Bargain-Hunting: 6 Keys To Buying Property Offplan

by | Aug 22, 2018 | Bargain-Hunting Series, Off-Plan Investing Series, Property Market Advisory Series, Real Estate Market Intelligence | 0 comments

For both home buyers and property investors, Buying Property Offplan is a great way to strike a bargain in the real estate market. The acquisition of a home is undoubtedly a momentous achievement for the vast majority, a pinnacle of financial success.

Buying Property Offplan is popular in Kenya, particularly with working-class families, self-employed individuals and business owners whose cashflows are not evenly spread out throughout the year. Because the Buying Property Offplan also provides investors with the opportunity for quick capital gains, it is also a preferred mode of acquisition of investment properties.

Bargain-Hunting: 6 Keys To Buying Property Offplan

It, therefore, follows that understanding off-plan property acquisitions is absolutely essential. In addition, home buyers and property investors alike need to be sufficiently knowledgeable about the market in order to make sound decisions both before and during the construction period.

Because the principal risks posed in Buying Property Offplan relate directly to the capabilities of the property developer, homebuyers and property investors should have some guidelines or criteria that help to assess property developers and determine the viability or opportunity presented by the project(s) before committing funds to the acquisition.

Buying Property Offplan: What Should a Homebuyer of Property Investor Do?

Become savvy. That’s the simplest answer. And if you couldn’t be bothered to, hire someone unbiased to do the work for you. Or, really, don’t get in unless you’re prepared for a world of hurt and crushed dreams.

  1. Get to know the property developer. Intimately.
  2. Get to understand both the benefits and risks of investing off-plan.
  3. Get to understand the process of Buying Property Off-Plan.

Buying Property Offplan: Overview of Property Development Industry in Kenya

The space of real estate development in Kenya, indeed even parts of the world, features a litany of challenges, not least of which are the many bogus and fraudulent players whose sole aim is to defraud buyers and investors alike of their hard-earned money.

Many are not suitably capable or experienced to deliver on the pledges they make, inevitably leaving in their wake disgruntled home buyers. Who can fail to recall the hundreds of millions that were swindled from prospective home buyers under the infamous tenant purchase schemes that were conjured up under the Simple Homes scam? Or the myriad schemes that overpromised on their deliverables but failed to deliver on their promises?  And without fail, new scams will continue to rear their ugly heads every so often. This trend is bound to continue unabated until more regulation and enforcement is introduced.

The systemic issues with Buying Property Offplan in the country are not new. But because they still remain largely unaddressed, home buyers and property investors should undertake their own due diligence and take sufficient precautions to protect their investments. The industry does have mechanisms for self-regulation so Buying Property Offplan is fraught with many risks. However, as I noted in a previous blog, self-initiated efforts at reining-in errant players or bringing sanity to an industry invariably start with the agenda of industrial networking and lobbying, commercialization agendas and perhaps, at best for the consumers, the introduction of industrial benchmarking. The much-touted Kenya Property Developers Association may do better in developing consumer education programs and lobbying for policy frameworks besides benchmarking in the industry. Membership is voluntary meaning that there is no universally applied gold-standard. Disciplinary action may be taken on errant members at best. However, while these measures may improve industrial compliance, there is little that the organization would be able to do in the way of enforcing compliance or indeed even dispute resolution.

#1. Establish the Property Developer’s Performance and Delivery Record

  1. Visit their website online to check the developer’s portfolio, its corporate associates, and affiliates and its history. If you can find online reviews from previous customers not necessarily published on the company’s website, they should give you some insight into its interactions
  2. Talk to any previous clients where possible
  3. Visit any current project sites to see their finished product, observing finishes, work quality and delivery of the complete project to the level of detail proposed at the time of sale.

The most important aspect to mitigating risks of Buying Property Offplan in any property development scheme is undoubtedly the property developer’s ability to deliver on their pledges. Performing a background check on the real estate developer helps you know their track record, past project performance, and delivery rate. Solicit as much information on them as possible – right from their ownership status and directorships, their legal and financial partners to all the teams of professionals that they work with be they architects, realtors, surveyors, building contractors, engineers and so on. The teams of professionals that a property developer puts together, especially for the project you are considering buying into, are critical to measuring the performance and likely outcomes of the project.

You will want to know that the property developer is financially sound as this will affect the delivery of a high-quality project on schedule without the spectre of hidden costs and unforeseen, unplanned costs. If the property developer is not forthcoming on their financial health, is non-responsive to queries on their financial reports, financial partners such as their bankers and so on, you may want to flee the scene. If they have in the past worked under a consortium or joint venture, be sure to make queries into those projects to understand how they were involved and whether they were effective business partners.

Cautionary Note: If you find that price being offered for the scheme you are buying into is significantly lower than the current market values of similar properties in the market at the time you are considering the project, you should investigate why. Dramatically low prices are indicative of possible shady business practices – hidden costs, inferior materials, non-compliance with building code, substandard workmanship. Be keen to get a sense of any information on costs that are not disclosed or overt in the contract between yourself and the property developer.

Avoid developers notorious for either under-delivering on the development pledges they make and are known for a less-than-stellar reputation in the industry. You can do this by soliciting information from their professional interactions and perhaps using your networks to get the unfettered truth from previous home buyers or property investors who’ve had experience dealing with them.

#2. Seek Guidance from Industry Professionals

If you are a home buyer, get yourself a good lawyer to help you understand the nature of contracts and the solid disclosures you will require before signing on the dotted line. On the technical issues around design, find an architect who can help you create a mental picture of just what the property will look like and speak with construction experts to determine whether the property is what you have in mind. Speak to a property valuation expert to help you make an assessment of whether you are paying fair value for the property at the point of adoption into the project so that you can determine the cost-benefit of early adoption.

Work with professionals to determine whether the project you want to buy into is sound on the fundamental aspects. Get to know both the professional and ethical reputation of the property developer and solicit reasonable information on their background and history. While it is preferable to work with an established, well-known property developer, developers who have steadily come up the ranks taking on progressively larger or more prestigious projects but who may not have as wide a portfolio as the more established ones are well worth considering too. Investigate the financial health of the property developer to determine whether you would even want to consider doing business with them otherwise, you may commit and then lose your money.

#3. Get Your Research Right

Glean as much possible information as you can from any public and/or private sources you may have – it will amaze you just how much you can learn even within the public domain! Whereas property investors are more likely to solicit information that will point towards the potential capital gains, yields or property rentals in the area, the accrual of property ownership rights and so on, home buyers, on the other hand, are likely to be keener on the aesthetic details of the specific property (number of bedrooms, style of construction, property layout, property finishing and so on), and the lifestyle features packaged into the off-plan scheme. Property investors will be more interested in the intrinsic qualities of the development’s location (which will determine the market’s appetite for property in the development), the developments around the project (especially infrastructure and institutional developments) that add value to the project and any ongoing trends around the project (population, settlements, etc) and other upcoming features around the project. Whichever the case, you need to be fully aware of the implications of the transaction with the property developer. Demand any and all relevant information on the property.

#4. Understand the Process of Acquiring Property Off-Plan

Before Buying Property Offplan, you should satisfy yourself with all the elements of the off-plan scheme. If you are comfortable and feel that the benefits outweigh the risks and have made the decision to proceed, you would then contact the property developer and request to be provided with a reservation document in which you would indicate the specific unit you are interested in acquiring along with any other information relevant to the acquisition.

The reservation document will likely contain layout and plans for the property from which you can reserve a property. Upon returning the reservation form, the company will then send you a letter of offer.

It is advisable to engage legal counsel to read through the offer before Buying Property Offplan. The letter of offer will usually be prepared by the prospective subscriber’s lawyers with standard clauses substantiating the interest in acquiring the property, notably the price is accepted by the prospective subscriber.

The letter of offer may also take the form of a standard document sent out by the developer to any prospective subscriber and as such it will include the standard terms and conditions under which the offer is made.

The prospective subscriber can at this point decline the offer, or even negotiate and enter into discussion on varied terms as may be agreed to with the property developer. Thereafter, upon returning a signed copy of the letter of offer, the developer will then send to the lawyer of the prospective subscriber, a Sale Agreement under the terms and conditions as stipulated and agreed upon in the letter of offer.

#5. Perform Project Due Diligence

Prospective subscribers need to establish and secure full disclosure of the facts around the project before Buying Property Offplan. This includes physical verification of the site through site visits both prior to any agreement to invest in property within the development as well as throughout the development period. This will keep the home buyer/ investor updated on the status of the project on a regular basis. Keeping tabs on the project is very important because any significant problems are not likely to be reported by the property developer. As a buyer, you want to be able to track the development and exercise of your rights in a timely manner.  Additionally, the prospective subscriber should establish the following facts:

  1. Does the property developer have proper title to the property? It would be important to take note especially, of any charges, liens or encumbrances and whether these were disclosed early. Any follow-up questions arising should also be adequately addressed by the property developer
  2. Comparable Properties: These will help you determine whether you are overpaying for the project and therefore also whether there would be more attractive offerings in the market.
  3. Are the development plans approved? Prospective subscribers should only invest in the project off-plan if all approvals have been passed, including change of user approvals where necessary
  4. Who are the key partners on the project? Their capacities and capabilities should be looked into beforehand to assess whether they can deliver as promised.
  5. What is the property developer’s channel of communication? Who are the key personnel responsible for disseminating information to subscribers? Is there a scheduled, regular plan for updating subscribers about the progress on the development? If this is not planned for right at the outset, there is a strong likelihood that the property developer will not be transparent or accountable during the term of construction
  6. Are project timelines being maintained? Without the pressure to keep up with deliverables as and when they are disclosed to fall due, the project will inevitably fall behind schedule. Keep the property developer accountable!

#6. Make Contingency Plans

If you buy into an off-plan property with a timeline in mind and a delay occurs, you may have a significant problem on your hands because it may require that you finance the potential outcomes of such a delay.

As a home buyer for example, if you were expecting to move from a rented space to your own home purchased off-plan, a delay may require that you continue renting a living space and suffer the inconvenience of paying for a cost that would otherwise have been catered for. As a property investor, for example, if you intended to dispose the property upon its completion and had financed the acquisition(s) with investors’ funds, you may have to renegotiate for time or pay a premium on the capital which may significantly diminish or even wipe out your capital gains.

Even with the best-laid plans and armed with all the possible information you could gather, things may still go awry. Put in place contingency plans that would cover at least six months between which such additional costs may arise owing to delays on the developer’s part.  In addition, you can also counter the losses or inconvenience arising from delays by insisting on clauses that would mitigate their occurrence, for example, clauses that impose special terms or conditions (such as penalties) on the property developer when delays occur.

Conclusion

  • Buyers and property investors should understand that property developers in our market are really in it for what they can make out of it.
  • An investor mindset is critical.
  • Do the work.
  • Watch out for dramatic offers that seem unrealistic based on market conditions.
  • Ask yourself the hard questions and attempt to place yourself in the property developer’s shoes as they pitch to you so that you can see beyond the trappings that may be set before you.
  • Be wary of property developers who have mixed financing models for their different projects; especially where they apply short-term financing models for long-term projects.
  • Get to know and understand the commercial interests around the project and how they interact and would likely affect your investment before you buy into any project!

The market will continue to have unprofessional, unethical practitioners. However, there are still good apples even among the bad! Press forward and don’t let the potential for failure deter you from seeking your fortunes or dreams. Exercise prudent, thoughtful action and remember, fortune favours the bold!

The Risks and Benefits to Buying Property Off-Plan

by | Aug 15, 2018 | Off-Plan Investing Series, Property Market Advisory Series, Real Estate Market Intelligence | 0 comments

Buying Property Off-Plan allows home buyers and property investors to acquire property before the development is commenced. The property developer might be able to demonstrate access to vacant land on which the property will be built and has proposed architectural plans for the development. In addition, the property developer may also have approved development plans and built partnerships (consortium) towards executing the property development. The project is moot at the time the off-plan scheme is created – merely a conceptual or theoretical plan.

Risks and Benefits to Buying Property Off-Plan

In effect, subscribers to these schemes become the original or initial financiers of a project that needs to demonstrate its “bankability” in order for it to take off.

Depending on the size of the project and the capacity of the property developer, the initial off-plan sales allow the developer to demonstrate sufficient appetite (viability) for further open market sales and also demonstrate the bankability of the project. This, in turn, allows the developer to source any additional financing requirements to execute the project.

In the vast majority of instances, the full disclosure of all commercial interests in the project, or their actual nature, are rarely disclosed to prospective buyers. And therein lies one of the issues ailing the market for off-plan housing in Kenya.

Buying Property Off-Plan: Profitability is Key

Of course, while much of the off-plan scheme will have been developed with the market in mind, the other obvious determinant in developing the off-plan scheme will be its profitability to the developer. Developers are, after all, in the real estate business for the profits they can generate from the business and maximize the wealth of their shareholders/owners.

The uptake of the scheme will be determined by how well the developer has thought through it from conceptualization to implementation; and ultimately, how healthy the appetite is for the scheme proposed. To spur interest in their offering, developers will naturally engage in an intense marketing effort to sell the property, especially because the property is nonexistent and any potential subscribers to the scheme will likely have to be wooed without any physical, visual structures in place. This is where the plot is either won or lost.

Buying Property Off-Plan: Why Buy Into Something That Doesn’t Exist?

For the most part, because it meets a need or expectation that you have and ultimately because you believe (or are convinced?) that once it comes into existence, that need or expectation shall be met. The savviest of property developers will be able to titillate you into visualizing the experience of meeting that need or expectation. They will know just what to say to entice you into buying in and they achieve this through powerful visuals and a package of benefits you may find irresistible including:

  • Concessional prices for early adopters: The key benefit to buying off-plan property is the presumably low price. I say presumably because it is arguable considering that the developer offers lower-than-average prices based on current market values and not necessarily on the total cost of construction with a markup (the two values may be as distinct as chalk and cheese!). Nonetheless, it’s still a deal! At the offer price, a buyer can potentially shave off up to 35% off the value of a property when construction is complete. The savvy investor uses this concession in price along with a combination of other investment strategies to make massive profits on off-plan schemes, making them one of the most lucrative investment tools for real estate investors.
  • Myriad delightful features of the development: To attract especially home buyers, off-plan developments  come packaged with lifestyle goodies include sports, entertainment, shopping, health and fitness facilities  (gyms, swimming pools, clubhouses and so on), additional (non-standard) security features, special memberships and as many more as the developers creativity can accommodate.
  • Customized Touches: As a buyer/investor under an off-plan scheme, the developer will provide the option of small customized finishes, nuanced touches that will give homeowners an added layer of pride in owning the property. Because structural and design changes may have a significant bearing on the cost of construction, developers usually include this as a time-limited offer.
  • Attractive, flexible terms and payment plans including an early right to ownership privileges which real estate investors can apply to make profits from the off-plan schemes even before the development is completed.
  • A host of other generous inclusions including exclusive club memberships as well as discounted travel, home insurance, furnishing offers and so on.

Buying Property Off-Plan: Benefits of  Off-Plan Schemes.

Additionally, property investors who get in early are able to negotiate higher discounts, particularly where they are able to leverage the terms of the off-plan scheme so that they are able to reserve several units with deposits that are just sufficient to tide them over into the rights of ownership.

At the time of the launch when developers are seeking early adopters, the savvy investor can also negotiate for the right to sell the property at any time during construction having paid just the agreed deposit or some other agreed percentage of the price. This allows the cash-rich, savvy investor to strategically position themselves in the development and to clear strong capital gains even before the project is completed as the prices of unsold inventory keep going up.

For individuals who are self-employed or are business owners, buying off-plan makes financial sense because it allows for a “finance-free” option to beat mortgage lenders in the acquisition of the property. It allows this cadre of individuals the opportunity to acquire property by paying a deposit out of their savings and gradually pay off the balance through periodic lump sums.

Buying Property Off-Plan: Risks Associated With Off-Plan Schemes

Any astute property investor will tell you that, done right, buying property off-plan is a great investment strategy that can yield very high returns. They will also tell you that any investment that offers high returns also carries with it significant risk and as such should be well-analyzed before being entered into. Risks may be attributable to the property developer, market occurrences or even fundamental internal risks with the scheme itself. For both home buyers and property investors, the most common of these are:

  • Project delivery delays. A good way to mitigate this risk is to check with the property developer whether they have any financing options in place prior to commencing the project.
  • The delivered property falls below expectations. Usually as a result of structural defects or failures and invariably as a result of non-compliance with building codes or, simply, that they do not meet with the preferences and tastes of the buyer.
  • Complete failure of the project due to reasons outside of the control of the property developer, usually legal, political, environmental reasons.

For property investors, purchasing off-plan in a market with a high saturation of specific types of properties, especially commercial spaces, there will be exposure to significant market risks as the property may not be suited to the market and this may, in turn, lower returns on investments.

Arguably, in Kenya today, for instance, there are a high number of new office spaces that experience low occupancy rates owing to the unsustainable rental charges they command. This is uncommon where indicative property surveys have been properly conducted prior to the conception of the off-plan scheme and also because property values generally tend to increase even before the completion of the project.

Buying Property Off-Plan: Disclosure, Understanding Off-Plan Property Acquisition

Savvy property developers not only understand their proposition keenly but will also have a very intimate understanding of the market and of their potential subscribers. Often, they will limit disclosure while simultaneously embellishing their offering. Based entirely on the nature of the questions posed by prospective subscribers, a property developer can easily determine the elements of the project to underplay and those to sensationalize in order to elicit a sale.

They will understand how to navigate the conversations with prospective subscribers and will have anticipated questions from home buyers and investors well in advance as well as their responses. They will be able to distinguish between enquiries by prospective home buyers and those by property investors, and therefore how to manage each prospect with the aim of making a sale.

Knowing what you want to hear is great. Knowing what you need to hear may be even more important. By asking the relevant questions, demanding written disclosure and most importantly taking the time to understand off-plan acquisitions, home buyers and property investors can make informed decisions and determine if the off-plan scheme is a good fit for them. Possession of full and accurate information enhances the experience for both parties and ensures that both the developer and the buyer/investor are satisfied with the transaction.

Get The Six Keys To Buying Property Off-Plan

Buying Property Off-Plan: Get Advice to Manage Risk

Whether you are a home buyer or a prospective investor who cannot seem to arrive at a fair assessment of the off-plan scheme under consideration, it would be sound advice to always solicit the assistance of independent professionals to guide your decision making and screen out any potential false marketing.

Property developers will often create a rosy, blissful picture to obfuscate any shortcomings in their off-plan schemes in order to get your buy-in. Consider your decision outside of the emotional high that owning your dream would give you and instead focus on getting satisfactory answers to the hard questions.

Get all the information you require to make clear, incisive decisions. Often that information won’t necessarily be in plain sight. Or in plain language either. Hence the term “fine print”. Don’t be fooled though, it’s often a deliberate ploy. Get knowledgeable about the property development industry to understand the strategies they use to sell to you so that you can separate the wheat from the chaff and strike a good deal for yourself.

Buying Property Off-Plan: Conclusion

  • Off-plan schemes are a great way to acquire property. Only if they are executed well.
  • Developers are in the real estate business to make a profit. If in the process they offer you some convenience or financial benefit, understand that it is still motivated by the developer’s goal – to make a profit.
  • As a rule, if you plan to put down money into a real estate purchase, exercise diligence unwaveringly.
  • If you opt to acquire property through an off-plan scheme, understand that you are financing the development of property at zero cost to the property developer. This is why he will love you. In spite of the fact that you are not a bank to levy high fees and onerous conditions, you should drive as hard a bargain as you can and negotiate your way to the best deal possible on the acquisition.
  • Take your emotion out of the decision! We all love a bargain but look before you leap. Or at least get help to figure it out!
  • Aggressively Research the Market, get to know the developer intimately and understand the potential risks of the decision you need to make.
  • Read the Fine Print: Inform yourself on all the finer details of the off-plan scheme, in particular on your rights in the eventuality that project risks mature. This is particularly important when the project experiences failure.
  • Seek the assistance of professionals and people in your networks, who have had prior experience with off-plan schemes and, even better, with the developer you intend to work with, should be solicited. Nobody has absolute or perfect knowledge of all market conditions. But experts can help you make informed decisions, or steer you away from really bad ones!

Why Off‑Plan Schemes Still Reign Supreme in Kenya’s Property Market

by | Aug 8, 2018 | Off-Plan Investing Series, Property Market Advisory Series, Real Estate Market Intelligence | 0 comments

  • Understanding Off-Plan Schemes: A Path to Homeownership

  • Why Off-Plan Schemes Are Popular with Property Developers

  • A Deeper Look: Do Buyers Truly Benefit from Off-Plan Schemes?

  • The Appeal of Off-Plan Schemes for Homebuyers and Investors

  • My Take: Why the Risks of Off-Plan Schemes Often Outweigh the Benefits for Retail Buyers

  • Unpopular Opinion: Off-Plan Schemes? Go with the Chinese

  • Navigating the Risks: What Buyers Should Know

  • Final Thoughts: Can Off-Plan Schemes Still Be Trusted?

Off-plan Schemes: A Developer’s Favourite Tune

Off-plan schemes are to property developers what music is to the soul! If you put any number of developers in a room to discuss off-plan real estate schemes, the consensus will be that they are the next best thing to sliced bread. And homebuyers and property investors are bound to concur.

Understanding Off-plan Schemes

Off-plan schemes are typically arrangements in which a property buyer or investor contracts a developer for the acquisition of a property that has yet to be constructed.

The buyer begins payment before and during construction, with the expectation that by the time construction is completed, the full purchase price will have been settled.

These schemes are often used for residential or commercial developments—estates, gated communities, or apartment blocks—where the properties are sold in phases.

Early adopters are rewarded with lower prices than later buyers, essentially receiving a discount for taking on the perceived higher risk of investing in a conceptual project.

The Risks and Benefits to Buying Property Off-Plan

Why Developers Love Off-plan Schemes

For developers, off-plan schemes are more than just a financing method—they’re a strategic play. They enable developers to demonstrate market interest to financiers and use buyer deposits to prove the project’s viability.

With enough buyers on board early, the project becomes “bankable.”

Executed well, an off-plan acquisition can yield immediate equity for the buyer on handover, higher than if the buyer had purchased at completion. But the success hinges entirely on the developer’s ability to deliver both quality and timeliness.

The Hidden Risks in Off-plan Schemes

While the upside appears enticing, buyers need to understand that off-plan schemes are essentially just unregulated financial tools that give developers access to cost-free, risk-free capital.

  • Unregulated: Developers aren’t required to float conventional financial instruments or comply with oversight that other capital-raising sectors are required to meet.

  • Cost-free: Deposits made by buyers are interest-free and the “discounts” are defined by the developer—not the market. When the project experiences an overrun on delivery, for example, the homebuyer will still have to finance their accommodation elsewhere.

  • Risk-free (to the developer): All financial risk rests with the buyer or lender, giving developers maximum upside with minimal exposure.

While developers argue that buyers earn their reward through discounts and equity, it is more accurate to say that the buyer is rewarded by the market, not the developer. The market acknowledges the buyer’s risk with capital gains, not the developer’s goodwill.

So, Why are Off-plan Schemes so Popular with Buyers

Off-plan schemes are also incredibly appealing to homebuyers and small-scale investors, especially those in the informal sector who struggle to qualify for mortgages. Compared to mortgage financing, off-plan schemes offer:

  • Flexible payment terms (bulk payments over time)

  • Easier access for self-employed individuals

  • Lower entry prices for early adopters

The alternative—mortgages—remains a complex, mistrusted option, plagued by high interest rates and tedious approval processes.

For many, off-plan is simply the more achievable route to homeownership.

My Take: Who Really Benefits?

Where the Real Power Lies

Despite their popularity, the reality is that retail buyers often shoulder the greatest risk in off-plan schemes. While these schemes appear inclusive, the true benefits accrue to wholesale buyers—institutional investors or high-net-worth individuals—who can negotiate for:

  • Better pricing (due to volume discounts)

  • Customised payment terms

  • Influence over project timelines and design elements

These buyers possess leverage. Retail buyers, by contrast, sign standardised contracts with limited negotiation room and little recourse if things go wrong.

In my view, developers benefit the most, followed by bulk buyers. Retail buyers are often enticed by the dream of early equity but bear the brunt of execution risk.

    Unpopular Opinion: Go With the Chinese

    This may be a controversial opinion, but I must confess a bias towards non-indigenous developers, particularly Chinese firms.

    On average, these developers have demonstrated exceptional project management discipline. In my observation, they tend to:

    • Deliver within the promised timeline
    • Offer more flexible terms with the ability to customize payment plans
    • Stay within budget
    • Maintain better structural and architectural standards

    I am in no way suggesting that all local developers are incapable or that all Chinese firms are perfect. But my observation is that these firms have “cracked a nut” and are far more reliable for the enterprise of off-plan schemes, with a history of timely completions in comparisson to local firms.

    Read into this what you will.

    That said, buyers must always conduct their due diligence, irrespective of the developer’s origin.

    Conclusion: Proceed with Caution, Not Fear

    Despite their flaws, off-plan schemes are here to stay. They fill a vital gap in Kenya’s property market, especially for buyers locked out of traditional financing. But they require caution.

    Before entering into any off-plan agreement:

    • Research the developer’s track record
    • Consult professionals (lawyers, architects, quantity surveyors)
    • Cross-check the reputation of the developer from their professional associations and the reputations of their leadership, in particular any past directorships in other property development firms.

    Regulation needs to catch up with the realities of off-plan financing. Until then, buyers must bear the burden of risk. But with insight and prudence, off-plan schemes can still be a viable path to homeownership, just not one to be walked blindly.

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