Hundreds of investors have lost money to dubious housing project that failed to take off due to irregularities
More Rwandans are losing money in real estate property deals due to failure of government agencies to conduct due diligence on prospective investors and minimal supervision of commercial deals.
While the Rwanda Development Board (RDB) which has oversight role over investment and business in the country has made it easy to register a company, concern is rising over dubious investment deals as more people lose money.
Some of the problems were linked to financial issues, a section of the real estate developers in some of the projects were blamed for being non-transparent and dishonest when it comes to deals with third parties.
In addition, the country now has many ‘briefcase’ investors who engage in illegal commercial transactions.
The on-going dispute over an estate project in which a diaspora group claims to be defrauded funds has reignited unresolved controversies over several housing projects in Kigali in which buyers continue to struggle to recover deposits.
For instance, the 242-member diaspora group dubbed Rwanda Community Arusha-Moshi claim they contributed Rwf4.9 million each inclusive of Rwf4.8 million for land acquisition in addition to membership fees, land transfer and communication fees to enable Inzozi Hills Estate project to take off in Kigali Suburb of Nyamirambo.
However, as per the complaint lodged with Rwanda Investigation Bureau (RIB), they allege fraud in the way the funds for the project, then overseen by one Daniel Murenzi, head of the Rwanda Diaspora Global Network, were managed. RIB recently confirmed to Rwanda Today to be investigating Daniel Murenzi after receiving the complaint.
“The suspect was summoned and interrogated. RIB has since commissioned an audit, and its findings will determine the way forward," acting spokesperson Thierry Murangira told Rwanda Today.
The case has, however, triggered pains of many Rwandans who have spent years pursuing justice to recover their money contributed towards ownership of homes in similar estate projects that ended in complete failure or faced difficulties.
The cases have dragged on for years as attempts by tenants to recover the deposits are flouted by unending court cases, most opposing lenders and developers over auctions or liquidation.
In one case involving the defunct DN International which built an estate in Masaka, about 100 people, largely those who had made upfront payments to the developer and the suppliers, are yet to get anything since controversy rose in 2011.
They all stood to lose after Kenya Commercial Bank (KCB) sought to auction the property to recover its funds and interests, leaving all the other creditors empty handed.
It’s until last year that the commercial high court overturned the auction, thereby allowing all the creditors to be paid in the ongoing process to liquidate the company.
“The valuation report was done. Initially we had six months within which to complete the process and pay all the creditors without discrimination. But the process was hampered by the lockdown as we were unable to hold regular meetings with the committee of creditors as well as interacting with potential clients,” Vedaste Mugemanyi, the property liquidator told Rwanda Today.
In a separate case, attempts by prospective homeowners to recover upfront payment made for the homes in Ujenge Palm Estates in Kinyinya had not borne fruits years later as the developer battled with the lender over outstanding debt. Other housing schemes in Kigali such as the Rugarama Park Estate in Nyamirambo have not been spared yet as they face delays.