The High Court in Kampala has ordered the state-run National Housing and Construction Company (NHCC) to refund Shs 40 million to a couple after ruling that the developer unlawfully cancelled their purchase agreement for a condominium unit in Naalya. The National Housing refund ruling also includes Shs 20 million in damages for breach of contract.
Justice Patience T.E. Rubagumya of the Commercial Division found that NHCC wrongfully terminated a 2011-era sale agreement with Dr René Bakashaba and Ann Bakashaba, who had paid deposits toward an apartment at Naalya Pride Apartments Phase 2. The judge ruled that the company failed to follow the agreed payment schedule and demanded full payment without notifying the buyers of construction milestones.
“The demand for the outstanding amount in a lump sum was contrary to the payment plan and made without informing the plaintiffs of construction progress,” Justice Rubagumya stated in her electronic ruling delivered via the judiciary’s ECCMIS system.
National Housing Refund Ordered After Contract Breach
The dispute originated in 2011 when the Bakashabas paid 10% of the UShs 240 million purchase price for Unit A12. After years of delay, NHCC allowed them to shift to Unit I22 in 2013 under new terms requiring a 20% down payment within two weeks. Construction concluded in 2019, and the company demanded the remaining Shs 216 million.
The couple sought mortgage financing through Y-Save Co-operative and paid an additional Shs 16 million in February 2020. However, NHCC had already sold the flat to another buyer without informing them. The National Housing refund decision emphasized that accepting further payments and allowing a valuation proved the contract was still valid when NHCC unilaterally withdrew the offer.
Justice Rubagumya held that the developer’s cancellation and sudden demand for lump-sum payment breached the agreement, stressing that developers must respect payment schedules and provide notice before rescinding contracts.
Court Awards Refund and Damages
The court declined to compel NHCC to return the sold flat or provide a replacement at the old price, noting that it would amount to unjust enrichment. Instead, it ordered the company to refund Shs 40 million with 24% annual interest from the date of filing, and to pay Shs 20 million in general damages with 6% interest, along with half the legal costs.
The National Housing refund ruling serves as a warning to Uganda’s real estate developers, particularly government-linked firms, to uphold transparency and fairness in off-plan housing deals. Breaches of contract, the court ruled, undermine public confidence in the sector and violate buyers’ rights under Uganda’s property and commercial laws.
National Housing has yet to issue an official statement on the judgment.
