Ever felt that sinking feeling when you realize your property might be auctioned off?

It’s a nightmare scenario for any homeowner.

But don’t panic just yet.

Let’s take a step-by-step approach to stopping the auction of property in Kenya and get you back on solid ground.

Why Auctions Happen in the First Place

First things first, let’s understand why auctions even happen.

Usually, it boils down to unpaid debts.

Think defaulted loans, mortgages, or even unpaid rent.

When you can’t keep up with payments, creditors might resort to auctioning your property to recover their money.

Early Signs to Watch Out For

Ignoring the problem won’t make it go away.

Here are some red flags that an property auction in Kenya might be looming:

• Missed payments: This is the most obvious one. Consistent late or missed payments on loans or rent are a surefire way to attract unwanted attention.
• Demand letters: Creditors usually send formal demand letters before taking drastic action. Don’t ignore these! They outline the outstanding amount and the consequences of non-payment.
• Auction notices: This is the final warning. Auctioneers are legally required to issue a notice with details of the auction, including the date, time, and location.

What is the law of auction in Kenya?

Before we look at the process to stop property auction in Kenya, let’s understand the process.

See, the law governing auctions in Kenya is primarily encapsulated in the Auctioneers Act, Cap 526, which outlines the legal framework for auctioneers and the processes involved in conducting auctions.

Here are the key aspects of the law:

Auctioneers Act

The Auctioneers Act establishes the licensing and regulatory framework for auctioneers in Kenya.

It prohibits unlicensed auctioneering and sets out eligibility criteria for obtaining a license, including good character and relevant experience.

The Act mandates that auctioneers conduct their operations according to specific rules and regulations to ensure fairness and transparency during auctions.

Auction Process in Kenya

Notification and Advertising

Auctioneers are required to give a 45-day notice before conducting an auction, allowing debtors an opportunity to redeem their properties.

This notice must be publicly advertised through various channels, including newspapers and online platforms.

The advertisement must include critical details such as the time, date, location of the auction, and conditions of sale.

Conducting the Auction

On the day of the auction, the auctioneer explains the rules and terms to participants. Bidding begins with registered buyers placing bids on properties.

The auctioneer must ensure that all participants are treated equally, with no preferential treatment given to any bidder.

Successful Bidding

A property is declared sold when a bid meets or exceeds a predetermined reserve price.

The winning bidder is then required to complete payment as per the auction terms.

Legal Compliance

Auctioneers must maintain meticulous records of all transactions, including bidder registrations and final sale prices, to ensure transparency and facilitate dispute resolution if necessary.

The law prohibits auctioneers from engaging in dishonest or immoral conduct during auctions, ensuring that all actions taken are lawful and ethical[4].

Charges and Fees

The Auctioneers’ charges for services such as attachment or repossession are regulated under specific fee bands defined in the Fourth Schedule of the Auctioneers Act.

For instance:

• 10% for amounts up to Kshs. 100,000
• 5% for amounts between Kshs. 100,001 and Kshs. 1,000,000
• 2% for amounts exceeding Kshs. 1,000,000.

Stopping the Property Auction in Kenya: Your Action Plan

Now, let’s get to the heart of the matter – how to stop auction of property in Kenya. Here’s your game plan:

1. Communicate with Your Creditor:

This is your first and most crucial step.

Reach out to your creditor immediately.

Explain your situation honestly and explore possible solutions.

They might be willing to negotiate a repayment plan, offer a grace period, or even restructure your loan.

Remember, communication is key.

2. Explore Legal Options:

If direct negotiation fails, it’s time to lawyer up. A good lawyer can:

• Negotiate on your behalf: They can leverage legal expertise to negotiate better terms with your creditor.
• Challenge the auction: If the auction process has irregularities, your lawyer can challenge its legality in court.
• Buy you time: Legal action can sometimes delay the auction, giving you more time to find a solution.

3. Clear Your Debt:

Ultimately, the most effective way to stop the auction is to clear your debt.

This might seem daunting, but explore all your options:

• Sell the property yourself: This gives you more control over the sale price and allows you to settle your debt.
• Refinance your loan: Consider refinancing with another lender who might offer better terms.
• Borrow from friends or family: If possible, seek financial assistance from your network.

4. Understand the Auction Process:

Knowledge is power.

Familiarize yourself with the auction process in Kenya.

This includes:

• Types of auctions: Distress for rent, court judgment, or realization of property (like mortgages).
• Notice periods: These vary depending on the type of auction.
• Auctioneer’s rights and responsibilities: Understanding these can help you protect your rights.

5. Act Fast:

Time is of the essence.

The sooner you act, the more options you have.

Don’t wait for the auctioneer to show up at your doorstep.

Preventative Measures: How To Stay Ahead of the Game

Prevention is always better than cure. Here are some tips to avoid facing property auction in the future:

• Budget wisely: Track your income and expenses to ensure you can meet your financial obligations.
• Build an emergency fund: Having a financial safety net can help you weather unexpected storms.
• Prioritize debt repayment: Make timely payments on all your loans and debts.
• Seek financial advice: If you’re struggling financially, don’t hesitate to seek professional help.

FAQs about Stopping Property Auctions in Kenya

Can I stop an auction at the last minute?

It’s possible, but it’s much harder. Your best bet is to act early and explore all your options.

What if I can’t afford a lawyer?

Legal Aid organizations in Kenya offer free or low-cost legal services.

What happens to my belongings if my property is auctioned?

You’ll need to remove your belongings before the auction. The auctioneer might dispose of any remaining items.

The Bottom Line

Facing the auction of your property is stressful, but it’s not the end of the world.

You can stop the auction and protect your home by understanding the process, acting quickly, and exploring all your options.

Remember, communication and legal assistance are your best allies.

So, are you ready to take control of your situation and fight for your property?

Read also:

• Selling Your Property in Kenya, A Step-by-Step Guide from iRentlist
• How to Sell a House in Kenya (Fast And Painless)