Elizabeth Nyambura, Moffat Muya & Timothy Mbundi v Director Kenya African National Union (Kanu) [2021] KEBPRT 139 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

TRIBUNAL CASE NO. 49,50 & 51 OF 2018 (NYERI)

ELIZABETH NYAMBURA

MOFFAT MUYA

TIMOTHY MBUNDI.................................................TENANTS

VERSUS

DIRECTOR KENYA

AFRICAN NATIONAL UNION (KANU)..........LANDLORD

JUDGMENT

The Dispute Background

1.   The Landlord issued the Tenants a written notice dated 9th May 2018, which notice sought to alter the terms of tenancy.

2.   The tenants in opposing the proposal by the Landlord for alteration of the said tenancy, moved this honourable Court by way of reference seeking that this Court consider and determine the issue on the variation of the tenancy.

3.   This Court on 6th December 2018 directed through an order dated 6th December 2018 that, both parties do a valuation and file reports in 6 days, then hearing be fixed on 28th March 2019.

4.   On 28th March 2019, this Honourable Court issued an order dated 28th March 2019, which order directed that the matter be fixed for hearing on 10th April 2019 if the parties could not reach consensus ad idem.

5.   On 10th April 2019, upon hearing the parties, the honourable Court directed that the parties do a valuation of the suit premise and that the report be served the Court for assessment and determination of the disputed issue.

6.   Both parties did valuation by Rwingo Valuers and Probity Valuers, reports dated 11th January 2019 and 9th January 2019 respectfully.

7.   The Tribunal vide an order dated 4th October 2019 directed that the valuers of both parties attend the court and be examined and cross-examined respectively on the integrity of the valuation reports on 9th December 2019.

8.   On 10th January 2020, the Landlord by way of notice of motion dated 10th January moved this Honourable Court seeking inter alia orders that:

a)  Application be certified as urgent.

b)  The Honourable Tribunal be pleased to issue an order for revaluation of the suit premises by an independent/neutral valuation officer to independently inspect and revalue the suit premises.

c)   That the costs be borne by the Tenants.

The Court vide an order dated 10th January 2020, granted order (a) certifying the matter as urgent and directed that the Tenants’ advocate be served upon, and that hearing be fixed on 17th January 2020.

9.   The tenants on 16th January 2020opposed to that Application by the Landlord dated 9th January on the following grounds:

a)  That the application has no legal basis, and it is not disclosed what purpose it is intended to serve.

b)  That the valuation sought to be revised were done independently at the instance of the respective parties.

c)   That the application is frivolous, vexatious and an abuse of court process.

d)  That the application has been overtaken by events.

10. Vide a ruling dated 26th May 2020, this Court (Hon. Mbichi Mboroki) dismissed the landlord’s application dated 10th January 2020.

11. Further on 11th August 2021, the Landlord moved this Honourable Tribunal through a certificate of urgency dated 11th August 2021 on among other grounds that:

a)  The reference was filed herein opposing the Landlord’s proposal to increase the rent.

b)  That since the issuance of that notification, 3 out of 9 tenants have since not been paying rent as per the notice in claim that they are in wait of the tribunal’s judgment in this instant suit.

c)   That the tenants have since continued to pay rent below the market value.

d)  That they therefore seek this honourable court to deliver judgment urgently.

This Honourable Court vide an order dated 20th August 2021 directed among others that the matter be certified as urgent. Subject and key in this matter is a determination on rent payable currently.

The Tenant’s Case

12. The Tenants oppose the notice by the Landlord seeking to alter the Tenancy terms, which shall see the increase in rent paid for the suit premises.

13. They expressed their opposition by way of reference to the Tribunal pursuant to section 6 (1) of CAP 301.

14. In response to the Landlord’s application dated 10th January 2020, they deponed that the said application was in dearth of legal basis and therefore unfounded. In buttressing their disposition, they affirmed the fact that the valuation was independently done at the instance of both parties.

The Landlord’s Case

15. The Landlord contend in their notice to the Tenants that, they are duly entitled to vary the tenancy terms and that rent amount paid by the tenants is below the market price.

16. They deponed in their application dated 10th January 2020 that there is need to engage a neutral valuation officer to independently value the premise.

17. They also contend that save the 6 Tenants, out of 9, who have been paying the rent as per the provision of the notice to vary tenancy terms, the 3 have since not been paying the proposed rent.

Jurisdiction

18. The Jurisdiction of this Honourable Court has not been contested by either party and therefore not in dispute.

Summary of Tenant’s valuer’s Valuation report

19. The Tenant’s valuer’s valuation report was done by Rwingo Valuers and filed on 11th January 2019. The purpose of the report and valuation was to assess and advise on the current market rents chargeable per month for the suit premises.

20. The Valuers in this report recommended that fair rent prices could be as indicated in the below table:

Premises Tenant’s name Lettable Space Net Area

(sq ft) Asses Rent

(KShs) pm Analysis

(KSs./sq ft)

Shop No. 1 Moffat Mwihuri

Mum’s Café Hotel Area 473 13, 244. 00/=

4,900. 00/= 28

Kitchen 350 14

Shop No. 2 Timothy Bundi

Bargain Hardware Shop Area 473 13,244. 00/=

4,900. 00/= 28

Storeroom 350 14

Shop No. 3 Elizabeth Naymbura

New City Shop Shop Area 253 7,084. 00/=

1,078. 00/= 28

Storeroom 77 14

Summary of Landlord’s valuer’s Valuation report

21. The Landlord’s valuer’s valuation report was done by Probity Valuers and filed on 9th January 2019. The purpose of the report and valuation was to assess and advise on the current market rents chargeable per month for the suit premises.

22. The said valuers made recommendation by invocation of comparable approach. They are tabled as below:

Premises Lettible

Space Monthly Rent

Per ft2 (KShs.) Total Monthly

Rent (KShs.)

New City General shop 313 ft2 110/=per ft2 KShs 34,430/=

Bargain Hardware 799 ft2 110/=per ft2 KShs 87,890/=

Mum’s Café 799 ft2 110/=per ft2 KShs 87, 890/=

Nyama Choma Village and

Shops (Groundfloor) 2,840 ft2 80/=per ft2 KShs 227,200/=

Nyama Choma Village and

Shops (First floor) 3228 ft2 40=per ft2 KShs 129,200/=

Analysis of Law and Determination.

23. I have carefully analyzed all the pleadings before this honorable Tribunal, all relevant evidence adduced before this Tribunal.

24. I find that two main issues fall for determination: whether the landlord is entitled to increase rent; and, whether valuation reports are sufficient and which of the two suffices.

25. Before I embark on the main issue seeking my determination, I note that by a ruling of this Honourable Court issued on 26th May 2020 by my brother Hon. Mbichi Mboroki (as he then was), the Landlord’s application dated 9th January 2020 was dismissed and therefore considered spent. The other application is for this judgement to be delivered expeditiously. Matter having been heard by the former chairman.

a.   Whether the landlord is entitled to increase rent

26. Contracts belong to the parties, and they are the liberty to negotiate and even vary the terms as and when they choose. In Housing Finance Company v Njuguna LLR 776 (CCK) the court expressed the following view which I wholly accept and fully associate with for the sake of the foregoing issue:

Contracts belong to parties and they are at liberty to negotiate and even vary the terms as and when they choose. This they must do together with the meeting of the minds.If it appears to a court that one party varied the terms of a contract with another, without the knowledge, consent or otherwise of the other, and that other demonstrates that the contract did not permit such variation, this court will say no to the enforcement of such a contract. [Emphasis mine].

27. The gist of the instant case, is a change or variation of tenancy terms which shall by default and as well expressed in the notice by the Landlord, see the rent increase.

28. Rent increment can be by a way of notice duly acceptable in law and rightfully so as prescribed. The Landlord in the case before me issued a notice to the Tenants seeking to vary the terms of their tenancy. The validity of the impugned notice is not in dispute.

29. Due to the gradual but steady change in socio-economic factors, which I have doubt changed in this present case, property owners are under law entitled to increase rent albeit with the permission of the Tribunal incase the tenancy falls under cap 301. In view of the above, I find that, the Landlord in this case is duly entitled to increase rent.

b.  Whether valuation reports are sufficient and which of the two suffices

30. This honorable Court issued a direction to both parties to proceed and do a valuation. Reports of the said valuation were duly filed and adduced as evidence by both parties’ representative. Both parties used an independent valuer.

31. I have considered both reports and the evidence on record being oral testimony by the valuers which appreciate the comparable approach. In addition, I have observed that the tenants in the present case, pay less rent as compared to the neighborhood Tenants in the same nature of business. Including in the same premises.

32. I have considered effluxion of time since this suit was filed in 2018 and since the valuations were done 2019 and in order to serve justice to both parties, I merit both reports but find that the recommendation by the landlords valuer as to the rent payable more credible as I have also considered time value for money in our current property market whose values increase over time and I adopt the same.

i.    Tenants shall therefore pay monthly rent at the rate of 110/- per sq ft effective 1st December 2021.

ii.  Tenants Reference is compromised on similar terms.

HON A. MUMA

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL

Judgement dated, signed and delivered virtually by Hon A. Muma this 12thday ofNovember, 2021 in the presence of Kinyua for the Landlord and Njoki Ms for Mwangifor the Tenants.

HON A. MUMA

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL