudulent land titles.
The crisis is worsened by collusion between land surveyors, Ministry of Lands officials, and unscrupulous brokers, who manipulate records and engage in illegal land sales.
Some cases involve land that exists only on paper being sold to unsuspecting buyers, while others see a single parcel being sold multiple times, leading to lengthy court battles.
With land disputes overwhelming the Judiciary, the Environment and Land Court (ELC) has been left grappling with over 50,000 pending cases as of 2024. This growing backlog is a reflection of the deep-rooted challenges that continue to plague the sector.
Beyond land fraud, real estate developers are also under scrutiny for failing to complete off-plan housing projects, leaving many Kenyans stranded after investing their hard-earned savings. Thuranira cited a 2023 report by the Kenya Property Developers Association, which estimated that over Sh100 billion was lost to failed off-plan projects that year alone.
Many developers either fail to complete projects or disappear entirely, leaving buyers without the homes they paid for.
The collapse of several high-profile housing projects has only worsened public mistrust, making it harder for genuine developers to attract investors.
Thuranira argues that when one developer fails, it damages the reputation of the entire industry, creating a ripple effect that slows down growth and discourages investment.
To address these challenges, he is calling for self-regulation and greater accountability within the sector. He argues that practitioners must take ownership of the crisis rather than relying solely on government intervention.
Among the reforms he proposes is the adoption of stricter verification processes for land transactions, beyond the basic searches currently conducted. He also calls for the establishment of a transparent land registry system to eliminate fraud, as well as the introduction of a standardized land valuation index to curb speculative pricing.
Additionally, Thuranira advocates for the use of escrow accounts to protect buyers’ money until projects reach agreed milestones, ensuring that funds are not misused. He also suggests that regulatory bodies like the Estate Agents Registration Board maintain a public blacklist of fraudulent developers and agents, preventing them from rebranding under new company names to continue defrauding buyers.
He insists that restoring trust in the industry must begin with a commitment to integrity and professionalism. Practitioners must prioritize transparency in transactions, educate buyers on due diligence, and focus on long-term credibility rather than short-term profits. He expresses frustration that a small group of dishonest players, roughly 10 per cent of the industry, is responsible for tarnishing the reputation of the entire sector. However, he remains optimistic that through self-regulation and strict enforcement of ethical standards, the industry can rebuild its credibility and offer buyers and investors the security they deserve.
With a knack for captivating storytelling, Amos Lumbasi has a talent for crafting narratives that resonate with readers. He combines meticulous research with a captivating writing style to create articles that are both informative and enjoyable to read.
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