7. CONSTRUCTION AND MAINTENANCE
This section analyzes the particular laws and policies in the construction and housing maintenance value chain, identifies gaps and makes recommendations.
The policy and regulatory framework on construction and maintenance is found in multiple and scattered legal regimes with several implementing agencies, thereby creating overlaps and challenges in implementation. The sector is typified by many agencies that make it burdensome and expensive for actors/developers to comply. The process of acquiring construction permits from the respective agencies including occupation certificate is tedious and takes approximately 159 days and costs 2.8% of the property value.[1] The multiplicity of approvals required from a wide variety of regulatory bodies in order to proceed with a development are outlined in the table below. These complicate the delivery process, adding time and costs.
While there have been real efforts towards transformation in terms of the institutional configuration and the development of some legislation relevant to construction and maintenance, transformation has been slow. The activities of the various state agencies remain largely fragmented and uncoordinated. Further, the policy and regulatory framework has not kept up with technological and other developments in the construction process. For instance, despite changes in building materials and technologies and the need to adopt sustainable/green buildings, the relevant laws (such as the Building Code and Public Health Act) are yet to be updated. While the National Building Code exists, it is not yet operational and has gaps in terms of what the sector requires.
Regulations and policies with respect to the Construction and Maintenance component were reviewed for this study. These are summarized in Annex D with links to their original source for further reference.
Draft Construction Industry Policy, 2018
In addition, the study reviewed some laws, regulations and policies that govern professionals within the housing value chain. These are also summarized in Annex D with links to their sources for further reference.
Valuers Bill 2022 (expired)
Key gaps identified in the Construction and Maintenance component that require attention are:
GAP
RECOMMENDATION
The construction sector lacks a comprehensive and integrated framework within which to operate due to the many pieces of legislation scattered in many statutes. The scattered nature of the legislation makes it difficult for property developers to understand and comply with the requirements and creates further ambiguities that make effective legal enforcement difficult, while also encouraging corruption. For example:
Multiple institutions for approval/permitting;
Uncertainty/delays in approvals;
High submission costs;
Improper checks by the approving institution personnel;
Unqualified/lack of commitment from approving personnel and inspectors.
A draft Construction Industry Policy is currently being promoted by the Council of Governors.
A full review of the institutional, policy and regulatory framework governing residential construction and maintenance is necessary. Ultimately, this should feed into the draft Construction Policy and lead to the adoption of a comprehensive and integrated framework (preferably one single legislation and entity/institution) to govern the sector/value chain. Such a framework should include:
clear lines of responsibility to promote accountability;
the incremental roll-out of functional electronic permitting systems in county governments. Focus on the current teething problems and design challenges in the electronic permitting systems;
The use of technology to more effectively track the approval process;
While the State Department for Housing (as well as county governments) implemented a One Stop Shop framework in 2017, to consolidate all approvals and processes required in law, this is yet to be achieved.
The intentions for a One-Stop-Shop were welcome and are clearly needed. There is a need to consolidate the approval institutions and host them in a single location in order to make it possible for building approvals and site visits to be done jointly.
This rationalized organization structure should give way to only one fee being charged to a developer covering all the aspects of the various approvals and inspection.
There is currently no comprehensive legislation on consumer protection for home buyers, especially in off-plan developments. There have been cases of off plan house purchasers losing their money (deposits) after developers are unable/refuse to complete their development as contracted; do a poor-quality job or charge the property to obtain financing for construction thus exposing consumers/buyers The Sectional Properties Act 2020 touches on consumer protection under Section 43 which requires the developer to provide to the purchaser before the sale of units: the Certificate of Title or the Certificate of Lease for the unit or the parcel on which the unit is located; and any charge over the unit.
A full review of the consumer protection issues that confront consumers and undermine access to finance is necessary. From this, it will be possible to develop and enact robust legal provisions to protect consumers/buyers of off plan developments
The Kenya Bureau of Standards (KEBS)has not yet prepared standards for alternative building and construction materials. This has slowed the uptake of ABMT (Alternative Building Materials and Technologies), as developers are unable to demonstrate their acceptability.
There is an urgent need for the Kenya Bureau of Standards (KEBS) to prepare standards for alternative building/construction materials. Specific attention should be given to their contribution towards reducing costs and improving affordability.
Whilst there is in place a National Maintenance Policy, there is no maintenance manual for buildings to guide the maintenance of residential units. Developers and building managers therefore fail to attend to this critical issue, undermining building longevity and setting residents up for significant refurbishment costs. This also undermines access to finance, as lenders don’t trust that buildings will last for the term of the loan.
The building maintenance issue must be taken on as a priority by the industry. Attention to this could involve the development of building maintenance manuals, together with a dissemination programme to sensitize stakeholders on national and international maintenance standards and guidelines.
The Defects Liability Regulations 2020 were quashed by Court due to lack of public participation in the preparation. No subsequent effort has been made to address the issue. Currently the regulations are focused on commercial rather than on residential buildings. While this is a consumer protection issue, it also has an impact on access to finance as lenders cannot trust that developers will take responsibility for building quality. In other countries, a five-year warranty has become standard.
It is important to place responsibility on developers to deliver good quality buildings, and to ensure that the regulations cover all building types. A review of appropriate building regulations, drawing on international experience, should be undertaken, in support of the finalization and adoption of the existing Defects Liability Regulations 2020. The regulations should consider adequate time for defects to be observed (for example, providing 12 months for a patent defect from certificate of occupation provided by county to developer, may not cover a long duration for a home buyer who may purchase the unit several months after construction completion and move in several months thereafter. An after-sales and occupation timeframe should be considered.
Kenya’s construction industry is not transparent. Information asymmetries undermine each player at different stages in the housing delivery value chain. There is nothing in the framework governing construction and maintenance that seeks to promote transparency and access to information in the market.
By including market transparency as a value in key legislation, and by providing for the collection and sharing of data in the public domain, government can leverage the regulatory process in favour of investment in affordable housing. A concept note setting out the scope of information that might be accessed through regulatory processes could be developed to feed into the finalisation of the Housing Bill 2021, to then be implemented by the relevant State Department.
The policy and regulatory framework for construction and maintenance does not recognize the very active participation of informal builders and the incidence of incremental construction. This means that such activity cannot be regulated, and that it can also not access finance.
Explicit attention needs to be given to the role and practice of informal builders and incremental construction. A full review of the so-called informal sector in Kenya is necessary as a basis from which to draft appropriate and enabling regulations that protect consumers from poor construction quality and support the flow of finance.
Capacity constraints undermine an efficient and quality construction process. On the supply side, developers, building contractors and construction workers require focused training to ensure quality within the scope of end user affordability. On the regulatory side, regulators need to engage with the evolving nature of residential construction insofar as it includes new methods, technologies players (some informal) and new target markets.
A wide-scale assessment of human resource capacity in the building industry, both in the public and private sectors, is critically needed. This would inform staffing plans in county building authorities and recruitment of more personnel to aid in expediting approval and inspection processes, as well as the training plans of the National Construction Authority and Competency Based Training Assessment for building contractors and construction workers.
Specific training in the legal and regulatory framework is also necessary to ensure that members of staff for the various institutions, as well as developers and contractors, are each aware of their responsibilities.
There is no mechanism to ensure oversight over other acts (e.g., Water Act 2016,
Standards Act 1981, Environmental Management and Coordination Act 1999, Energy Act 2019) in the residential construction sector.
Need to streamline oversight of all other sectoral laws that are relevant to the housing sector
The key recommendations for amending/reviewing and enforcement of existing laws are:
BUILDING CODE AND STANDARDS
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APPROVALS, INSPECTIONS, AND FEES
· National Construction Authority Regulations 2014
· National Construction Authority Act 2011
· Draft Construction Industry Policy, 2018 – promoted by the Council of Governors
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ENVIRONMENTAL AND HEALTH LAWS/ POLICIES/ REGULATIONS REVIEWED
· Environmental Management and Coordination Act, No. 8 of 1999
· Environmental (Impact Assessment and Audit Regulations), 2003
· Environmental Management and Co-ordination (Water Quality) Regulations, 2006
· The Climate Change (Amendment) Act, 2023
· Public Health Act, 1921 (Cap)
· Forest Conservation and Management Act No. 34 of 2016
· Forests (Harvesting) Rules 2009
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PROFESSIONALS AND FEES
. Engineers (Scale of Fees for Professional Engineers) Rules 2022
· Architects Act & Quantity Surveyors Act
· Advocates Remuneration Order
· Valuers Bill 2022(expired)
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[1] World Bank. Programs. Economic Profile Kenya. Doing Business 2020. Comparing Business Regulations in 190 Economies.https://www.doingbusiness.org/content/dam/doingBusiness/country/k/kenya/KEN.pdf (Accessed 23 August 2022). Pg. 11
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