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SBM Bank blocked from selling home of separated couple
A court has stopped SBM Bank from auctioning a matrimonial house owned by a separated couple over Sh36 million debt.
A court has stopped the SBM Bank from auctioning a matrimonial house owned by a separated couple in Nairobi after the judge found that the lender failed to notify the woman about the intended sale.
Justice Alfred Mabeya said there was no evidence to show that the woman, Immaculate Njeri, received the statutory notices for sale of the property as required by law.
Outstanding debt
The bank wanted to sell the property in Tulip Villas Convent Road over an outstanding debt of Sh36 million.
The property owned by Ms Njeri and Stephen Kinuthia had been used as security of a Sh50 million loan advanced to Makaazi Management Company Limited in December 2017.
Justice Mabeya said the court could not ascertain that Ms Njeri received the notices for the intended auction and letters informing her the borrower was in default. He added that Ms Njeri stood to suffer irreparable loss since the suit property is her matrimonial home where she resides with her children.
“Ms Njeri has shown that her marriage with Mr Kinuthia broke down therefore it is possible that she was kept in the dark on the financial distress that Makaazi Management Company Limited was in by her husband,” ruled the judge while stopping the bank from interfering with the property.
The ex-spouses stood as the company’s guarantors to the loan and a charge was registered over the suit property which is jointly owned by them, court papers indicate.
The borrower failed to meet the agreed payments towards servicing the loan in June 2020 leading to the recalling of the loan facility immediately.
As at June 8, 2020 the outstanding loan amount was Sh36,132,042 and the bank wanted the same paid within 90 days.
Ms Njeri moved to court to stop the intended disposal of the house after the bank advertised the suit property for sale by public auction in exercise of its statutory power of sale.
She said the sale was unlawful since she had not been notified as a guarantor. She added that the bank failed to give her notice of the alleged default by the principal debtor (Makaazi Management Company Limited).
Ms Njeri further alleged that the statutory notice or the redemption notice were not brought to her attention in violation of her rights as a guarantor.
She stated that the suit property was her matrimonial home and she stood to suffer irreparable loss as she would be rendered homeless if the sale is not suspended.
For its part, the bank maintained that it had notified her through various letters dated June 8, 2020 and January 6, 2021 in which she was informed of the intention to sell the property if the loan amount remained in arrears.
Quantifiable asset
In the ruling, the court held that Ms Njeri had established a strong case against the bank, the company and Mr Knuthia. The judge said that even though the notices were properly addressed there was no proof that the letters were stamped and posted.
He declined the bank’s argument that the property was a quantifiable asset and that it was willing to compensate Ms Njeri if the court required it to do so.
“There is no doubt that the bank would be able to compensate Ms Njeri if the court were to decide, upon conclusion of this case, that the sale of the suit property was unlawful. The court is of the opinion that a matrimonial home holds special importance and that Ms Njeri would suffer irreparable loss if it is sold prior to a final determination of this suit,” said Justice Mabeya.
