Fredrick Manoah v George Muhoro Mathare t/a Midax Petroleum Ltd, Mwanzo Management and Properties Ltd & Trade Wide Auctioneers [2021] KEBPRT 376 (KLR) | Controlled Tenancy | Esheria

Fredrick Manoah v George Muhoro Mathare t/a Midax Petroleum Ltd, Mwanzo Management and Properties Ltd & Trade Wide Auctioneers [2021] KEBPRT 376 (KLR)

Full Case Text

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

TRIBUNAL CASE NO 146 OF 2021 (NAIROBI)

FREDRICK MANOAH..................................................................TENANT/APPLICANT

VERSUS

GEORGE MUHORO MATHARE T/A

MIDAX PETROLEUM LTD..........................................LANDLORD/1ST RESPONDENT

MWANZO MANAGEMENT AND PROPERTIES LTD........AGENT/2ND RESPONDENT

TRADE WIDE AUCTIONEERS.............................AUCTIONEERS/3RD RESPONDENT

RULING

The Tenant’s application dated 12th February 2021 is for the following reasons;

1. Spent.

2. Spent

3. That this honourable Tribunal do hereby order that pending the hearing and final determination of this application or complaint status quo be maintained, that is, the Applicant/Tenant do pay Kshs 40,000 per month towards rent arrears of Kshs 360,000/- as he is currently doing and do continue to pay the normal rent of Kshs 120,000 per month on or before 10th of each successive month.

4. Costs.

The application is brought on the grounds on the face of the application which I proceed to summarize as follows;

1. That on 3rd September 2020l, the parties herein executed an agreement on the payment of the rent arrears.

2. That despite the said agreement, the Landlord continues to harass the Applicant.

3. The Tenant is optimistic that he will be able to clear the outstanding rent of Kshs 360,000in instalments of Kshs 40,000/- per month.

The affidavit in support of the Tenant’s motion may be summarized as follows;

1. That there exists a lease between the Applicant and the 1st Respondent dated 19th February 2018 at a monthly rent of Kshs 150,000/-.

2. That due to covid – 19 pandemic, the Applicant closed down the business on or about March 2020, but has continued paying rent, though late.

3. That on or about July and August 2020, rent arrears accumulated to Kshs 194,000 as a result of which counsel for the Landlord issued to the Tenant demand notices.

4. The Tenant then requested counsel for the Landlord to intervene and have the rent arrears paid in instalments.

5. That eventually, it was agreed that the rent arrears would be settled in the manner that the Tenant pays Kshs 50,000/- upon execution of the agreement and Kshs 20,000/- weekly till payment in full.

6. The Tenant has paid rent via mpesa.

7. That in disregard to the agreement, the Landlord has instructed evictions to distress for rent.

8. That rent arrears in the sum of Kshs 360,000/- is admitted.

9. That the rent arrears have accumulated due to the covid – 19 pandemic and the Tenant is willing to pay the rent arrears in instalments of Kshs 40,000/-.

The application is opposed.  The Respondents have filed a replying affidavit through Locy Njambi Njogu whose contents I summarize as follows;

1. That the Respondents are not aware that the Tenant had indeed closed down his business though it is confirmed that the Tenant had been late in paying rent.

2. That it is true rent was reduced to Kshs 120,000 per month effective August 2020.

3. That it is true that as at August 2020, the Tenant had rent arrears amounting to Kshs 194,000/- and a rent arrears repayment agreement was entered into between the deponent and the Tenant/Applicant.

4. That the Landlord is not in breach of the said agreement, it is the Tenant who has failed to honour the same accumulating rent arrears of Kshs 360,000/-.

5. That the Tenant should comply with the agreement or at least pay a substantial amount in an effort to clear the rent arrears.

6. That the Landlord depends on the rental income for his upkeep and that of his family.

Having summarized the respective cases for the parties, the only issue that arises in this application is whether the Tenant/Applicant may be allowed to liquidate the rent arrears in instalments of Kshs 40,000/- per month alongside the normal rent payable monthly.  Does the Tribunal have powers to grant the order sought?  The Tenant’s complaint and application is expressed to be brought under section 12(4) of Cap 300 of the Laws of Kenya.  The Landlord and Tenant (Shops, Hotels and Catering Establishments Act).  The said section is in the following terms;

12(4) “In addition to many other powers specifically conferred on it by or under this Act, a Tribunal may investigate any complaint relating to a controlled tenancy made to it by the Landlord or the Tenant and may make such order thereon as it deems fit.”

The Tenant in the present application does not seek to re-write the agreement between himself and the Landlord.  he merely seeks to be allowed to liquidate the outstanding rent arrears in instalments as he continues to pay the normal agreed rent.  The Tenant has attributed his problems in the payment of rent to the covid – 19 pandemic which led to the closure of his business around March 2020.  The business the Tenant was in the premises is a bar business “christened” Doma Restraurant and Bar Lounge.

It is now common knowledge that the operations of bars and restaurants have been seriously affected by the regulations put in place by the Government.  The hours of operation have been curtailed in an effort to contain the effect and spread of the covid – 19 virus.  The Landlord seems to have been alive to this situation when he agreed to reduce the rent payable from Kshs 150,000/- to Kshs 120,000 per month.  It would not do to ignore this state of affairs and I am satisfied that section 12(4) of Cap 300 empowers the Tribunal to issue the kind of orders sought by the Tenant.

The business interests of the Tenant ought to be balanced against the interests of the Landlord.  the Landlord has a right to returns on his investment and is fully entitled to the payment of all rent due.  The Tenant does not contest this.

Whereas the Tenant has applied to be allowed to liquidate the rent arrears in instalments of Kshs 40,000, the Landlord has demanded that the Tenant complies with the earlier agreement (of 3rd September 2020) and further pays a substantive amount in good faith to clear the arrears of Kshs 360,000/-.  These are the rival proposals I have to balance.

In the circumstances, and doing the best I can, I order that the Tenant does pay Kshs 180,000 being half of the outstanding rent arrears within the next thirty days (from the date of this ruling) and thereafter do liquidate the balance in monthly instalments of Kshs 40,000/- as requested in his application.  The Tenant shall continue honouring his other obligations under the lease agreement.

The Tenant’s application succeeds to that extent.  I will not make any order as to costs.

The Tenant’s complaint dated 12th February 2021 was to the effect that the Landlord was harassing the Tenant and sending auctioneers despite there being an agreement executed on how rent is to be paid despite not defaulting in the said agreement.  I take the view that his complaint has been well answered in the above ruling as the issue of the payment of the rent arrears and the current rent have been resolved.  There is therefore no use in keeping this matter pending and the complaint is hereby marked as allowed with no order as to costs.

HON. CYPRIAN MUGAMBI NGUTHARI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL

Ruling dated, signed and delivered virtually by Hon Cyprian Mugambi Nguthari this 22ndday of July, 2021 in presence of Mr Ombati for the Tenantand Mr Amati for the Landlord.

HON CYPRIAN MUGAMBI NGUTHARI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL