Controversy Surrounds Real Estate Regulation Bill: EARB Voices Opposition
The real estate landscape in Kenya is currently in the midst of a legislative storm as the Estate Agents Registration Board (EARB) vehemently opposes the recently introduced Real Estate Regulation Bill, 2023. Sponsored by Trans Nzoia Senator Allan Chesang, the bill, gazetted on September 11, 2023, aims to regulate real estate agents, developers, and land buying companies in a bid to curb fraudulent practices within the sector.
At the heart of the controversy is the question of whether additional regulation is necessary, particularly for real estate agents. According to EARB Chairperson Eunice Macharia, real estate agents are already subject to regulation under the existing Estate Agents Act Cap 533. This prompts the board to argue for a redraft of the bill, focusing solely on the regulation of land buying companies and property developers.
Ms. Macharia, in a recent press conference in Nairobi, emphasized the unique nature of real estate agents as professionals. She argued that they require distinct specializations involving training, practice, and competence. Highlighting the multifaceted role of real estate agents, she noted that universities in Kenya produce over 300 real estate graduates annually, and the profession extends beyond brokerage. Areas such as property and facilities management, retail management, and feasibility studies are integral components of the real estate profession that go beyond simple brokerage activities.
The bill’s narrow definition of estate agents as individuals facilitating the sale or let of real estate projects is deemed insufficient by EARB. The board contends that this definition ignores the broader context of the real estate profession, which encompasses various disciplines. The proposed legislation seems to overlook the complexity of the sector, reducing it to a singular focus on brokerage activities.
Moreover, EARB has expressed concern about the lack of consultation with professional bodies before the introduction of the bill. Jesse Kihoro, a board member, urged legislators to engage with industry professionals before drafting such legislation. He stressed the importance of seeking input from those who understand the intricacies of the real estate subsector to avoid confusion and ensure effective policymaking.
The controversy also extends to the composition of the board that will oversee the regulation and registration of estate agents, as outlined in the bill. EARB raised concerns about the lack of specification regarding the professional qualifications required for board members. While the bill mentions representation from the National Treasury, it does not clarify whether this member should be a real estate professional or not. EARB suggests that, traditionally, professional boards are composed mainly of experts in the specific area of specialization.
To address these concerns and foster a comprehensive understanding of the issues at hand, EARB has announced plans to hold a one-day conference in the coming week. This conference will serve as a platform to discuss the Real Estate Regulation Bill and other significant issues affecting the real estate sector. The aim is to engage stakeholders, share insights, and collaboratively navigate the challenges facing the industry.
In addition to opposing the bill, EARB highlighted its ongoing efforts to amend the existing Estate Agents Act Cap 533 in collaboration with the Ministry of Lands, Physical Planning, and Urban Development. The amendments include the categorization of real estate agents, ensuring that regulatory frameworks align with the evolving nature of the real estate profession.
As the real estate sector navigates this legislative crossroads, the conference provides an opportunity for dialogue, clarification, and collaboration. It underscores the importance of involving industry professionals in the policymaking process to ensure effective, well-informed regulation that promotes the growth and integrity of the real estate sector in Kenya.