A local bank has reportedly put up for sale 100 acres of land belonging to Urithi Housing Co-operative Society.
The parcel of land named Panorama Gardens has been put up for auction after the society defaulted a loan, Daily Nation reports.
Urithi acquired the property located in Gatanga in 2016 at a cost of Sh1.5 billion but paid the owner a down payment of Sh1 billion. The balance of Sh500 million was to be paid in five years’ time.
The society further took over the loan liabilities of the then owner, who had failed to service his bank loans.
The lender has reportedly appointed Nairobi-based Antique Auctions Agencies to oversee the sale of the land and has served Urithi with a 45-day redemption notice to offset a debt of Sh263 million.
Plots at Panorama Gardens were sold to investors at Sh2.25 million each after being marketed as ready for immediate development. The project attracted 400 investors.
Most of the investors said they have been unable to develop since they were not issued with title deeds.
Urithi Chairman Samuel Maina said the society is engaging the lender to sort out the matter.
“I have seen the notice, but we are engaging both parties and we hope to settle the matter as soon as possible. One of our biggest challenges to offset this debt is coming from some members who subscribed to this project we marketed as Panorama Gardens and made a down payment but have never cleared the balance,’’ said Maina.
“Out of the 400 investors who bought plots at Panorama Gardens, nearly 70 percent have cleared their balances. We are currently reaching out to the members who owe us some money to clear their balances so that we can conclude documentation and issue title deeds to the members."
In another Urithi project dubbed Tola 3 and Tola 4 behind Mangu High School, buyers said they were kicked out by the original landowners, who claimed that the society had failed to clear the balance.
Urithi Housing Co-operative was established in 2012 and currently has 8,000 members.