The regulatory environment of real estate professional services firms (PSFs) in Kenya

Abstract

PurposeThis paper brings up the regulatory environment for valuation and estate agency practices in Kenya. Its main purpose is to assess the regulatory institutions to determine whether consumers of real estate services are protected from risks in the property market and to compare Kenya's situation to other markets in the world.Design/methodology/approachThis is a qualitative study of institutions including bodies and laws that are involved in the regulation of valuation and estate agency practices in Kenya, using document analysis method. The roles of professional body, the Institution of Surveyors of Kenya and the registration bodies, the Valuers Registration Board and the Estate Agency Registration Boards and attendant statutes, the Valuers Act and the Estate Agents Act are reviewed to gain insights into the regulation practice in Kenya. Benchmarking is done using regulatory practices in the United Kingdom and the USA.FindingsConcerning valuation, Kenya uses a hybrid system combining the United Kingdom's self-regulation approach and the USA's state regulation approach. The co-regulation approach is working well for valuation practice in Kenya. On the other hand, the regulatory system for estate agents is weak because of limited powers of enforcement, thereby allowing an unknown number of agents to practise outside the regulatory framework.Originality/valueThe paper is unique in its subject matter as it evaluates the external organization (regulatory) environment of professional services firms (PSFs) in the real estate market. Existing studies have been done mainly by management scholars focussing on the internal organization environment of PSFs in general. Secondly, the study brings up to the international audience the regulatory system and practice in the real estate professional services market. This has not been done for Kenya and perhaps for many other countries. Lastly, it makes a novel recommendation that emphasis should be placed on registration and regulation of PSFs rather than individual practitioners to enhance quality in the provision of services where real estate agency is concerned.

What is real estate? Five ontological questions for the discipline

“…ISIC is a "reference classification" standard, meaning that in the international family of economic and social classifications, NACE is its derivative (derived classification) hence, "categories at all levels of NACE are defined either to be identical to, or to form subsets of, single ISIC categories" (Eurostat, 2008, p. 41). The three publications were then treated to standard QDA method (see Altheide, 1996;Altheide et al, 2008;Bowen, 2009;Wach and Ward, 2013;K'Akumu, 2022). Justification for the use of QDA method can be found in Max Weber's book, Economy and Society, where he made the argument that documents form a field for research in their own right, and for this reason, they should not be considered as complementary approach to knowledge generation (Weber et al, 2013).…”

“…At the onset of this section, it is important to make a critical observation that research in real estate is dominated by empiricism thus it fits well into the claims of methodological orthodoxy in built environment research (Seymour and Rooke, 1995; Raftery et al ., 1997; Runeson, 1997; Rooke et al ., 1997; Seymour et al. , 1997; 1998; Dainty, 2008; Tembo and Akintola, 2022; K'Akumu, 2022). However, it is important to note that, in any discipline, not everything can be researched through empiricism or causal research designs.…”

“…Hence, prescribing empiricism as standard epistemology in real estate research is a critical limitation to knowledge building in the discipline. In response to this, K'Akumu (2022) advocated for qualitative research applications in real estate studies through the use of QDA method. Consequently, this study applies rationality as an alternative epistemology in real estate research through reflexivity-based QDA procedures.…”

Assessing Capture Risks in the Regulatory Mechanism: Insights from Kenya’s Regulation of Professionals in the Construction Labour Market

“…Conventionally RIA involves application of benefit–cost analysis based on social welfare objectives like public interest (Malyshev 2006) however qualitative methods, also, may be used (Ladegaard 2005). In this study, as proposed by O’Leary (2017) and K’Akumu (2022a), we use QDA as an analytical method to evaluate the statutes intended to regulate architects, engineers, and quantity surveyors in Kenya. In this context we observe every clause of each statute against the analytical question: To what extent does it engender the risk of regulatory capture?…”

“…This article undertakes, according to Bowen (2009), O’Leary (2017) and K’Akumu (2022a), a qualitative document analysis (QDA) of the existing regulatory laws and agencies dealing with professionals involved in construction projects. Its primary objective is to establish the risk of capture by regulators.…”