The fate of tenants who paid deposits for houses in the stalled Ujenge Palm Estates development remains in doubt as Ecobank Rwanda, which is one of the financial institutions that provided underwriting services, considers liquidation of the property, months after the project was put under receivership.
Police on February 10 arrested Sebatigita Patrick, the promoter of the project, after tenants filed charges of fraud against him. Rwanda National Police spokesperson Theos Badege confirmed the arrest.
“It is true Sebatigita Patrick was arrested on charges of fraud and deceit over a housing project involving 32 people who were promised houses and apartments in Kinyinya Gasabo District,” he told this newspaper.
The $12.6 million project hit a snag last year after an impasse between proprietor Patrick Sebatigita and the two financiers Ecobank and Shelter Afrique, who wanted him out after Ujenge Group failed to meet its share of the equity in the project.
The interests of tenants who had made upfront payments of as much as 70 per cent of the properties they were buying had appeared secure when the project was put under receivership as part of a Rwanda Development Board mediated process. This followed the fallout and subsequent court battles between the developer and the financiers.
Richard Mugisha of Trust Law Chambers was appointed the receiver but Ecobank appears to be running out of patience. Mr Mugisha said his mandate would be to protect the interests of both the funders and property owners.
“The new management at Ecobank does not believe in receivership of the project and want to dispose of the property in a public auction. Those involved in the matter are not happy about this,” said a source close to the matter.
Ecobank was not available to comment on the latest developments.
This puts tenants in a difficult position as many had even paid up to 70 per cent of the value for the houses in Palm Estates, located in Kigali’s Kinyinya suburb.
With the receivership option, tenants would have been treated as creditors to the project and would have either been given refunds of their money or allocated the properties they paid for.
The receiver manager was supposed to manage the project and ensure that financing institutions recover their money and buyers get their houses.
Sources say that after hearing that the bank was considering auctioning the properties, the tenants decided to lodge a case against Mr Sebatigita.
However, the Rwanda Development Board said it is not aware of any plans to liquidate the estate.
“Requests go through the Registrar General’s office for approval and we have not received any request for auctioning of the property,” said Louis Kanyonga the Registrar-General at RDB.
Ms Kanyonga said Mr Sebatigita’s arrest would not affect the receivership process in anyway.
“He was no longer part of the project after it was put under receivership. His case is a criminal matter involving him as an individual,” she said.
The project started in 2011 and attracted funding from Shelter Afrique, which contributed $6.5 million, and Ecobank which invested $2 million.
The apartments were being offered at Rwf28 million for two bedrooms; and Rwf35 million and Rwf50 million for small and large three-bedroom units, respectively.
Although Ecobank is yet to give a formal request for disposal of the property, Rwanda Today is informed that the decision has already been made. What is not clear is whether Shelter Afrique, the co-funder is in agreement with this course of action.
The first phase of the project consisting of 32 apartments sold out in pre-sales and was expected to be completed in October 2013. The second phase was to have 103 units, eight penthouses and commercial space, according to documents from Ujenge Group.