Former Kiambu governor Ferdinand Waititu has lost Sh52 million deposit he paid to acquire an office block in Nairobi’s CBD after he failed to complete purchase of the half-a-billion shilling property.
Justice Jacquline Mogeni found Mr Waititu was in breach of the sale agreement as she dismissed his claim that the property seller had defrauded him by misrepresenting the true income of the commercial building.
Mr Waititu had paid the money to General Properties Ltd as a deposit to buy an office block in Nairobi’s city centre three years ago, but financial lenders failed to offer him loan to pay the balance.
The money constituted 10 per cent of the purchase for the property known as Solar House and he was transacting using his company, Saika Two Estate Developers Ltd, where he is a director.
Saika later came under the scrutiny of the anti-graft watchdog over allegations that Mr Waititu was using it to receive kickbacks from county government contractors.
In the sale agreement dated May 30, 2018, he was to buy the property for Sh520 million but was unable to pay the balance of Sh468 million even after he was given more time to do so.
The delay prompted the seller to sue the former governor seeking to be allowed to forfeit the deposited money as damages for breach of contract and terminate the sale agreement.
Through lawyer Anthony Wanyingi, the seller argued that Saika breached the contract by entering into a sale agreement without sufficient funds to complete the transaction.
Mr Wanyingi further informed the court that the sale agreement was approved by Mr Waititu’s lawyers, who also advised him to execute it. He was to pay the balance within 90 days.
“Saika proceeded to execute the sale agreement and paid the deposit without first securing bank financing. It is the duty of every advocate for the purchaser to advise his client to source for funds first before committing himself in an agreement,” said Mr Wanyingi.
While ruling in favour of the property seller and allowing forfeiture of the deposited money, Justice Mogeni also ordered the Land Registrar Nairobi to remove a restriction placed by Mr Waititu’s company against the property.
Mr Waititu’s company did not appear in court to defend or justify their action of lodging a caveat against the property.
“A person who lodges caution over any property is one who claims right whether contractual or otherwise. Saika has not raised any objection on why the caveat should not be removed. The court finds that there is no basis for continuing to have the caveat lodged against the said title,” said Justice Mogeni.
She also found there was no valid reason to deny the property seller the Sh52 million since the sale agreement between the parties provided the same.
Total monthly rent of the building as at year 2021 was said to be Sh15.8 million. In its defence, Saika stated that the information on the property’s income was presented in an unambiguous tabulation.
The company approached Family Bank looking for a loan facility in order to pay the balance of the purchase price but the applications “were unusually rejected by the financial institution”.
It continued pursuing credit and it approached Cooperative Bank. After conducting due diligence and analyzing the representations of the property vis-a-viz rent schedules and the tenants agreements, the bank discovered rental represented was “false and grossly exaggerated”.
The Cooperative bank immediately abandoned the process of processing the credit facility.
