The Supreme Court of Kenya has dismissed a bid by Housing Finance Company (K) Limited to stop Faith Wanjiru, the administrator of the estate of the late Harrison Charles Kimeriah, from pursuing an appeal in a 46-year property battle. The court's decision allows the appeal to proceed, which will examine lenders' powers and actions when a borrower dies before a mortgaged property is sold. The case has significant implications for thousands of borrowers across the country.
The dispute originates from a Sh500,000 loan advanced to Kimeriah in July 1980, secured by a charge over a property in Nairobi. Kimeriah repeatedly failed to service the facility, and despite a consent agreement in 2000, he died in January 2005 before the loan was fully repaid. Housing Finance later sold the charged property by private treaty for Sh10 million, which was challenged by Kimeriah's widow. She claimed the property and its developments were worth Sh150 million and that the lender had failed to maintain the agreed insurance and serve required notices.
The High Court in Nairobi ruled in favor of Kimeriah's widow on November 30, 2023, finding that the loan had been fully repaid and awarding her Sh150 million, plus costs and interest. However, the Court of Appeal overturned the High Court judgment on July 4, 2025, and dismissed the suit. The appellate court found that the borrower had defaulted and that Housing Finance's power of sale had accrued. The court also rejected the High Court's finding that Housing Finance had an overriding duty to keep the property insured after default.
The Court of Appeal's decision was challenged by Ms. Wanjiru, who sought certification to appeal to the Supreme Court. On May 15, 2026, the Court of Appeal granted permission, identifying two questions concerning deceased borrowers and mortgage insurance. Housing Finance moved to the Supreme Court, arguing that the dispute was private and did not raise a question of general public importance. However, the Supreme Court rejected this challenge, holding that the certified questions had been canvassed in the lower courts and had a foundation in law.
The Supreme Court found that the questions concerning the processes that may arise upon the intervening death of a chargor and the purpose and effect of an insurance cover have a significant bearing on the public interest. The court noted that these issues affect thousands of borrowers across the country and implicate consumer protection, transparency, and accountability in financial institutions. The court dismissed Housing Finance's request and upheld the Court of Appeal's certification ruling.
The appeal is expected to address and examine what a bank must do before selling property used as security for a loan when the borrower has died, and whether the bank must first deal with any insurance taken out with the loan. The judges are also expected to examine whether a bank must follow additional steps before selling such a property. The court's decision will have far-reaching implications for lenders and borrowers in Kenya.
The Supreme Court's verdict has paved the way for an appeal that will have significant implications for the banking industry in Kenya. The court's decision to allow the appeal to proceed will provide clarity on the powers and actions of lenders when a borrower dies before a mortgaged property is sold. The case will also examine the legal and evidentiary obligations and requirements of a charge with respect to an insurance policy taken in relation to the loan facility.
Key points
- The Supreme Court's decision allows an appeal to proceed, examining lenders' powers when a borrower dies before a mortgaged property is sold.
- The case has significant implications for thousands of borrowers across Kenya, implicating consumer protection, transparency, and accountability in financial institutions.
- The appeal will examine what a bank must do before selling property used as security for a loan when the borrower has died.
