A new investor is being sought to take over the Green Park Villas housing project in Kigali’s Rusororo area and deliver homes to their buyers after the scandal-hit DN International failed to complete the construction works on the project.
The revelation was made this week by the Chief Executive Officer (CEO) of Rwanda Development Board (RDB), Clare Akamanzi, in an interview with Sunday Times.
At least 75 people who formerly delivered supplies or bought homes from the now defunct DN International have launched a fresh lawsuit against the real estate developer in a case that has drawn in Kenya Commercial Bank (KCB).
The petitioners are demanding payment for investments made on the development of one of the realtor’s housing project (Green Park Villas) in Gasabo District, which was incomplete when DN International failed to operate, forcing the owner, Nathan Lloyd, to flee the country in 2011.
The case has drawn in RDB because it licensed DN International to operate in Rwanda and KCB because as a financier of the project, the bank seized the incomplete estate in an effort to recover over a Rwf1.5-billion loan it was owed by the realtor but didn’t take care of paying its creditors.
Akamanzi said RDB’s priority has been to find a new investor to take over the housing project and deliver homes to initial buyers.
She said that she hopes the new investor might be available by the end of the year to start working with KCB to continue the project and deliver homes to their owners.
The official said that RDB has agreed with the bank to find an investor who would partner with it to build the estate and finish it properly and then look at the cost of finishing the estate and the market price of such houses and then try to negotiate how the original owners can be given first priority to take the houses.
“That might mean that the original owners will get those houses at the same price as they had agreed with DN International or at an adjusted price depending on the cost of the project,” she said.
“KCB is willing to have that conversation and the bank has been working hard to find an investor to work on that and they have been fully cooperative. We hope we can get an investor before the year ends and that we can try to save the project so that people can get back their houses”.
The official said that DN International came as an investor in Rwanda and got all the support the country gives to investors but did not meet its obligation to the people who bought the houses or even the bank that gave it a loan.
“It was wrong for DN International to receive money from buyers of the houses and people didn’t get their houses,” she said.
“RDB’s priority has been to get the houses for the owners because they have used their savings and they don’t have their houses while they are ordinary people of Rwanda. We want to do our best to see that they get their houses”.
George Odhiambo, the acting managing director of KCB Rwanda, has said that the bank has always been willing to discuss with mortgage investors with supporting evidence of payment through DN International bank account in KCB.
He said that finding a partner to complete the housing project would be a good idea but the challenge so far remains finding evidence of people who made payments on the homes.
“The developer handled the payments wrongly and no one has ever come to us and show proof of money deposited,” he said.
Francis Bayingana, a representative of petitioners in the fresh lawsuit against DN International, told Sunday Times it was unfair for KCB to take over the land that was used as collateral in the Green Park Villas housing project in Kigali’s Rusororo area after DN International failed to complete the construction works.
Bayingana said they have sued for over Rwf780 million as the realtor failed to deliver the promised homes and didn’t bother to pay suppliers of materials and services, from security guards to iron sheet and cement providers.
He also says that the idea of bringing a new developer to finish construction of the homes and deliver them to owners might not work because they could now be more expensive than when they entered the mortgage agreement.
“We are afraid they would be available on a very high price today because we negotiated based on the prices of six years ago when the project started,” he said, explaining that more than ten people had made down payments on the houses.
Meanwhile, it is feared that while home buyers might be hopeful that they could get a new developer to help them, suppliers of construction materials in the DN International project might have more difficulties recovering their money because the company hardly has any assets left to sell.
“We will do it if it’s possible but I see that as a very difficult proposition, especially for suppliers because there are no assets that DN International has,” she said.
Bayingana said that petitioners can’t wait to reach a settlement on the DN International issue and they have decided to engage courts with the fresh lawsuit against the realtor in last ditch efforts to secure their homes.
“Without a court verdict, we can only continue with these endless discussions. We will respect the court’s decision,” he said.
Despite an international arrest warrant issued by the Government, the owner of DN International, Nathan Lloyd, is yet to be arrested since he fled the country in 2011.