Prime
The Ovino Mall dispute: Who is to blame ?
Located in one of the busiest parts of the Kampala City, Ovino Mall was once a model of progress for all stakeholders. Photos/Tony Mushoborozi
What you need to know:
- Located in one of the busiest parts of the Kampala City, Ovino Mall was once a model of progress for all stakeholders. The property, however, has fallen into significant disrepair following years of neglect. Not only is it an eyesore but it is also a cause for concern to the neighbourhood.
If you have been in Kisenyi, downtown Kampala, recently, you must have noticed the concerning state of Ovino Mall. Constructed almost 17 years ago by Tirupati Developments Uganda, the mall was supposed to offer affordable, quality space for its owners.
However, the mall has since fallen into shocking disrepair, while condo owners and the developers are embroiled in an ongoing dispute. The 150 co-owners of the 350 units in the commercial condominium property are accusing the developers of taking monthly management fees and refusing to use the money for its stated purpose, grabbing the common areas for personal use and constructing a new floor on the roof without their consent.
They are therefore, demanding the developer to hand over the building to them for proper management as provided by the condominium Act of 2001. The law stipulates as follows: “When a developer registers a condominium plan, the developer shall:
(a) Within ninety days after the day that fifty percent of the units are sold; or
(b) Within one hundred and eighty days after the day that the first unit is sold, whichever is sooner, convene a meeting of the corporation at which a board shall be elected.”
According to the owners of Ovino Mall, the developer has never called for such a meeting in the 14-year lifespan of Ovino Mall. They admit they didn’t know the law when they bought the condos but once they saw that the building was falling into disrepair, they took it upon themselves to know the law so that they could cause the developer to follow it.
Simon Waibale, the chairman of the owners association, say he called a meeting of all unit owners in 2019 and a consensus was reached that the developer should hand over the daily management of the property.
Waibale adds, “We wrote to the developers through our lawyer, informing them to handover the building to us as per the law but he ignored us. We wrote to them again about two years ago and they still ignored us.”
Tirupati opened the Ovino Mall parking space to the public, leaving no space for shoppers to park, according to tenants and owners. Photos/Tony Mushoborozi
Among other things, the letters were instructing the developers to cause the convening of a meeting of owners to form the corporation of owners and handover the building officially which includes handing over the land title (master title) and the blue prints of the building. They also informed the developer that the building was falling into disrepair and they demanded to have the accountability for the monthly management fees and the income earned from the common areas such as the parking lot and public toilets.
Illegal new storey
The latest cause of contention now, is Tirupati’s construction of an extra floor on the roof of one of the blocks without the owners’ permission. This is not only illegal, but it also compromises the structural integrity of the building.
“The developers treat the building as if it still belongs to them and we are just tenants, not owners,” one angry owner said.
Disrepair
The condo owners claim for the entirety of its existence, it has never received any sort of renovation or maintenance. Currently, there are visible gaping cracks in the walls, trees are growing along sewer lines on the walls, paint has rotten and is peeling off in many places, frayed and rotting posters can be seen everywhere and the building resembles a 50 year old abandoned building in some sections.
For this reason, the value of the building has gone down. The owners claim that if Tirupatti had caused the formation of the society just as the law mandates, then the owners would have elected a committee to manage the building using all the money they pay every month.
One owner says that he brought a valuer soon after buying his unit 12 years ago who estimated the unit to be worth about Shs45m. When he recently brought another one to assess again and the same unit was valued at Shs55m, which the valuer says should have by now have appreciated Shs100m today, had the property been properly maintained.
“There is no way a property in such a prime area can only appreciate by 10 percent in 10 years. It makes no sense. A property should be doubling in value every seven years,” the condo owner notes.
Dilapidated walls and peeling paint is a worry for owners.
Lack of occupancy
Due to the state of the property, many units are locked and unoccupied because when prospective tenants view them, they get disappointed and leave without making an offer. The owners says that the only people agreeing to rent are those that are currently struggling and not able to pay the right rental amounts.
“When the building was new, the first tenants paid Shs200,000 in monthly rent but because the building has deteriorated over the years, tenants still pay the same amount. No tenant wants to pay more than that,” another owner revealed.
“Tirupati makes approximately Shs10m a month from the parking lot and about Shs2m from the public toilets. Every tenant pays Shs50,000 a month as management fees. In the right hands, this money would have kept the property in perfect condition. But the collections are not being applied to their purpose which is maintaining the building and we are worried that the building will soon be condemned,” one owner said.
Intervention
The owners in trying to pursue legal action against the developers, they were informed by a lands officer that their association as it is does not prove ownership of the property. They were advised to register their interest on the title in the lands registry. So they are currently in the process of registering themselves as the owners of that master title and plan, with proof of the unit titles.
“Once the process is complete, we will finally have a legal hold on the title. Our considered view is that we will officially serve the Tirupati management a notice of eviction. In the event that they refuse to leave the premises, then we shall go the legal route,” says Waibale.
The plan
The owners want true ownership of the property so they can make the necessary renovations in order to improve its value. The renovations will include a face lift, repainting and proper signage. That way, they will not only attract shoppers but also renters.
“The first would be to use the management fee and the other fees from the common areas to correct the parking issue. Instead of filling the parking lot to the brim with cars from outside, we would love to see only 50 cars in the parking, leave the rest of the parking space for the shoppers.
As it stands now, there is no parking space for shoppers because the developer only cares about how much they can make from parking fees. They forgets that less and less shoppers are coming because of lack of parking space. This contributes to devaluing the property,” Waibale says.
Plants growing along sewer lines at Ovino Mall.
Plea to government
Some owners believe that government’s tendency to give foreign investors preferential is not only hurting the economy but it is also discouraging local investors from participating. They believe that one of the reasons that Titupati is adamant is because they know that the government is always on their side no matter what.
“We took a leap of faith and agreed to come together and buy this property so that we could also have a chance to own property in the city centre. We were confident that the would protect our investment. That the public could legally own titled units developed by someone else. But now it looks as if the developers are refusing to follow the law, putting our investment at risk. What should we do? This is one of the oldest condominium buildings in Uganda and it is not working at all. This is discouraging and its impact is bound to be extensive,” Waibale says.
What you need to know prior to buying a condo
Cissy Namaganda is a property expert whose company, Cinam Constructors, has constructed several condominiums for different investors. She notes that beyond that general concept, there are a host of laws, rules and regulations that govern condominiums. One of those is payment of monthly service fees that come with owning a condo.
These fees are required of all the co-owners of the condos for the day-to-day running of the property such as security, power and water, cleaning and garbage collection.
Making an effort to understand how these how those figures are arrived at and how they are accounted for will save you so much stress and regret.
A new floor being built illegally on one of the blocks.
Buying a new condo
Most new condominiums are often put up for sale before their construction has been completed or even begun. This means that you may have to select your unit from a floor plan blueprint.
Condo fees
Condo fees are billed to the co-owners each month. They are used to:
Pay for the regular maintenance of common areas.
Cover administration costs. Some buildings are managed by private companies that are paid for their services.
Paying insurance premiums on the building and contribute to a self-insurance fund.
Build up the reserve fund: This is a contingency fund for the building. Co-owners contribute to this account in case major maintenance work (such as roofing or unforeseen repairs) is needed.
