Alice Indakwa Omuholo t/a Victorious Fashion Designs v Esther Njeri & Sannex Enterprises [2021] KEBPRT 479 (KLR)

REPUBLIC OF KENYA

IN THE BUSINESS PREMISES RENT TRIBUNAL

VIEW PARK TOWERS 7TH & 8TH FLOOR

TRIBUNAL CASE NO. 879 OF 2020 (NAIROBI)

ALICE INDAKWA OMUHOLO

T/A VICTORIOUS FASHION DESIGNS....APPLICANT/TENANT

VERSUS

ESTHER NJERI............................1ST RESPONDENT/LANDLORD

SANNEX ENTERPRISES....................2ND RESPONDENT/AGENT

RULING

BACKGROUND

The Tenant/Applicant filed an application on 2nd November, 2020 seeking for orders restraining the Respondents from proclaiming, attaching, moving or dealing with their tools of trade or evicting her from the suit premises pending the hearing and determination of the suit. The Tenant/Applicant also sought leave to pay the rent for November and October on or before 10th November, 2020 and stated that she was willing to clear the outstanding rent arrears of KShs. 60,000. 00 through monthly installments of KShs. 5,000. 00 beginning on 15th December, 2020 and thereafter on or before every 15th day of each subsequent month until fully paid.

The Landlord/Respondent through a Replying Affidavit dated 18th December, 2020 responded and in doing so disputed that the outstanding rent arrears is not KShs. 60,000. 00 as alleged by the Tenant/Applicant and stated that according to their records the outstanding sum was KShs. 96,500. 00 and that they were not in receipt of any proposals from the Applicant/Tenant as to how the arrears would be cleared. The Landlord/Respondent stated that as at 15th December, 2020 the Tenant/Applicant had only paid KShs. 10,000. 00 and not KShs. 15,000. 00as they had claimed before the Tribunal. The Landlord/Respondent averred that on 18th December, 2020,they offered the Tenant/Applicant a proposal to clear the arrears in monthly installments of KShs. 12,000. 00 however this amount was reduced to KShs. 10,000. 00 however, the Tenant/Applicant rejected the Landlord’s offer with a counter offer of KShs. 5,000. 00 which the Landlord/Respondent rejected.

The Applicant/Tenant in their reply dated 26th January, 2021 stated that at the time of filing the application, they were in arrears of KShs. 60,000. 00 at the time of filing the application and further averred that since then they have paid rent for November to December 2020 and January 2021 and therefore the arrears are KShs. 45,000. 00. The Landlord/Respondent in their Further Affidavit dated 4th February, 2021 stated that as at 4th February, 2021, the Applicant/Tenant’s rent arrears was KShs. 111,500. 00inclusive of the rent for February 2021 and disputed the payment of KShs. 30,000. 00claimed to have been deposited by the Applicant/Tenant stating that there is no evidence of the payment.

Both parties submitted their respective payment schedules before the Tribunal and according to the Landlord/Respondent’s Schedule, the Tenant’s paid up rent for the year 2020 is the sum of KShs. 104,500. 00 and according to the Applicant/Tenant’s schedule indicates that the paid up rent for the year 2020 is the sum of KShs. 135,00. 00 and the payment of KShs. 30,000. 00 in the month of January 2021 was disputed. According to the Landlord/Respondent’s Schedule, the rent arrears owed by the Tenant/Applicant are the sum of KShs. 81,500. 00 whereas the Tenant’s Schedule indicates that the arrears is KShs. 45,000. 00.

TENANT’S AND SUBMISSIONS

During the hearing on 28th January, 2021 the Tenant/Applicant submitted that she had paid rent up to January, 2021 and that the arrears stood at KShs. 45,000. 00and stated that she relies on her Affidavits. She further requested the Tribunal to allow her to continue paying the normal rent by making monthly payments of KShs. 5,000. 00per month until all the payments have been made in full.

During the hearing on 12th February, 2021, the Tenant/Applicant submitted that she can only afford to pay KShs. 5,000. 00per month.

LANDLORD’S SUBMISSIONSDuring the hearing on 28th January, 2021, it was submitted on behalf of the Landlord/Respondent submitted that the rent arrears as at 15th December, 2020 was KShs. 81,500. 00and stated that the Tenant was directed to pay KShs. 10,000. 00 per month to clear the arrears and her counter offer was KShs. 5,000. 00 which was not acceptable. Counsel further submitted that the Tenant/Applicant did not present any evidence of the payment of KShs. 30,000. 00alleged to have been made in January and presented the following prayers to the Tribunal:

i. That all the outstanding rent arrears be cleared within 30 days failing which the Landlord exercises distress for rent;

ii. That the costs of the application be borne by the Tenant;

iii. That the rent arrears outstanding are KShs. 96,520. 00 without taking into account the KShs. 30,000. 00 alleged to have been paid by the Tenant.

During the hearing on 12th February, 2021, Mr. Odongo for the Landlord/Respondent submitted that the arrears as at December, 2020 were KShs. 81,500. 00 and there had been discussions with the Tenant/Applicant and she was given a proposal to pay KShs. 12,000. 00 per month and this was later reduced to KShs. 10,000. 00however she stated that she can only afford KShs. 5,000. 00 but stated that the Landlord/Respondent no longer wanted the KShs. 10,000. 00 but KShs. 15,000. 00.

ISSUES, ANALYSIS AND DETERMINATION

Bearing in mind the dispute as pleaded, the evidence presented before the Tribunal and the submissions made by the parties, I find that the following are the issues for determination by the Tribunal:

i. Whether there was a controlled tenancy between the parties;

ii. Whether the Landlord/Respondent followed due process in distress for rent;

iii. Whether the Tenant/Applicant should be allowed to pay the arrears in installments and if so of what amount.

Under Section 2(1) of the Landlord and Tenant (Shops, Hotels and Catering Establishment) Act a controlled tenancy is defined as a tenancy of a shop, hotel or catering establishment which has been reduced into writing and which is for a period not exceeding five years. In this case there is a Tenancy Agreement that was presented to the Tribunal and in the Agreement it is stipulated that it is for a period of three years, therefore it is evident that it is a controlled tenancy.

From the Tenant/Applicant’s Application dated 2nd November, 2020, the primary reason for the same was to counter the Landlord/Respondent’s claim for rent arrears and the Landlord/Respondent had already began exercising distress for rent to obtain the same.

The Tenant/Applicant sought orders that the Landlord/Respondent be restrained from evicting them and the basis of this was that they acknowledge the fact that they have rent arrears and are willing to settle the same.

On the issue of whether the Landlord/Respondent followed due process in distress for rent I find that they did as pursuant to Section 3 of the Distress for Rent Act:

“any person having any rent or rent service in arrears and due upon a grant, lease, demise or contract shall have the same remedy by distress for the recovery of that rent or rent service as is given by the Common Law of England in a similar case.”

Therefore, this right serves the purpose of a remedy for the Landlord/Respondent to recover rent that is in arrears and in the present case it has been established that there were arrears a fact that has been admitted by both parties although the exact sums are disputed. The Tenant/Applicant was notified of the default but she failed to honor the same and the Landlord/Respondent then instructed auctioneers to levy distress for rent and therefore due process was followed.

The undisputed fact in this case is that the Landlord/Respondent is claiming rent arrears for premises that they have let out in order to earn an income from it. It would therefore be inequitable to allow the Tenant/Applicant to do business in the premises and continue delaying the payments. However, the Tenant/Applicant has expressed their willingness to pay the arrears through monthly installments and the Landlord/Respondent is not opposed to the same.

The Tenant/Applicant is to continue paying monthly rent as and when it falls due failure to which the Landlord/Respondent is free to distress. Both parties have submitted schedules and indeed from both schedules, rent paid in 2020 totals KShs. 105,000. 00less annual rent of KShs. 180,000. 00 this leaves a balance of KShs. 75,000. 00payable as at last year. The Tenant offers to pay KShs. 5,000. 00per month to offset the arrears and the Landlord/Respondent is agreeable to KShs. 15,000. 00 minimum over and above the monthly rent.

Therefore, having considered the circumstances in which the arrears arose and the plea by the Tenant/Applicant as to the economic situation, I find that the Tenant/Applicant should pay monthly installments of KShs. 12,500. 00 per month until settlement of the arrears. Each party should bear their own costs.

DATED, SIGNED AND DELIVERED THIS 19TH DAY OF MARCH 2021

ANDREW MUMA

VICE-CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL