The Patel dam, used for irrigation and fish farming, burst its earthen banks on Wednesday evening in Solai, near the Rift Valley city of Nakuru, regional police chief Gideon Kibunjah told AFP.
The raging waters wiped out two villages, a local resident said, while power lines were swept away, leaving many without electricity. The search for victims on Thursday afternoon by heavy rains.
The dam is one of three large reservoir owned by Mr Patel, local media reported. He was, however, not there during the tragedy.
Kenya is one of the largest suppliers of cut flowers to Europe, and roses from the 3,500-acre farm of Mr Patel are exported to the Netherlands and Germany, according to Optimal Connection, its Netherlands-based handling agent, reported Reuters.
Vinoj Kumar, general manager of the farm, blamed the disaster on massive rainfall in a forest above the dam. "In the past two days the intensity of the rain was high and the water started coming down carrying boulders and roots which damaged the wall," he told Reuters. "The dam wall cracked and the water escaped."
East Africa, much of which suffered severe drought last year, has been hit by heavy rain over the last two months that has displaced hundreds of thousands of people in Kenya, Somalia, Ethiopia and Uganda.
"The search and rescue exercise is ongoing and more bodies have been retrieved. The number we have as of now is 32 people dead and several are missing," Mr Kibunjah said.
"It is a disaster because most people were asleep when the tragedy occurred and their houses were swept away."
AFP quoted him and said that 36 had been hospitalised after the tragedy.
The Kenyan Red Cross estimates that up to 500 families were affected by the disaster, which took place some 150 kilometres (90 miles) northwest of Nairobi.
Several villages were affected around Nakuru, Kenya's fourth-largest city, as well as two schools.
Nakuru lies in the heart of Kenya's fertile Rift Valley, home to thousands of commercial farms that grow everything from French beans to macadamia nuts to cut flowers, nearly all of which are exported to Europe.
The region is dotted with irrigation reservoirs built in the last two decades to meet the demands of the rapidly expanding agricultural sector, the biggest foreign exchange earner for East Africa's largest economy and a major source of jobs.
The deluge has affected large parts of East Africa, destroying crops and killing farm animals after a severe drought which had sent food prices and inflation soaring and left millions in need of food aid.
The Red Cross appealed last week for $5 million (four million euros) to help those affected.
(With input from agencies)
Get Breaking news, live coverage, and Latest News from India and around the world on NDTV.com. Catch all the Live TV action on NDTV 24x7 and NDTV India. Like us on Facebook or follow us on Twitter and Instagram for latest news and live news updates.