Uganda Real Estate

The government is finalising the drafting of a law, which will regulate the booming real estate industry in Uganda. This is in response to the mushrooming number of estate developing companies in the country yet there are no specific laws to regulate their establishment and operations.
The Minister of State for Housing, Mr Michael Werikhe, said the law is being prepared and will soon be presented to cabinet for approval.
“We want to register all real estate developing companies in the country because most of them do not meet the required housing standards,” Mr Werikhe, said during the launch of a handbook on “National Slum Upgrading Strategy and Action Plan’ in Kampala recently.

Current regulation

Currently, real estates are regulated by the town and county planning boards under the statutory body of the physical planning unit, which is only responsible for approving construction plans of residential houses without going into the detailed site plans.
According to Mr Werikhe, the basic building guidelines require all estate housings to have access to roads, sanitary, piped water and electricity plus the estate developers should also be registered by the Ministry of Lands, Housing and Urban Development.
“All residential structures will have to conform to a particular town’s development plan. Anyone wishing to build will have to provide a well detailed plan of his project for guidance,” he said.
Some of the developers that Business Power talked to have welcomed the move saying it would create more credibility in the young but fast growing industry.
Mr Anatoli Kamugisha, the managing director of Akright Projects Limited – a real estate developing firm, said this is a perfect decision and it has come at the right time when more people are joining the business.
“For example there was no house zoning – the separation of residential areas from industrial areas – in Uganda as it is in developed countries,” he said.
The law will benefit mostly people who are planning to buy houses since it seeks to separate industrial areas from residential areas and for better provision of infrastructure like roads.

Old laws
Mr Joseph Kitamirikre, the chief executive officer of National Housing and Construction Company Limited, was optimistic that any laws that will help to improve the business environment are welcome since the existing laws are 40 to 60 years old.
“Though we had the existing laws, they need better implementation and enforcement,” Mr Kitamirike said.
Some of the real estate developers include: Akright Projects Ltd, Riverside Acres Ltd, Jomayi Property Consultants, National Housing Construction Company Limited, Lugeye Property Consultants, Nationwide Properties Kensington Real Estate Developers among others.
Though there has been no law regulating the industry, real estate developers have formed associations as a means of providing better services like the Uganda Property Developers Association and Real Estate Agents Association, which register all individuals and companies involved in the real estate business.

Mr Joseph Magandazi, the managing director of Jomayi Property Consultants said the move will guarantee quality to the industry and sort out people who start business without clear intentions.

Property management is the management of residential, commercial and industrial property as a business which includes rent collection, property maintenance and improvements, processing evictions, bill payments, book keeping and financial reporting.

According to Mr Ashe Semango, the managing director of Seas Property Managers Limited, in Uganda as a developing country, we should look at property management as a fundamental entity in the real estate investment.

Many landlords have had misunderstandings with tenants to the extent that they (tenants) disappear with unpaid bills like rent, water and electricity. “One important role is that of liaison between the landlord and the management firm operating on the landlord’s behalf and that of the tenant. Duties of property management include,” he says.

The duties
According to Mr Anatoli Kamugisha, the managing director of Akright projects limited, property managers play the following roles:
* Identify developers with a right to property and tenants in need of property
* Pre-qualify the tenants
* Take instructions from developers of how the property should be managed
* Maintain and renovate property
* Fixe rental charges; that is, looks at the market and then goes into consultations with the developers about the prices
* Provide information both to developers and tenants
* Recover money from the tenants
* Compile data for the property, making it easy for the people (tenants and developers) to know and see what is available.
* Submit monthly retirements to the taxi body; that is city council and URA on behalf of the property owner
* Responsible for liaising with the lawyers (if it is not a legal firm agency)
* Make payment to the local council

Mr Semango however, says proceedings are at times considered a separate function, set aside for trained attorneys, although a person will be responsible for this in his job description, there may be an attorney working under a property manager.

“A property management service handles the day-to-day needs of your property, minimising vacancies and maximising your bottom line. They will market your property; make your property accessible through websites, newspapers as well as through screen potential tenants so that owners get a quality tenant to fill their vacancy,” he says.

Property managers and agents like Seas Property Managers have the knowledge to help a customer optimise their investment, they are familiar with laws and guidelines. According to Mr Salim Ali, a businessman and owner of a number of houses in Kawempe, if you choose to use property managers, you can be an absentee owner as your management service collects your rent, maintains the property, handles emergencies of all sorts and generally runs your property as if it is their own.

“Some management companies will screen your prospective tenants for you by checking their credit and references so that you can be sure you have the most reliable and stable renters or leasers. They also weed out prospects that could cost you money instead of being an asset to your property. They will handle maintenance requests by residents as well as maintain your grounds, units and equipment,” he says.

Safety measures
Mr Semango says these services come at a cost and, like anything else, it is best to shop around for the best price as well as the quality of service. They vary in their fees; some have a set charge per unit while others take a percentage of the rent; there may be a separate basic management fee based on the rental income of the property.

Mr Kamugisha says the only risk one can face is getting a wrong property manager to handle their property. He says, there are many people who come up to office and abuse it. “It is better you look for someone who has operated for some good time; that is, from five to 10 years. This way, you know that they have established their reputation.”

Before evicting the tenant, Mr Kamugisha says the developer has to look at the agreement which was signed before the tenant took up the property. “However, if there was/is no agreement, then there will be trouble settling that case.” He adds that in case the tenant is leaving, they should be able to notify the owner a month or three months before (depending on the agreement signed) so that the owner is in position to look for another tenant early enough.

The contacts

Uganda Property Agents + 256 782 658 124
GABE International +256 782 351 870
EA Properties + 256 0753406068
Knight Frank Uganda, Tel: 041 4 341 391
Cannansites limited, Tel: 0414347397
Luyege Property Consultants, Tel: 0414270678