Proposed Bill Seeks To Reign In Fraudulent Real Estate Developers
In a bid to curb the rising cases of fraudulent real estate activities, a proposed bill known as the Real Estate Regulation Bill 2023, sponsored by Trans Nzoia Senator Allan Chesang, is set to introduce stringent measures to regulate real estate agents and projects. This comprehensive legislation aims to protect consumers from unscrupulous practices, ensuring transparency and accountability in the real estate industry.
Key Provisions of the Bill:
- Mandatory Registration and Licensing:
- Real estate companies will be required to register with the registrar of real estate and obtain a license from a board of directors under the Act.
- Real estate agents must obtain a practicing license from the Board of Directors and comply with the stipulations of the Act.
- Regulation of Real Estate Projects:
- Real estate agents are prohibited from facilitating the sale or rent of any property in a project that is not registered according to the Act.
- The bill prohibits unfair trade practices, including misrepresenting standards, providing misleading information, and advertising properties not intended for sale.
- Role of the Real Estate Board:
- The Real Estate Board will advise national and county governments on real estate sector regulation and development.
- It will be responsible for registering real estate agents and projects, issuing licenses, and maintaining a public database with relevant information.
- Penalties for Offenses:
- Stiff penalties, including fines up to five million shillings or imprisonment for up to two years, will be imposed on those found guilty of offenses.
Specific Measures to Safeguard Buyers:
- Project Registration Requirements:
- Developers are prohibited from advertising, marketing, or selling any property in a real estate project that is not registered under the Act.
- Each phase of a project must be separately registered if developed in stages.
- Buyer Protections:
- Purchasers are entitled to information about approved plans, layout specifications, and other details specified in the Act.
- Developers must disclose completion schedules, and provisions for water, sanitation, electricity, and other amenities in the sale agreement.
- Online Transparency:
- Developers are obliged to publish advertisements or prospectuses on the online public portal of the Board to ensure accurate representation of their projects.
The Real Estate Regulation Bill 2023 represents a significant step towards creating a more transparent and accountable real estate sector in Kenya. If enacted, it will not only protect consumers but also contribute to the overall growth and credibility of the industry. Homebuyers are urged to stay informed about these developments and exercise due diligence