Housing Finance Corporation Central Business District branch./COURTESY PHOTO

Housing Finance Corporation has been barred from selling or transferring a developer’s property over a Sh74 million loan.

Justice Josephine Mongare stopped the mortgage financier from or interfering with the ownership of the property Achuka County Estates, pending conclusion of the case.

“I am persuaded that a sale of the charged property will greatly prejudice the Plaintiff. In any event, should HFC ltd succeed in the end, the security will still be available as the said legal charge remains intact and in place until the full determination of the suit herein,” ruled the judge.

The judge said she was convinced that the balance of probabilities tilted in favour of the Achuka County Estates since the land in question is under charge.

“It is therefore impossible for Achuka County Estates since to deal with the land at the expense of HFC ltd until the suit herein is heard in full,” ruled the judge.

The ruling developer moved to court seeking to stop the sale or interfering with the ownership of title or interest in the property known as L.R. No. 155/89, 155/93 and 155/15.

While it is not disputed that the Achuka Estate was advanced loan facility for Sh74 million secured by a legal charge, Achuka Estate argued that the same has been fully recovered through a sale of the several units at a price of Sh.138 million.

It was Achuka’s position that the lender has fully recovered the amount advanced including the interest and all charges associated with the loan.

The estate argued that HFC move to advertise for sale the three properties is illegal as the loan has been fully redeemed and therefore the same will greatly prejudice the Estate.

The lender argued that it is within its right to exercise its power of sale to recover the loan balances despite the purported attempt by the Estate to withdraw another suit.

While acknowledging that the loan advanced to Achuka Estate was Sh.72 million and that pursuant to a deed of settlement in the said suit HFC ltd has recovered a substantial portion of the loan, HFC ltd refutes the allegations by Achuka Estate that the loan plus accrued interest if fully discharged.

The lender reiterated that the estate is still indebted to the lender and that the loan account maintained by the lender for the Achuka still reflects a substantial unpaid balance and therefore the lender is within its legal rights to dispose of the charged securities to recover the same.