Repossession of Goods or Chattels in Kenya
The repossession process does vary depending on the agreement between the parties(the Chargor (the person who owns the property being charged) and the Chargee (the lender in whose favour the Charge is created). In certain instances there will be 3 signatories to the Charge as is the case where the Chargor (the owner of the property over which a Charge is to be created) and the person to whom the funds are lent (borrower) are distinct persons and are hence required to execute the charge together with the Chargee) made at the time of the lease or hire purchase agreement, or loan/other agreement between parties. Title in the property is transferred back to the creditor as a result of a breach of contract. For leases title is not transferred until the completion of the lease, a chattel mortgage grants title to the owner, but a security is held over the goods - this security is the basis of the repossession for failure to pay. Any interest in the property by the debtor is destroyed by the process of a Public Auction.
Procedure in Repossession of Goods or Chattels
On receipt of instructions from the instructing officer to repossess a property, it is usually an immediate demand for payment, if the debtor fails to pay the full amount due, the property is repossessed after 7 days from the date of Proclamation. The property is normally held for a set period within which it will be advertised for Public Auction and sold after 7 days, after advertisement appearance in the Daily Newspapers as per The Kenya Auctioneers Act, or a period as set down in the documentation of Repossession, and then sold at Public Auction to recover monies owed.A court application may be made which shortens or states the time for which the property is held. During this time the debtor may pay restitution (including monies owed, interest, fee's associated with the repossession and cost of storage), and recover their goods.
For hire purchase arrangements there are statutory requirements to be met before an Auctioneer can repossess the item.
An auction will not generally receive the same value as a shopfront sale - when talking about good and chattels - including motor vehicles auctions receive lower prices. The seizure of a car is probably the most common form of Commercial Agent seizure.If the auction fails to gain sufficient funds to cover the debt the difference is still the responsibility of the debtor.
Other forms of repossession include as the result of a court order, or as part of the winding up process undertaken during foreclosure or bankruptcy action.
Our services have been of great value to:-
- Motor Vehicle and other heavy Machinery dealers
- Credit Companies
- Hire Purchase Companies
- Chattel Mortgage Companies
- Tenant Purchase Scheme Organizations
- Furniture dealers
- Banks and Financial Institutions
Lolwe Auctioneers boast a team of experienced staff who will collaborate with your credit department to ensure that accounts placed with us are dealt with within the shortest practicable time and to a logical conclusion.
In the matters of repossessions, being a Class"B" Licensed Auctioneers in Kenya, we are Licensed by the Auctioneers Licensing Board of Kenya, to repossess any chattel mortgage throughout the Republic of Kenya.
Our fee's, and transport fee's, on repossession are regulated by the Auctioneers Act and Rules and are generally paid from the Auction sales proceeds after the Auction, if insufficient funds are generated from the Auction, then the judgement debtor or the instructing officer shall become liable for costs or the balance thereof.