Ruto to lose millions of shillings in rent as new police housing plan comes into force

Sunday November 4 2018

Police Spokesman Charles Owino (centre) during

Police Spokesman Charles Owino (centre) during an inspection of houses leased to police officers at Pine Wood Apartments in Langalanga estate, Nakuru, recently. With him is the apartments owner Zakayo Waweru (left). PHOTO | FRANCIS MUREITHI | NATION MEDIA GROUP  

By KIPCHUMBA SOME and NYABOGA KIAGE

Companies linked to Deputy President William Ruto will join a long list of those owned by influential individuals expected to lose millions of shillings in rent as the deadline for a presidential directive to cancel leases for police houses draws closer.

This comes as questions remain on the legal implications of the move announced by President Uhuru Kenyatta in September and expected to take effect from December 1, with some of the landlords holding leases that expire in 2021.

Details of private houses rented out to the National Police Service involve at least 120 individuals and entities mostly owned by well-connected people who get the billions of shillings paid by to house officers over the lease period.

The Deputy President is connected to the leased houses, first through a company that is owned by his family members, and secondly through a real estate management firm.

LEGEND MANAGEMENT

According to details seen by the Nation, Legend Management Ltd is listed as having rented out to the officers 72 units at Osere Flats in Ongata Rongai on the outskirts of Nairobi for an annual sum of Sh16 million. The contract runs for three years from December 12, 2017 to December 7, 2020.

The 72 units were built on a piece of land that bears the same land registration number (L R 23132) as another set of houses which had been leased to the police by Matiny Ltd, a company associated with Mr Ruto.

Information held by the Registrar of Companies indicates that Matiny was registered on July 29, 1996 and its directors are listed as the DP’s daughter Charlene Chelagat Ruto (14.3 shares) and Rael Chebet Kimetto (85.7 shares). The Deputy President’s wife is known as Rachel Chebet Kimeto and it is not clear if she also goes by the name “Rael”.

Matiny Ltd had leased to the police 98 units at O’sere Flats at a cost of Sh20.3 million per year for three years. The contract ran from June 4, 2015 to June 3, 2018.

LAUNDRY

Over that time, the company received a total of Sh61 million. This brings the number of units leased to the police by companies associated with the DP at O’sere Flats to 170.

A sign post at the entrance to the flats prominently invites the public to a laundry within the premises known as Weston Hotel Laundry. Weston Hotel on Lang’ata Road belongs to the Deputy President and the 2010 returns to the company registry listed Matiny Ltd as one of the facility’s owners.

Furthermore, Legend is also listed as the manager of Easton Apartments on Jogoo Road in Nairobi where the police has rented 100 units for Sh26.4 million per year.

Amaco Insurance Ltd, another company which has long been associated with the DP, is linked to the property. Their lease runs from February 28, 2018 to February 27, 2021.

EASTON APARTMENTS

Details from the registrar indicate that Legend was registered on April 11, 2007 and its directors are David Cheruiyot Rutto, Geoffrey Kiprotich Koros and Boniface Kibiy Terer.

Ms Janet Migiro was a tenant at Easton Apartments paying a monthly rent of Sh24,000 for her two bed-roomed unit until she and other tenants were asked to vacate the property two years ago. “We were all asked to move out but I later learnt that the owner had leased the houses to the government for police officers to live there,” she said. Today two or three officers share the two-bedroom units.

While there is no suggestion of wrongdoing by Mr Ruto and the companies associated with him, there are serious questions of conflict of interest.

On Saturday, Inspector-General of Police Joseph Boinnet maintained that all leases will be cancelled despite the legal questions that could expose the government to millions of shillings in compensation.

“Every lease arrangement has specific exit clauses. If you want to exit it is clearly specified in the contract,” he told the Sunday Nation, adding that in the agreements signed even landlords had a right to end the deal.

NEW TENANTS

This means that landlords who had their leases running will have to get other tenants from January next year.

Paying junior officers house allowances is expected to save the government between Sh2 billion and Sh3 billion that is spent on electricity, water and other bills, and more than Sh1 billion on leasing houses annually.

Currently, out of an estimated 98,000 police officers, only those above the rank of inspector earn house allowances. The rest are supposed to be housed by the government, which has resulted in a crisis.

Mr Boinnet said the police officers are scheduled to start receiving house allowances from December 1 and start living in their own accommodations from January next year. Even those who will be living within police institutions will be required to pay rent, he said.

CONSTABLES

In the new plan, constables in Nairobi will receive a house allowance of Sh18,124. Those in Kisumu, Mombasa, Nakuru, Meru and Uasin Gishu will receive Sh8,124.

The dream of any property developer is to have their houses rented by the government since it assures them of steady income without the hassles of dealing with itinerant and unpredictable ordinary tenants.

Landlords with the right political connections often find themselves holding lucrative lease contracts running into several years. In some cases, the rent prices are higher than similar houses in the neighbourhood.

 A company called Capital Red is the biggest beneficiary of the leasing arrangement, according to details seen by the Sunday Nation. Since April 4, 2016, it has leased out to the police 322 flats at Sh64 million per year. Their contract runs out in April next year.

Information held by the registrar show the company was registered on February 20, 2014 and its directors are Charles Jeremy Gichoi, James Mwangi Gitata and Peter Mureithi Kuria.

LANGALANGA ESTATE

Nakuru County Jubilee Party chairman Zakayo Waweru has leased to the police 80 units in Pine Wood Apartments in Langalanga Estate in Nakuru for Sh25 million annually. His lease agreement runs from July 6, 2016 and ends on July 5, 2019.

Mr Waweru, a prominent timber merchant, came to the national limelight in 2015 when International Criminal Court Prosecutor Fatou Bensouda named him as one of Mr Kenyatta’s alleged accomplices in the 2007/2008 post-election violence.

Mr Maina denied the allegations, threatened to sue and was never required to go to The Hague while Mr Kenyatta’s case was withdrawn.

A number of MPs, both serving and former, have also leased their properties to the police. Nominated MP Maina Kamanda, through his company Altra Vista Investments, has rented out 24 units to the police in Kahawa West estate at a cost of Sh4.3 million annually from January 2, 2018 to January 1, 2021.

Company records indicate that he is the sole proprietor of Altra Vista Investments which was registered in September 2008.

RENT ARREARS

His colleague, Kareke Mbiuki, the MP for Maara constituency in Tharaka-Nithi County, is listed as having rented out 12 units to the police in Kasarani for Sh2.5 million annually. The lease runs from March 3, 2016 to March 2, 2019.

Mr Mbiuki on Saturday confirmed that he owned the 12 units in Kasarani, but complained that he was yet to be paid rent arrears since January this year. “I bought the houses when I was serving my first term in Parliament and I’m still paying mortgage up to date, but the returns have not been good since the police don’t pay,” he said.

“I gave them notice to vacate early this year even before the President announced that police officers will now rent their own houses.”

He shared a letter he had written to the police on August 28 this year notifying them to vacate the apartments in order to enable him to do an upgrade.

“In light of this, we would like to notify you that we will not be renewing the lease on expiry, that is March 3, 2019, due to the scheduled upgrades,” the letter read.

Former Bobasi MP Stephen Manoti had rented out to the police 30 units in Kisumu’s Manyatta estate at an annual cost of Sh5.3 million. His three-year lease expired two months ago, on September 9. Contacted, Mr Manoti, through an aide, promised to call back but had not done so by the time of going to press.

Nyaribari Chache MP Richard Tongi is indicated to have leased 15 units to the police in Daraja Mbili, Kisii County, for Sh810,000 annually. His three-year lease expired in May this year.

TERMINATE LEASES

Mr Tongi confirmed owning the houses, but said he was not opposed to the government’s decision to terminate the leases. “This is a policy change at the national level which we must support. I look at it from the bigger picture instead of trying to be capitalistic and selfish,” he said.

He added: “The government has rightly showed it wants to improve the image of the police force, which we collectively endorse. I can’t go against the national policy as a leader.”

Former South Mugirango MP Omingo Magara had also leased to the Administration Police 37 units of various sizes in Ongata Rongai at annual fee of Sh9.4 million. He is listed as the co-owner of the apartment with Agnes Nyanchama. Their three-year lease expired in June this year.

Details of the deal indicate that Mr Magara and Ms Nyanchama share the same postal address with a Ms Agnes Monari who had also leased to the police 32 units in Donholm Phase 5 for Sh6.3 million annually.

COMMON TENANTS

Mr Magara confirmed to the Nation that he owns the houses, adding that he was not worried about the cancellation of his leases. “I am not perturbed the least by the issue. A lease is a lease whether done with the government or common tenants. I don’t have any problem at all. I would even have the opportunity to rent out my houses at current market rates,” he said.

Despite our best efforts, we could not establish by the time of going to press the owners of some of the companies which were paid significant amounts of money in rent by the police.

For example, we had not established the owners of Shauri Moyo Residency Ltd which was paid Sh47.7 million for 207 units in Shauri Moyo in June this year.

Furthermore, we could not establish the owners of Interrcity General Company Ltd which has leased out 79 units in Eastleigh at an annual fee of Sh12.7 million.

Other companies that have leased their properties include Allessio Two Investments Ltd, Mombasa Homes, Mwanjo Ltd, Sunshine Agencies Ltd, and Thiririka Tea Farm Ltd.

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