The Business Laws (Amendment) Bill, 2024 (the Bill) was recently tabled before the National Assembly. The Bill seeks to, among other things, amend the Land Act, Chapter 280 of the laws of Kenya (the Land Act) by reducing the notice periods required to be issued under the Land Act in relation to the enforcement of charges over affordable housing units.
These proposed changes are likely to disincentivise the granting, by borrowers, of security over affordable housing units and particularly over units that form matrimonial property or borrower’s residence, as the legal periods within which those borrowers are allowed to remedy defaults will be slashed.
On the flip side, the proposed changes may incentivise lenders to enter into agreements with the Affordable Housing Board for the financing of the off-take of affordable housing units. With faster recovery periods, lenders will also be able to free up capital faster, therefore increasing lending capacity. With the reduction of remedy periods, however, the probability of litigation is higher, as chargors are likely to resort to courts to seek relief against enforcement.
