Nairobi, Kenya- In a significant shift, the Kenyan government is pushing for changes that could see defaulters in the Affordable Housing scheme lose their homes much faster.
The proposed amendments to the Business Laws (Amendment) Bill No. 51 of 2024 aim to reduce the notice period that lenders must give before repossessing a home.
This shift could have major implications for Kenyans struggling to meet their housing loan payments, potentially leading to quicker foreclosures.
Currently, under Section 90 of the Land Act, when a borrower fails to pay their mortgage, the lender is required to provide a three-month notice to warn the borrower of the default.
This notice gives the borrower a chance to make things right or seek other remedies.
However, the new proposal, driven by Senate Majority Leader Aaron Cheruiyot, seeks to shorten this notice period for those who default on loans tied to President William Ruto’s Affordable Housing scheme.
The plan would make it easier for lenders to initiate the sale of a property under the Affordable Housing Act, potentially reducing the time given to borrowers to remedy their overdue payments.
While this could result in swifter action, it also means that defaulters could lose their homes faster if they don’t catch up on payments quickly enough.
Govt Proposes Changes for Affordable Housing Owners read.kenyans.co.ke/SZFUC
The Impact on Homeowners
Under the current regulations, a borrower who fails to make timely payments for four consecutive months is already classified as a defaulter.
At that point, the Affordable Housing Board is empowered to take possession of the property, as outlined in the Affordable Housing Regulations 2024. Now, with the proposed changes to the Land Act, that process could unfold even faster.
For many Kenyans, this means the window for finding alternative solutions—like renegotiating payment terms or selling the home—could be much narrower.
For homeowners in financial distress, the threat of losing their homes could become more immediate, leaving them with fewer options to secure their property.
The Senate has opened the floor to public input on these proposed changes. Kenyans have until April 15, 2025, to submit their comments or concerns about the amendments.
Feedback can be sent directly to the Clerk of Senate or the Standing Committee on Trade, Industrialisation, and Tourism.
While the government’s goal is to stimulate the affordable housing market by making it easier for lenders to act in the case of defaults, it also risks creating a risky environment for those struggling to keep up with payments.
In the end, the success of these changes will depend on whether they lead to an affordable housing sector that benefits both lenders and homeowners—without putting too many families at risk of losing their homes too quickly.
