There is fresh uncertainty on the fate of home buyers and financiers of the Palm Estates in Kagugu, Gasabo District following the resignation of the receiver of the property.
City lawyer, Richard Mugisha, resigned from his position as receiver from the stalled Palm Estates project, last week.
The project, which has been at the centre of controversy between the developer and funders, was put under receivership in 2016.
The property went under receivership after an agreement between the developer, Ujenge Group, and financiers - Ecobank Rwanda and Shelter Afrique.
Mugisha took up the role of receiver following the intervention of the Rwanda Development Board (RDB).
In a correspondence from the law firm to RDB seen by The New Times, the lawyer said that he had made efforts to engage all stakeholders, including homebuyers and lenders.
However, no agreement had been reached on a rescue plan that would preserve rights of home buyers and at the same time enable lenders earn back their investments.
By his assessment from the deliberations with the parties, he concluded that the process had hit a deadlock, thereby resigning, he said.
The existence of a receiver had restored hope that homeowners in the estate who paid up to 70 per cent down payment would secure their properties.
The $12.6 million (about Rwf8.7 billion) project started in 2011, bringing on board Shelter Afrique and Ecobank, the co-financiers.
Shelter Afrique contributed $6.5 million (about Rwf4.5 billion), while Ecobank added $2 million (about Rwf1.4 billion).
The first phase of the project consisting of 32 apartments sold out in pre-sales and was expected to be ready for the new buyers by October 2013.
The first phase which had sold out has seen would be homeowners in the estate paying up to 70 per cent down payment.
The apartments had been priced at Rwf28 million (two bedrooms), and Rwf35 million and Rwf50 million for small and large three-bedroom units, respectively.
However, disputes emerged after the two co-financiers accused Ujenge (the developer) of failing to raise its share of the equity and called on the firm to quit the venture and give way for a new investor.
In their defence, Ujenge said that they had sourced equity investors such as London Based TLG capital, who one of the co-financiers, Shelter Afrique, seemed to object.
Patrick Sebatigita, the proprietor of Ujenge Group told The New Times that the exit of the receiver ought not to change much in regards to the home owners getting their property.
He said that the 32 buyers should not lose their property as they, by law, have a right to the property.
He backed a proposition floated around September last year whereby homeowners would raise the remaining 30 per cent investment to complete their apartments which they would then go ahead to own.
The two financiers would have an option of taking over the commercial space and going ahead with developing the second phase or selling it to another financier or developer which would prevent their losses.
The New Times understands that the 32 buyers have since formed an associated entity, which is incorporated by law to facilitate the completion of the property.
The 30 per cent remainder is about $470,000.
Sebatigita said that the implementation of the proposal is long overdue and serves the best interest for the homeowners and compliance to court orders.
Considering that the developer had already acquired a building permit for phase two of the project, he says that the proposal would see homeowners get their property and the banks get back their money.
“The most important thing is to give buyers access to their homes. That is in the interest of the big picture. We need to give priority to the buyers and build confidence in the market,” said Sebatigita.