Devils that invaded real estate agencies

In early 2000, a time when the real estate industry was seen by many to be picking up, Property Masters, a defunct real estate agency, was one of the few agencies championing the “visible” growth in the real estate sector in Uganda. At around the same time, what happened to be (and still is) the biggest blow in the industry occurred causing a historical shock that perhaps could have gone on to affect the entire Ugandan economy.

Patrick Kasulu, Property Masters’ founder and propriety, witnessed his real estate empire crumble after close to 2,100 complaints were lodged before police against him and his company after he issued a bad cheque worth Shs48m to a one Faridah Birabwa, according to this paper’s story titled: The story of Property Masters: Where is Patrick Kasulu?.
“Of the 2,100 complaints, 169 people managed to sue him on claims of defrauding them of more than Ugandan Shs3b,” the story further says.

Patrick Kasulu’s story is one that is to date still fresh in the minds of most real estate players.
For instance, Shem Sabiti Bageine, the managing director, Bageine & Company limited, a real estate agency and consultancy firm, during an interview, described Kasulu’s fraud case as “an unforgettable catastrophic event within the Ugandan real estate industry.”

Patrick Kasulu’s fraud case in early 2000s might have been that one event that helped both the public and authorities open their eyes to what was going on the industry, but this doesn’t seem to have changed.

Today, cases of people being fleeced by fraudsters disguising as real estate agencies still exist.

Late last year, media reports indicated that close to 25 people dragged Jomayi Property Consultants Lltd, a real estate agency in Uganda, to the Justice Catherine Bamugemereire-led Commission of Inquiry into Land matters over titles that have been missing for close to eight years. When Daily Monitor contacted Miria Matembe, one of the people who dragged Jomayi to the land commission, she confirmed the reports saying: “It is true we dragged Jomayi to the land commission. I bought land from Jomayi in 2011; however, ever since then, I haven’t been able to get my land title and yet close to eight years have passed.”

There could be cases worse than the one mentioned above.
Edward Mwebaze, Jomayi’s spokesperson, says the company has been in discussion with the group of people who dragged the agency to the Justice Bamugemereire-led Commission.
What was agreed on, Mwebaze says, was for the complainants to give Jomayi more time to sort out the issue at stake.

Tell-tale signs
In 2014, Peter Kajuba* bought close to three plots of land from a real estate agency. He says he bought each plot at Shs10m. However, since then he hasn’t been able to get his land titles.
“I bought in Wakiso District, Bujjuko, to be particular. On buying the land, me and other people who had bought plots of land from this agency came to learn that the land actually belonged to Henry Tumukunde, a former security minister in Uganda,” says Kajjuba.

Kajjuba says despite talking to the agency through his lawyers, the company hasn’t done anything so far.
“We have engaged the agency, but nothing has been done so far,” he says. If an agency does not fulfill its part of the bargain within the stipulated of time in the agreement, then it is a sign that something could be wrong and the property owner needs to dig deeper into the matter.

How defrauding is done
It is almost impossible for one to fully understand how exactly some group of fraudsters disguised as real estate agencies plot a scheme with an intention to fleece someone without taking time to be part of whatever they could be having in plan. As I set out to find out how some of these people operate, I decided to talk to a person who had previously been a victim of fraud.

Charles Sselwanyi (not real name), tells me such fraudsters usually operate in a group and are always meticulous when putting their plan into action.
“When I was defrauded back in 2008, I came to learn that it’s usually a group of people that meticulously put their plan into play without you [the victim] knowing what’s going on,” Sselwanyi explains. “These people,” he adds, “are usually well placed in places where it’s easy for them to get their next victim or in some cases may get to their victim through people who they close to. These can be friends or even relatives in some cases.” Sselwanyi says that in some cases these people may not be aware about the kind of people they are recommending to their friends or relatives. He, however, doesn’t dispute the fact that at times one’s ‘friend [s]’ may intentionally entrap a person they are close.

“It is true that in some cases, one may end up recommending a person whose intentions they may not know. however, it is also important to note that some may end up doing this with an intention defrauding,” he says.

Sselwanyi cautions that before one puts pen to paper for any kind of property deal, they must be sure about the kind of people they are dealing with or follow different steps to make sure they are not dealing with fraudsters.
“When involved in the buying of property, one follows procedures like checking whether the person they are buying form is the actual owner of the property, among others,” he advises.

Success story
Although there are cases of people being defrauded by some real estate agencies, there are many success stories of people who have got land or property through a real estate agency. For instance, Geoffery Olowo, a resident of Kampala, is one of those who successfully bought property through a real estate agency.

This, he says, was last year when he approached one of his church members who was into real estate with Planet estates limited, a real estate agency.

“I knew Rogers Matovu even before deciding to purchase land from him. He was my church member at Deliverance church in Nsambya. So it was easy for me trust him,” he says.

“So he drove us to Busiika where the plots of land we were going to buy were. We paid the agency in instalments and after completing the payment in three weeks’ time, we received our land titles,” Olowo adds.

Industry players speak out
Following years of political instability in Uganda, human settlement, according to Anatoli Kamugisha, proprietor of Akright Uganda, a real estate agency, the sector had been destabilised.
He adds that upon the return of minimal peace in the country in the late 1980s, the increase in the demand for houses, most especially in urban areas, increased, something he says led to some private players coming up with the concept of buying and selling either fully finished houses to people or just land. This, he adds, was not something that just happened out of the blue since Uganda’s private sector was still narrow.
“At some point, people were frustrated because of shortage of housing in the country. This is how people like Patrick Kasulu took advantage of what most Ugandans were going through by defrauding them. Kasulu’s fraud in early 2000s was one of first major illegal activity in the industry,” he says.

Professionalism
The years that have followed, Akright’s Kamugisha, says players in the industry have become more professional, which has helped agencies gain trust from the public.

“I think the public has started to trust most real estate agencies. The only problem in the industry is mostly about land procurement. Real estate agencies, buy the land mostly from some Ugandan landlords, who end up selling the land to two or more different people making the agencies look like they have defrauded people,” says Kamugisha.

Lazarus Mugabi, Association of Real Estate Agencies [AREA] member and real estate business practitioner, too agrees with Kamugisha’s submission saying that: “People are slowly gaining trust from the agencies because more players have come on board. Some of these, he claims, are internationally respected agencies. “Some of the new players that have come on board have brought professionalism to the industry - something we applaud them for doing,” he says.

However, both Anatoli Kamugisha and Lazarus Mugabi, also point out that in some cases, when fraud happens, the people involved in these kinds of schemes at times may be the employees of a given agency though in most cases, the blame goes to the proprietors/directors of a real estate agency involved.

Why fraud has persisted
Fraud in the industry is one challenge that has been persistent for quite some years despite the industry showing some signs of growth.

Mugabi says persistence of the vice for all this years has partly been as a result of having an industry that is poorly regulated.
“The lack of proper regulation of the real estate industry has led to infiltration of people who are not professional,” he says.

Bageine also adds to Mugabi’s school of thought saying that: “Much as the industry is infiltrated by people who are fraudsters, who in most cases come as a result of poor regulation, there are also those who are completely ignorant about the real estate industry. All these people know that as long as one is able to connect a buyer to a seller then that’s all.”
Before Association of Real Estate Agencies came into existence, the real estate industry lacked proper organisation.
Much as the umbrella body is in existence today, some players have decided not to subscribe to it. This, some believe, may explain why some challenges like fraud have been persistent for this long.

“When Patrick Kasulu went ahead to commit fraud in the early 2000s, the industry was just picking up and lacked organisation. Even after Kasulu’s fraud happened, this has gone on for some years simply because there isn’t enough organisation in the industry,” Kamugisha points out.

Besides that, the ever increasing levels of unemployment in the country is one of the other reasons some argue that has led to fraud in the industry persisting.
“Having more youths who are unemployed has not only affected the real estate, but also other sectors of the Ugandan economy. For instance, there was a time when there was a lot of fake currency flooding in the economy. The people behind these kind of dubious deals are mostly those who are unemployed and looking for ways to survive,” says William Kalule, a real estate developer.

How it affecting growth
One of the things Shem Sabiti Bageine points out in regards to the continuous fraud in the real estate sector is most agencies losing their clientele base because of low levels of trust from the public.

“Business is about relationships. If your client or rather customer has little trust in you, then chances of them dealing with you are slim. Fraud has brought about a section of people with in the public to have trust issues with most real estate agencies,” Bageine says.

Kamugisha, also says that the low numbers of clients can badly hurt real estate agencies since they would not have enough business. He says this deeply affects the growth of the industry.

What regulators are doing
Following a number of cases of fraud that have been occurring in the industry for the last years, Irumba Henry, the principal policy analyst, Ministry of Lands, Housing and Urban Development, says the government has embarked on formulating a policy that would help regulate the real estate industry in Uganda. This, he says, started with the formulation of the national housing policy that was passed in 2015.

“When Patrick Kasulu defrauded people in early 2000s, there was no policy regulation for the industry. Kasulu’s fraud, however, opened up our eyes and we came to realise that the industry had to be regulated. That is how the national housing policy came about,” Irumba says.

One umbrella body
One of the other things that have been done to help do away with fraud in the real estate industry, according to Irene Gwokyalya, the acting Commissioner of Housing Development and Real Estate, Ministry of Lands, Housing and Urban Development, is encouraging players in the industry to organise themselves under one umbrella body.

“We have had to work hand in hand with real estate players when formulating policies for the industry. For instance, we proposed to them that they organise themselves under one umbrella body and that is how Association of Real Estate Agencies came to be,” she says.

Additionally, Irumba also says the government, Ministry of Housing and Urban Development in particular, has managed to put in an effort to ensure most players in the industry are registered. This, he says, has helped reduce the levels of fraud within the industry.
Irumba also says the ministry has been working hand in hand with players in the industry to draft a bill meant to help regulate the real estate industry. He says the bill is in its late stages.

How to tell a genuine agency
“A genuine real estates agency will follow a certain code of conduct.” Says Catherine Nanteza, an administrator with Association of Real Estate Agencies [AREA]. She says one of the things one has to be mindful of is making sure that the agency they are dealing with have an address. “Dealing with an agency with no address,” she adds, “only puts some one into risk of being defrauded by fraudsters.”

Additionally, Nanteza also says finding out whether the agency is registered with the authorities is something clients must do.
“Dealing with an agency that is registered with authorities like KCCA and others, most likely helps one avoid situations of them being defrauded,” she says.

The level of professionalism, Nanteza says, is one of those other ways is to identify whether the people one is dealing with are professional.
“An unprofessional real estate agency will have its people act in a way that is funny. In this case when buying land or any other kind of property, you will find that more than five people are involved and are all acting unprofessional, one has to be mindful of such,” says Catherine Nanteza.