WHAT HAPPENS BEFORE A BANK DECIDES TO AUCTION A PROPERTY IN KENYA?
When a borrower of a secured loan defaults in honouring the loan repayments, the banks discuss the issue with them and they can be given a chance to adjust the repayments to lower amounts and the period extended. Banks sometimes give the borrower up to three chances depending on bank policies and the relationship with their clients.
If the borrower is not in a position to continue with loan repayments, the bank issues instructions to the auctioneer, who will then locate the property and serve the notification of sale on the
registered owner or on an adult relative of the owner. The owner of the property must be given a forty-five day (45) period, to exercise their equitable right of redemption, by paying the amount set forth in the court warrant or letter of instruction.
Upon the lapse of the 45 days’ notice, the auctioneer shall proceed to arrange the sale of the property in not less than 14 days from the day of the first newspaper advertisement in the local dailies.
During the appointed Auction date as per the advert on the daily newspapers, bidders shall present their bids and the highest bidder wins and will be required to meet the conditions of sale within the stipulated timelines upon which the title deed will be transferred to their names and shall assume ownership of the property.
Auction of immovable properties are governed by Auctioneers Act No. 5 of 1996.
