EXPLAINED: Why Nairobi Apartment Owners Will Pay Rates Based on Floors

EXPLAINED: Why Nairobi Apartment Owners Will Pay Rates Based on Floors

Nairobi County residents who have leased or purchased apartments from developers will soon be required to pay both value capture and sectional rates. 

This was revealed by County Executive Committee Member (CECM) Charles Kerich in an interview with Spice FM on Monday, May 23. 

According to Kerich, value capture is critical because developers are paying the same rates for apartments as for undeveloped land.

The CECM explained that implementing value capture would ensure fair land rates and expand the county’s revenue base.

“Let us take, for example, you have one acre in Upper Hill; on that one acre stands a tower with 50 stories paying the same as that one acre next door that has nothing,” he explained unfairness in the existing land rates.

Kerich stated that it was imperative that every person in that building pay rates based on the floor they occupied because they were using sewage and water systems.

“You are not going to subdivide this one acre, but you can capture the value of each floor so that every owner of each floor pays rates as well,” he explained. 

Regarding sectional property, Kerich stated that the county was in the process of fully implementing the Sectional Property Act to ensure that the burden of paying land rates in subdivided properties was not borne solely by a few individuals. 

“What happens is if you are on one acre and you have 60 apartments, the rates charged on that land is undeveloped site value, meaning you are charged as if there is nothing on that property,” he explained of the now being phased out system.

“Assuming you have 60 apartments and you need to pay Ksh60,000, you apportion and say everyone pays Ksh1,000, but then you will find many people carrying the burden for those who refuse to pay.”

The Act will now give each apartment owner complete ownership of their unit, ensuring that the developer does not collect the money in one lump sum.

The CECM explained that sectional property would ensure that everyone has their own title and pays their own rates, allowing them to be unaffected by their neighbors’ defaults. 

He stated that this was a benefit for Kenyans purchasing or leasing apartments because they could take out loans against the property without having to work with the developer. 

Furthermore, it is a win for Governor Johnson Sakaja’s administration because it ensures increased revenues.

EXPLAINED: Why Nairobi Apartment Owners Will Pay Rates Based on Floors