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Mahiga Homes, Another Off Plan Scam

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An aerial view of one of the unfinished homes by Mahiga. Photo Courtesy.

Over the last 10 years, off plan development projects have been the route to home ownership for low income earners in most parts of Nairobi and its outskirts.

But in recent times, it has turned into a bitter cocktail, with Kenyans sinking millions of shillings to buy houses that are a far cry from the dream units seen in photos.

Some home developers go out of business, designs fail to match the market hype, while fittings and finishes may turn out to be cheap, leaving the home buyer staring at huge losses besides having to live in a house that does not fulfil their dreams.

EARLY OCCUPANTS

At times, early occupants find themselves living on a building site with construction clatter, ruining the much-needed serene environment, besides health hazards of dust.

A sneak preview of some of the off-plan developments in Nairobi by some developers reveals the shock that most home-buyers who opt for the plan risk plunging into. At exit-14 along the Thika superhighway, near Juja, a 10-kilometre drive along Kenyatta Road leads to Kimuyu and Cornerstone houses.

Residential units by a local real estate firm are a pale shadow of what was promised to home-buyers and lack of electricity for almost a month has added to the woes of the families.

On getting closer, a rumbling generator — the sole source of power and lighting at the development — disturbs the otherwise dead and dull estate.

“We’re living here in darkness and the management isn’t even having the courtesy to remedy the situation,” said one resident who was among the first inhabitants, but did not wish to named.

“Some of us have even bought our own generators because as you can see, we are on our own,” another disgruntled owner told us.

CRACKED WALLS

“These are not homes! We have houses that have cracked walls and falling ceilings,” said the resident. “Mahiga homes only gave us fake stories and dumped us here in Kimunyu,” the seething owner adds.

Calls to Mahiga Homes in efforts to see the projects as potential buyers were not successful. The firm told us that all they could offer are photos and that all their completed houses are fully occupied.

A detailed check around the residence, however, shows that the sewerage line is yet to be completed with some houses with flushing units not working posing health hazards to the families.

“You can’t, it but we’ve been here for over a year, but the developer doesn’t care. All we receive are empty promises,” a young couple that also sought anonymity said.

The residents, who are on their own, after sinking millions into the project, are now using a make-shift bio-digester.

Scam promo.

HOME OWNERS

Home-owners bought the units for about Sh3.5 million but what they are grappling with are small houses, cramped together— a far cry from the dream house they were promised.

A spot check of the Acacia 1 project tells a totally different story with works barely half-way done and the 15 houses are all abandoned.

The houses were retailing at around Sh3.95 million, but site visits show how investors were duped into a raw deal to sink millions of shillings.

A closer look at the architectural designs reveals a stark contrast to layout and the size of the houses.

We checked through seven houses and all of them had different interiors, pointing to poor quality of the houses that forced investors to fit interiors afresh.

Peter Nyaga, Mahiga Homes, CEO.

The Directors behind Mahiga Homes Patrick Muchoki Joseph Ruhiu and Gladys Chania, this Blog has learnt were at once Directors at the now defunct Mashariki Developers alongside the owner of Belasi Developments the infamous Martin Mwangi and Andrew Kamau. Once the company went belly up they all went scurrying and formed separate companies, a story for another day… Mahiga has gone all out to prove themselves as the fastest developing company, but hurry hurry has no blessing. their sheer disregard for the national building code, and their underhanded deals have gotten them approvals without any inspection. In some cases entire houses have been built in 2 days, avoiding totally the regulations and hoodwinking their clients by this tremendous speed. However, this has come at great cost to humble Kenyans who are now trapped with near collapsing houses, some as new as 4 months old.

Additional reporting by Daily Nation.
A spot check on Twitter, frustrated clients took it on social media to expose the failed projects on #MahigaHomesUnmasked revealing the poorly done homes.

And it can go over and over. Check out the hashtag for more complaints. The biggest clientele base for such pyramid scheme is the diaspora. Since you’re not on the ground, you’re sold a heaven on earth, bombarded with same photos while nothing is really going on. Urithi Housing is now going down with billions of investors money, nothing much to show. They also targeted the diaspora market just like Mahiga Homes.

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Normally, what fraudsters do is running sponsored articles on mainstream media selling how good they’re. Mahiga CEO Peter Nyaga, paid for an article on Business Daily, it was how he made his first million at 22 years old. The Nation later brought down the article on finding out they were duped. The article can still be found in other blogs who reposted it. Problem with the mainstream media is lack of proper background check and due diligence. They just run with any story they’re told and this how many conmen run to mainstream when they want to dupe the public.

But this not the first time Business Daily was caught pants down selling hogwash. The newspaper was forced to pull down a story about Mwenda Thuranira, the proprietor of MySpace Real Estate Company after it became apparent that the story he sponsored was a fraud.

Mainstream media is largely to blame for poor research and promoting falsehoods and luring unsuspecting Kenyans into the conmen’s traps.

Dangers Of Buying Off Plan Houses-The Standard.

Despite the idea of purchasing a house off-plan being affordability, many house-buying schemes have collapsed with investor monies

The houses are stylish, discounted and very attractive. They especially appeal to the middle class. They are heavily marketed in glossy brochures, websites and media adverts. But underneath all that glamour, a well spin web of conmanship lies.  Despite the idea of purchasing a house off-plan being affordability, many house-buying schemes have collapsed with investor monies leaving thousands misery. Off-plan buying means purchasing a property especially a house before it has been built.

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Last week, real estate firm Mizizi Africa Homes announced that its Sh54 million off-plan housing project, Penguin Estate, was completely sold out three months after it was launched. This clearly showed the popularity of the schemes. Suraya Property Group provides a case study. DCI asked all those conned within and out of the country to record statements so that the case is amalgamated.  Paul Maurice Syagga, who teaches land economics at the University of Nairobi’s Department of Real Estate says that even though off-plan housing is a “novel” idea, its risks are dreadful. Prof Syagga explains that off-plan housing units are often purchased while under construction. “They are usually discounted in price in comparison to a completed unit because the buyers have partly participated in the construction,” he said. He noted that the developer also gains by getting upfront payment without having to borrow expensively. He cited National Housing Corporation as a  relatively successful off-plan housing project in Kenya.

He said that buyers take a risk. That is if the developer doesn’t complete the project on time or doesn’t complete it at all.“The developer may be so ambitious to start a large project with the hope that buyers are forthcoming. The project stall if there are no enough investors,” he said. Syagga warned that it was also possible that developers might be fraudsters operating a pyramid like scheme. they eventually flee people’s money. He also noted that Kenya lacks clear regulations governing off-plan sales.

Additional reporting by Daily Nation & The Standard.


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