City Affairs

End of the road as City Hall enforces auctions, caveats for land rate defaulters

A file picture of Nairobi Governor Johnson Sakaja. (Photo: X/Sakaja Johnson)

By Maureen Kinyanjui | Tuesday, June 18, 2024

The action follows the expiration of the second waiver for land rate penalties and interest, which required owners to settle the principal.

City Hall has initiated the recovery of land rate arrears from defaulters, giving the green light for property auctions.

The action follows the expiration of the second waiver for land rate penalties and interest, which required owners to settle the principal.

Keep reading

"The recovery process should be as efficient as possible and be handled by county internal lawyers to avoid incurring huge legal fees that are normally pegged on the value of land in dispute," stated a communiqué from the governor's office.

Early this month, the Nairobi County government published a list of rate defaulters and gave a one-month grace period for them to settle the principal while waiving interest and penalties.

A Cabinet meeting chaired by Governor Johnson Sakaja also authorised caveats on all debt properties to prevent any transactions, including subdivision, amalgamation and transfer.

Urban Planning executive Stephen Mwangj also approved the issuance of agency notice for properties with rental income, with tenants required to pay rent directly to the county pending the clearance of all outstanding rates.

For Nairobi, the six key own-source revenue streams include parking fees, rates, single business permits, house rents, building permits, and billboards and adverts which account for close to 80 per cent of the annual own-source revenue.

Land rates are the top own-source revenue earner in Nairobi, accounting for about 25 per cent of revenue collected by the county government.

As of June 18, 2024, the city had raised Sh3.25 billion in land rates, against a target of Sh7 billion, with two weeks to the end of the financial year.

Earlier this year, Sakaja announced a one-month extension to the penalty waiver on land rates.

Over time, the county government has been providing rent waivers to residents living in county-owned houses. These houses, numbering 17,000, are in neighbourhoods including Maringo, Uhuru, Kaloleni, Jericho, Buruburu, Kariobangi South, Ziwani, and Jerusalem.

Their rent ranges from Sh2,000 to Sh20,000 per month, depending on the location.

According to Section 7 of the Nairobi City County Waiver Administration Act of 2013, any rent waiver granted must be reported to the County Assembly and published in the gazette notice within 14 days of its issuance.

Reports from the county indicate that Nairobi is experiencing a loss in revenue due to residents' failure to pay rates promptly.