Revealed: How Kenya Plans to Fight Real Estate Fraudsters

A new tough law is on the cards as Kenya’s real estate stakeholders seek to bring to an end the days of unscrupulous property agents and land brokers in the country.

The Estate Agents (Amendment) Bill,  currently at the Attorney-General’s office, proposes tough measures to regulate real estate agents so that they can conduct themselves professionally.

The Bill also aims to boost public confidence in the operations of real estate agency work amid rising cases of cheats defrauding people.

The draft law seeks to toughen the Estates Agent Act that stipulates who should practice estate agency. It states that no individual shall work as an estate agent unless they are registered by the Estate Agents Registration Board (EARB).

This law has been grossly violated considering that, out of the 40,000 agents operating in the country, only a paltry 402 individuals hold valid licenses to run real estate agencies.

The Estate Agents (Amendment) Bill suggests that “no person shall be entitled to receive commission, fee, payment, reward for a service provided if the person is not licensed under this Act when the service was provided.”

It further proposes that “no person shall practice under any name, title, or style containing any of the words of phrases, ‘estate agent’, ‘land broker’, ‘realtor’, ‘real estate agent’, ‘letting agent’ ‘property manager’, ‘leasing agent’, ‘land agent’, ‘housing agent’ without a valid license.

The law defines a real estate agent as “a person who deals in the selling, mortgaging, charging, letting and management of immovable property or shares in immovable property of any land, house, shop, or other buildings.”

If the Bill sails through, anyone seeking to be licensed as a real estate broker must be a holder of a KCSE certificate or its equivalent and a holder of a post-secondary certificate in a Real Estate Agency or a certificate in a related field approved by EARB.

The applicant must also have at least one year of experience in a real estate agency working under a registered real estate agent. He or she must be a member of a professional body recognised by the board and must meet the requirements of chapter six of the Constitution.

Applicants only need to satisfy the board that they are Kenyans of good character.

EARB says on its website that: “It is illegal to engage or procure the services of unregistered persons as it is punishable by law” – a fact that is often taken for granted by many Kenyans.

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Individuals caught practicing real estate agencies illegally will face up to Sh1 million in penalties, up from the current Sh20,000 fine. Besides, an agent will not receive payment for service rendered if they are not registered and licensed by the board to operate.

According to EARB chairperson Nelly Mbugua, the review of the Act seeks to stem the exploitation of the public by unscrupulous agents as is currently the norm.

“The amendments are targeted at streamlining the industry by ensuring that real estate products are sold by professionals,” Ms Mbugua said on Tuesday.

James Muratha, a real estate professional, says the proposed law, once passed, can help unlock the industry’s immense potential.

“[The law will] enhance professionalism so that consumers can get the services they deserve, and that they are not cheated out of their hard-earned money,” Mr Muratha says.

“This will encourage more investors to put their money in real estate as an investment class.”

In early 2015, the then-acting Minister for Land, Housing, and Urban Development, Fred Matiang’i, announced imminent enforcement of the Act.

All real estate agents were to undergo online vetting and registration by the EARB starting in September of that year to streamline the sector.

However, nearly four years down the line, Dr Matiangi’s directive is yet to be effected and Kenyans continue to suffer at the hands of industry fraudsters.

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