Crested Sea Agencies v Tangaza University College [2025] KEBPRT 184 (KLR)

Crested Sea Agencies v Tangaza University College (Tribunal Case E810 of 2024) [2025] KEBPRT 184 (KLR) (23 January 2025) (Ruling)

Neutral citation: [2025] KEBPRT 184 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E810 of 2024

M Makori, Member

January 23, 2025

Between

Crested Sea Agencies

Applicant

and

Tangaza University College

Respondent

Ruling

1. This is a ruling on the validity of a termination notice issued by the Applicant/Landlord to the Respondent/Tenant under the provisions of the Landlord and Tenant (Shops, Hotels, and Catering Establishments) Act, Cap. 301 (hereinafter referred to as “Cap. 301”).

2. The notice in question is dated 11th June, 2024, served upon the Tenant on 1st July, 2024, and intended to take effect on 11th August, 2024. The Tenant has challenged the validity of the notice on grounds of non-compliance with the statutory requirements under Cap. 301.

3. The Applicant filed Reference and a Notice of Motion Application Dated 29th July, 2024 challenging the Respondent’s action as highlighted above. The said application was opposed vide a replying Affidavit Dated 2nd December, 2024 and by consent of parties the application and reference were to be canvassed by way of written submissions.

4. Particularly, the Tribunal is called upon to determine whether the termination notice complies with the statutory provisions and whether it is valid and enforceable.

Issues For Determination 5. The following issues arise for determination:i.Whether the termination notice complies with Section 4(2) of the Landlord and Tenant (Shops, Hotels, and Catering Establishments) Act, Cap. 301. ii.Whether the notice gave the Tenant adequate time in accordance with the law.iii.Whether the notice is valid and enforceable.

Legal Framework 6. The termination of a controlled tenancy in Kenya is governed by Section 4(2) of Cap. 301, which provides:“A landlord who wishes to terminate a controlled tenancy, or to alter, to the detriment of the tenant, any term or condition in, or right or service enjoyed by the tenant under such tenancy, shall give notice in that behalf to the tenant in the prescribed form and shall not, where the tenant is entitled to compensation under this Act, terminate the tenancy or alter any term or condition thereof to the detriment of the tenant, unless such compensation has been agreed upon or has been determined by the tribunal."

7. Section 4(4) further provides that the notice must give at least two months’ notice before the intended termination or alteration takes effect. This statutory requirement is mandatory and not subject to variation by the landlord or tenant.

8. In Kasarani Investments Holdings Limited v Kenya Breweries Limited [2017] eKLR, the court emphasized that strict compliance with the statutory requirements is mandatory, and any deviation renders the notice invalid.

AnalysisA. Compliance With The Two-month Notice Requirement 9. The termination notice in question is dated 11th June, 2024, and was served on the Tenant on 1st July, 2024. The notice indicates that the termination would take effect on 11th August, 2024. The period between the date of service (1st July, 2024) and the intended termination date (11th August, 2024) is 41 days, which falls short of the statutory two-month requirement stipulated under Section 4(2) of Cap. 301.

10. The courts have consistently held that the computation of time under Cap. 301 begins from the date the Tenant receives the notice and not the date indicated on the notice. This principle was reiterated in Heights Limited v Kenya Railways Corporation [2019] eKLR, where the court stated that the service date is the critical date for determining compliance with the notice period.

11. In expounding on the threshold that should be met by a Landlord placing reliance on Section 7(1)(f) of the Act as a ground for termination of tenancy, the High Court in the case of Auto Engineering Ltd Versus M. Gonella & Co. Ltd (1978) eKLR stated as follows: -“…First, it is correct that the wording of section 7(1)(f) is “demolish or reconstruct”, and not merely to effect repairs. The distinction can of course be important; for while mere repairs may not necessarily mean that the landlord needs possession of the premises, an intended demolition or reconstruction of a substantial part of the premises would in all probability be frustrated if the landlord could not obtain possession, and that is why this provision exists.”

12. As such, the notice fails to meet the mandatory two-month requirement and is therefore invalid.

B. Adequacy Of The Notice Period 13. The purpose of the two-month notice requirement under Cap. 301 is to afford the Tenant sufficient time to prepare for the termination or alteration of the tenancy. By providing only 41 days' notice, the Landlord deprived the Tenant of the statutory right to adequate preparation. This failure goes against the spirit and letter of Cap. 301, which seeks to balance the rights and obligations of landlords and tenants in controlled tenancies.

14. In Githinji & Another v Mumias Sugar Company Limited [2022] eKLR, the court held that even minor deviations from the statutory notice period could render a notice invalid, as the law must be applied uniformly and strictly.

C. Validity And Enforceability Of The Notice 15. The Landlord argued that the notice substantially complied with the requirements of Cap. 301 and should therefore be upheld. However, substantial compliance is not sufficient in the context of statutory notice requirements under Cap. 301. The law requires strict adherence, and failure to meet even one requirement renders the notice null and void.

16. This position was affirmed in Chon Jeuk Kim & Another v E.J. Austin & 2 Others [2014] eKLR, where the court held that non-compliance with mandatory statutory requirements regarding notices is fatal to the validity of the notice.

17. I am also alive to the position of the law on the issue of a termination notice as discussed in Manaver N. Alibhai T/A Diani Boutique vs. South Coast Fitness & Sports Centre Limited, Civil Appeal No. 203 of 1994, stated that: -“The Act lays down clearly and in detail, the procedure for the termination of a controlled tenancy. Section 4(1) of the Act states in very clear language that a controlled tenancy shall not terminate or be terminated, and no term or condition in, or right or service enjoyed by the tenant of, any such tenancy shall be altered, otherwise than in accordance with specified provisions of the Act. These provisions include the giving of a notice in the prescribed form. The notice shall not take effect earlier than 2 months from the date of receipt thereof by the tenant. The notice must also specify the ground upon which termination is sought. The prescribed notice in Form A also requires the landlord to ask the tenant to notify him in writing whether or not the tenant agrees to comply with the notice.

18. In the present case, the failure to provide the requisite two-month notice renders the termination notice invalid and unenforceable.

Conclusion And Orders 19. The termination notice dated 11th June, 2024, served on the Tenant on 1st July, 2024, and intended to take effect on 11th August, 2024, is hereby declared invalid and unenforceable for failing to comply with the mandatory two-month notice requirement under Section 4(2) of Cap. 301.

20. Consequently, the following orders are issued:a.The purported termination of the tenancy Dated 11th June, 2024 served on 1st July,2024 and to effect on 11th August, 2024 is invalid and of no effect.b.The Tenant shall remain in occupation of the premises unless and until a valid notice is issued in compliance with Cap. 301. c.The Landlord is at liberty to issue a fresh termination notice that adheres to the statutory requirements.d.Each party shall bear their own costs in this matter.

RULING DATED, SIGNED & DELIVERED VIRTUALLY THIS 23RD JANUARY,2025. HON. MIKE MAKORI(MR.)BUSINESS PREMISES RENT TRIBUNAL