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ELCPartially AllowedNot stated in judgment (orig. Milimani ELC; suit heard at Milimani Environment and Land Court)· [2022] KEELC 511 (KLR)

Vincent A Chokaa & another v Chengdu Guangling Kenya Company Limited & 3 others [2022] KEELC 511 (KLR)

Environment and Land Court
25 January 2022
BEB M Eboso
3,719 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~15 min to read original · ~4 min brief

The bottom line

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Kenya's Environment and Land Court ruled that informal residents' associations are legitimate when developers fail to hand over management companies, and ordered the developer to complete the handover.

What this practically means

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Executive summary

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Two plaintiffs who purchased Apartments M24 (2010) and M21 (2013) on LR No 330/432, Lavington, sued the developer and three officials of an informal residents' association. They sought an injunction over parking bays M7 and M8, audited accounts of service charge collections (2010-2014, including Safaricom mast moneys), and an order compelling the developer to incorporate a management company and transfer the reversionary interest. The court framed three issues: the legitimacy of the welfare association, whether the plaintiffs' rights were violated, and entitlement to relief. The court found that the developer had incorporated but failed to operationalize the management company, creating a vacuum in which residents lawfully formed an ad hoc welfare association; it was a legitimate committee, not a busy body. The parking relocation decision had been rescinded, so no property-rights breach was established and the injunction was unnecessary. The accounts plea was held to be a general civil dispute outside the ELC's jurisdiction under Article 162(2)(b) and Section 13 of the Environment and Land Court Act, to be pursued in the Magistrates' or High Court. The incorporation prayer was moot since the company existed. However, the court granted mandatory orders directing the developer to issue shares, convene an AGM to elect directors and hand over the management company within six months, and transfer the reversionary interest in LR 330/432 to the management company within nine months. Each party bears its own costs. The suit was partially allowed.

Key legal issues

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01

Legitimacy of the informal estate welfare association

Holding

The association was a legitimate ad hoc committee of apartment owners and residents, not a busy body, and is expected to facilitate operationalization of the management company and then cease managing the estate.

Reasoning

The developer had incorporated but never operationalized the management company, creating a vacuum. Desperate residents formed a committee to address common problems including security, cleaning, lighting and parking. Without a registration certificate they could not open a bank account in the association's name, explaining the 'Odhiambo and Others' account. The 1st plaintiff himself participated in the committee's activities. Faulting them would be irrational.

p. 3
02

Whether the plaintiffs' property rights were violated

Holding

No breach was established; the parking relocation decision was rescinded and the allocation of specific parking slots was a necessary collective measure.

Reasoning

The grievance related to the committee's decision to relocate the plaintiffs to distant parking bays, which was subsequently rescinded and the original bays restored. The 1st defendant admitted it never allocated specific bays, so a real parking problem existed. The committee's allocation of specific slots to specific apartments was justified. With the plaintiffs' concerns addressed, no constitutional breach warranted the court's intervention.

p. 3
03

Whether the plaintiffs were entitled to the reliefs sought

Holding

The injunction and accounts prayers failed; the court instead ordered the developer to operationalize the management company and convey the reversionary interest.

Reasoning

The injunction was unnecessary as the parking dispute was resolved. The accounts plea lay outside the court's jurisdiction under Article 162(2)(b) and Section 13 of the ELC Act, belonging to the Magistrates' Court or High Court. The management company was already incorporated, but the 1st defendant, which led no evidence, gave no reason why the reversionary interest should not be conveyed; all parties other than the developer supported that relief.

p. 4

Legal principles established

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  • Where a developer fails to operationalize a management company, residents may lawfully form an informal ad hoc welfare committee to manage common affairs pending operationalization; such a committee is not an illegal busy body.
  • Upon disposal of a reasonable number of apartments and registration of leases, the developer must incorporate and operationalize the management company, issue proportionate shares, hold the first AGM, and convey the reversionary interest to the management company.
  • A claim for audited accounts of moneys collected by a residents' committee is a general civil dispute outside the jurisdiction of the Environment and Land Court.

Court orders

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  1. 1.Dispute relating to the parking bay treated as amicably resolved, the 1st plaintiff's Parking Bay having been restored to him
  2. 2.Plea for audited accounts rejected on the ground that such a plea ought to be canvassed in the court vested with jurisdiction to deal with general civil disputes
  3. 3.Plea for an order directing the 1st defendant to incorporate a management company rejected, the management company having been incorporated
  4. 4.An order directing the 1st defendant to issue shares to apartment owners and to convene an annual general meeting to elect directors of the management company responsible for the estate on LR Number 330/432 and hand over the management company to the new board of directors within six months
  5. 5.An order directing the 1st defendant to transfer the reversionary interest in LR Number 330/432 to the management company within nine months
  6. 6.Parties to bear their respective costs of the suit

Authorities

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Legislation

  • Constitution of KenyaArticle 23(1)
  • Constitution of KenyaArticle 23(3)(b)
  • Constitution of KenyaArticle 36(1)
  • Constitution of KenyaArticle 36(2)
  • Constitution of KenyaArticle 162(2)(b)
  • Environment and Land Court ActSection 13

Cases cited (1)

  • Benard Nzioka v Francis Kitongu & 3 others
    HCCC No 1 of 2014
Jurisdiction invoked
Article 162(2)(b) of the Constitution and Section 13 of the Environment and Land Court Act

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Vincent A Chokaa & another v Chengdu Guangling Kenya Company Limited & 3 others [2022] KEELC 511 (KLR)", Case Analysis (2022). Not stated in judgment (orig. Milimani ELC; suit heard at Milimani Environment and Land Court). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/511/eng@2022-01-25

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.