Assessing Kenya’S Legal Framework On Real Estate Investment Trusts (Reits): Making A Case For Mortgage Reits

Abstract

The right to a house in Article 43(1)(b) of the Bill of Rights of the Constitution of Kenya is fundamental to enable individuals live in dignity. The Constitution envisages every person having a right to accessible and adequate housing as well as reasonable standards of sanitation. However, access to the right to a house for a majority of Kenyans is elusive owing to the high cost of housing finance. This Thesis explores the viability of Mortgage REITs as an effective method of financing affordable housing in Kenya. The study acknowledges the existence of a gap in the provision of adequate housing and provides a solution towards filing this gap by assessing the suitability of mortgage REITs as a tool to access affordable housing finance by analyzing the Regulations on REITs and offering a critique on the legislative framework while at the same time appreciating the critical role of REITs. The study also identifies a gap within the legislation creating REITs in Kenya and explores the viability of that legislative gap by examining the USA legislative framework on REITs as a best practice in achieving affordable housing using Mortgage REITs. It also reviews the mortgage REITs legal framework in the United States of America. Upon analyzing the REITs legislative framework from a perspective of providing affordable housing, the study concludes by offering appropriate legislative amendments to various legislations such as the Capital Markets (Real Estate Investment Trusts)(Collective Investment Schemes)Regulations 2013 to enable the creation of M-REIT.