Housing
Finance Group (HF) has been forced to pay a widow Sh150 million in compensation
for the illegal selling of her Nairobi home in order to recover a loan of
Sh500,000 borrowed in 1980.
Ms Faith Wanjiru Kimeriah, the administrator of
Harrison Charles Kimeriah's estate, proved her case against the mortgage
provider, according to High Court judge Josephine Mong'are, and was entitled to
the reliefs requested.
The judge stated that Ms Kimeriah was not served with
the appropriate statutory notice before the property was sold to a third party
in July 2006.
"In
light of the foregoing, I am persuaded that Ms Kimeriah has proved her case
against HF on a balance of probability, thus she is entitled to the reliefs
sought in the plaint,"ruled justice Mongare, and directed the lender to
pay her the costs of the suit and interest as well.
Through
lawyer Gichuki Kingara, Ms. Kimeriah argued that if her husband had returned
the Sh500,000 he had borrowed back in 1980 in full. The lender had no claims
against the couple as of 1994.
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On
July 8, 1980, Mr. Kimeriah approached HF and borrowed Sh500,000, the court was
informed. The patriarch was the primary borrower on the 4.2-acre parcel and any
developments on it, which were charged by the couple.
The
loan was to be insured, and her late spouse paid Sh451.25 to cover the cost of
the insurance, according to the court proceedings.
According
to the loan agreement and the letter of offer submitted as evidence, the
insurance firm was to be found by the lender, and Mr. Kimeriah was charged a monthly
premium deduction as part of his loan payback.
The
conditions further stipulated that the charged property would be released and
the loan balance would be fully redeemed by the insurer in the event of death.
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However,
the widow claimed that the lender varied the rate of interest contrary to the
terms of the letter of offer hence increasing the monthly repayments.
She
told the judge that her late spouse was not notified of the modifications,
which were made randomly. Ms. Kimeriah claims that even though her husband had
paid the loan and interest totaling Sh1,115,181 as of 1994, the bank continued
to demand Sh9 million, compelling him to file a lawsuit. When the lawsuit was
still seeking determination, Mr. Kimeriah passed away in 2005. She said that
when her Langata property was sold to Mr. John Karungai Nyamu, she was forcibly
removed and never received any communication from the bank. Ms. Kimeriah
expressed to the court her dismay at discovering that the property had been
valued at Sh37 million when it was originally sold for Sh10 million. She
referred to the sale as illegal.
She went on to say that as of the time she testified,
the property's valuation, including all developments, was estimated to be Sh150
million.
Although no policy was ever taken out to secure the
loan, Housing Finance acknowledged that the life insurance was debited based on
the records. Since then, the financial business has filed an appeal against the
ruling made by the High Court.
Additionally, the lender claimed that Mr. Kimeriah
started failing to make loan payments in October 1980 and that he received
letters about interest rate variations. Ms. Kimeriah said that the lender had a
duty to guarantee her husband's insurance, but HF countered that even while the
loan was insured in accordance with the charge instrument, the insurer was
unable to repay the loan in the event of Mr. Kimeriah's death because of
outstanding debts. The judge did note, nevertheless, that the lender was unable
to provide evidence of the purpose of the insurance premiums that were taken
out of Mr. Kimeriah's account.
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