Kimmi Housing Co-Operative Society Ltd v Dakwa Agencies [2022] KEBPRT 47 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

VIEW PARK TOWERS 7TH & 8TH FLOOR

TRIBUNAL CASE NO. 755   OF 2019  (NAIROBI)

CONSOLIDATED WITH BPRT 756 TO 768 OF 2019

KIMMI HOUSING CO-OPERATIVE

SOCIETY LTD......................................APPLICANT/LANDLORD

VERSUS

DAKWA AGENCIES........................... RESPONDENT/TENANT

RULING

1. This ruling is in respect of the above cited consolidated references involving the same landlord but different tenants but  in respect of the same commercial premises.  The consolidation order was made on 13th August 2019, by the then Chairman Hon. Mbichi Mboroki.

2. In Tribunal case no. 755 of 2019, the landlord seeks for an order to compel the tenant to pay Kshs.302,992/- in rent arrears in respect of business premises situate at Olympic House Plot no. 209/2540/2, Nairobi.  The monthly rent is Kshs.13,975/-.  The landlord attaches  a rent account statement marked ‘KHCS1’ to sow how the arrears are made up.  It is for the period January 2016 to July 2019.

3. In Tribunal case no. 756 of 2019, the landlord claims arrears amounting to Kshs.87,200/- and has annexed a rent account statement for the period January 2016 to July 2019.  The reserved monthly rent is Kshs.9,425/-.

4. In Tribunal case no.757 of 2019, the landlord claims Kshs.132,184/- in rent arrears and has annexed a rent account statement for the period January 2016 to July 2019.  The monthly rent is Kshs.9,100/-.

5. In Tribunal case no. 758 of 2019 the landlord claims Kshs.292,296/- as rent arrears.  The landlord attaches a rent account statement for the period January 2016 to July 2019.  The monthly rent is Kshs.11,700/-.

6. In Tribunal case no. 759 of 2019, the landlord claims Kshs.215,164/- and attaches a rent account statement for the period January 2016 to July 2019.  The monthly rent is Kshs.18,880/-.

7. In tribunal case no. 760 of 2019, the landlord claims Kshs.136,377/- and has annexed a rent account statement for the period January 2016 to July 2019.  The monthly rent is Kshs.18,720/-.

8. In Tribunal case no. 761 of 2019, the landlord claims Kshs.107,592/- and has annexed a statement of rent account for the period January 2016 to July 2019.  The monthly rent is Kshs.10,075/-.

9. In Tribunal case no. 762 of 2019, the landlord claims Kshs.260,466/- and has annexed a statement of rent account for the period January 2016 to July 2019.  The monthly rent is Kshs.20,150/-.

10. In Tribunal case no. 763 of 2019, the landlord claims Kshs.590,000/- and has annexed a statement of rent account for the period January 2016 to July 2019.  The monthly rent is Kshs.12,000/-.

11. In Tribunal case no. 764 of 2019, the landlord claims Kshs.179,706/- and has annexed a statement of rent account for the period January 2016 to July 2019.  The monthly rent is Kshs.13,000/-.

12. In Tribunal case no. 765 of 2019, the landlord claims Kshs.217,077/- and has annexed a statement of rent account for the period January 2016 to July 2019.  The monthly rent is Kshs.14,625/-.

13. In Tribunal case no. 766 of 2019, the landlord claims Kshs.650,336/- and has annexed a statement of rent account for the period January 2016 to July 2019.  The monthly rent is Kshs.30,225/-.

14. In Tribunal case no. 767 of 2019 the landlord claims Kshs.178,773/- and has annexed a statement of rent account for the period January 2016 to July 2019.  The monthly rent is Kshs.16,250/-.

15. In Tribunal case no. 768 of 2019 the landlord claims Kshs.178,773/- and has annexed a statement of rent account for the period January 2016 to July 2019.  The monthly rent is Kshs.16,250/-.

16. In Tribunal case no. 769 of 2019 the landlord claims Kshs.150,525/- and has annexed a statement of rent account for the period January 2016 to July 2019.  The monthly rent is Kshs.9,425/-.

17. The tenant in Tribunal case no. 755 of 2019 filed a replying affidavit sworn on 24th September 2019 by one James N. Gitu stating that he has been paying a monthly rent of Kshs.13,975/- inclusive of VAT.   He states that on 29th January 2018, the landlord wrote to him intimating that rent was to reviewed and that a meeting was to be convened for the same and a lease drawn and executed by both parties.  Contrary to the tenant’s assertion that the landlord had increased rent to Kshs.17,200/-, the amount set out in the rent account statement is Kshs.13,975/- which he admits to be the rent payable.

18. Although, I have seen the tenancy notice dated ‘JNG2’ attached to the tenant’s replying affidavit, the said notice is not subject matter of the instant proceedings.  I have examined the payment receipts annexed by the tenant to the replying affidavit and note that apart from the payment of Kshs.100,000/- made on 6th August 2019 which is after the last date of the statement, all the others have been credited.  I therefore agree with the landlord’s statement of account in respect of the said tenant.

19. I have not seen any application of VAT on the statement of account filed in respect of the said tenant as the amount quoted up to 1st January 2018 is the sum of Kshs.13,975/-.

20. In a supplementary affidavit sworn on 18/11/2019 by Josphat RubaRita Ngari on behalf of the landlord, the deponent states that the rent payable by the tenant as at the date of filing suit was Kshs.17,200/- and Kshs.2,752/- as VAT to make altogether Ksshs.19,952/-.  According to the landlord the tenant’s monthly rent was increased from Kshs.13975/- to Kshs.17,200/-.  In my view, this increment being disputed ought to be subject matter of a reference for validation of the tenancy notice marked JDN1 (b) which is not a subject matter hereof.  As such the applicable rent ought to be Kshs.13,975/- in respect of this tenant until the notice is validated.

21. In regard to Tribunal case no. 756 of 2019, the  tenant swore a replying affidavit on 24th September 2019  admitting the rent payable per month to be Kshs.9425/- inclusive of VAT.  This is the amount charged by the landlord up to 1st January 2018.  The landlord increased monthly rent thereafter to Kshs.11,600/- on the basis of the tenancy notice dated 30th November 2017 which is not a subject matter of this litigation.  Since the increment is disputed, the tenancy notice ought to be subjected to a validation process.  The tabulation of rent ought to be based on the undisputed sum of Kshs.9,425/- until the said validation process is undertaken by the Tribunal in separate proceedings.

22. I have looked at the rent payment receipts exhibited by this particular tenant against the statement of rent account attached to the landlord’s application and I note that the same have been credited.

23. In regard to Tribunal case no. 757 of 2019, I note that the tenant did not file any replying affidavit or evidence of rent payment for the relevant period.  The claim for Kshs.132,184/- and the monthly rent ascribed thereto is undisputed.  As such judgment is entered in terms.  The landlord is entitled to charge rent for subsequent months at the rate of Kshs.11,200/- plus 16% VAT to make altogether Kshs.12,744/- per month.

24. In Tribunal case no. 758 of 2019, I have not seen any replying affidavit and the amount of Kshs.292,296/- claimed by the landlord is undisputed.  The rent payable is Kshs.16,386/- per month.  All subsequent rent ought to be charged at that rate.

25. In Tribunal case no. 759 of 2019, the landlord’s claim of Kshs.215,164/- is not controverted by way of a replying affidavit.  As such the landlord shall get judgment for the said amount.  The rent payable per month is confirmed at Kshs.23,200/- plus 16% VAT to make altogether Kshs.26,400/-

26. In Tribunal case no. 760 of 2019, the landlord’s claim for Kshs.136,377/- is opposed  and the tenant has annexed some rent payment receipts which I have scrutinized against the statement of rent account filed by the landlord and I have confirmed that all the payments have been credited.  In fact, I have noted that other payments not attached to the replying affidavit have been captured. The tenant has been paying Kshs.22,130/- per month which has validated the increment notice and is therefore required to add the balance of Kshs.910/- with effect from 1st February 2018 to make good the rent payable of Kshs. 23,040/-.  He is estopped from denying the rent increment having already started paying the new rent partially.  He admits it at paragraph 3 of his replying affidavit.  The issue of VAT cannot be in dispute as the rent increment notice did not indicate that it was inclusive.  The tenant ought to add 16% VAT on the new rent as this is a government tax which does not go to the landlord to make altogether Kshs.26,726/-.

27. In Tribunal case No. 761 of 2019, the landlord’s claim of Kshs.107, 592/-. On 18th January 2020, the matter was marked as settled.

28. In Tribunal case no. 762 of 2019, this Tribunal ordered the tenant to pay all the arrears of Kshs.260,466/- and costs of Kshs.10,000/- to the landlord.  As such the matter is spent.

29. In Tribunal case no. 763 of 2019, the landlord’s claim for Kshs.114,590/- is not opposed by way of a replying affidavit.  The rent payable per month with effect from 1st October 2018 inclusive of VAT is Kshs.15,972/-.  I enter judgement as prayed plus costs.

30. In Tribunal case no. 764 of 2019, the landlord’s claim of Kshs.179,706/- is unopposed.  I therefore enter judgment in terms plus costs.

31. In Tribunal case no. 765 of 2019, the landlord’s claim of Kshs.217,077/- is opposed through a replying affidavit of Martin Muiruri Ndungu sworn on  27th September 2019.  I have noted that the tenant has never validated the tenancy notice marked JRN (1) (b) by paying the increased rent.   As such there is need for the notice to be taken through a validation process in separate court proceedings in which the issue of applicable VAT shall be addressed.

32. I note that the payments made by the tenant save for some cheques which may not have been delivered or presented are reflected in the statement of rent account.  I have therefore considered that there is need for reconciliation of the account with the applicable rent for the time being charged at Kshs.14,625/- awaiting determination of the question of increment.

33. In Tribunal case no. 766 of 2019, the landlord’s claim for Kshs.650,336/- is opposed through a replying affidavit sworn on 26th September 2019.  The rent increment being contested by the tenant, the tenancy notice marked “JRN1(b)” ought to be subjected to the process of validation.  As such, the rent payable ought to be maintained at Kshs.11,700/- per month until the increment is validated and the applicable VAT applied on the said basis.  The landlord ought to revise the amount owing on the basis of this determination to enable the tenant pay the amount due under the old rent of Kshs.11,700/-.

34. In Tribunal case no. 767 of 2019, the landlord’s claim for Kshs.178,773/- as at 1st August 2019 is not opposed.  The landlord’s claim therefore is for allowing as prayed.  The monthly rent payable is confirmed at Kshs.180,000/- plus 16% VAT being  Kshs.2880/- to make altogether Kshs.20,880/-.

35. In Tribunal Case no. 768 of 2019, the landlord’s claim of Kshs.150,525/- is disputed through a replying affidavit of the Respondent sworn on 11th October 2019.  The landlord’s supplementary affidavit  sworn on 18th November 2019 annexes a tenancy notice for rent increment from Kshs.9,425/- as monthly rent for the period until the tenancy notice is validated by the Tribunal as observed above.

36. I have keenly looked at the payment receipts exhibited by the Respondent/Tenant against the statement of account exhibited by the landlord and I am unable to confirm whether the tenant has been credited with the same.  There is need for reconciliation of the rent account to establish the amount owing by the tenant.  I note that the tenant admits owing a sum of Kshs.50,000/- at paragraph 11 of his replying affidavit.  He should clear the same if not already done so and engage the landlord in the ordered reconciliation.

37. In the premises, the following orders commend to me in each of the consolidated cases:-

(i)     The applicable rent is Kshs.13,975/- in Nairobi BPRT No. 755 of 2019 and the tenancy notice for increment of rent ought to be subjected to a validation process in separate proceedings.

(ii)    The applicable rent in Nairobi BPRT No. 756 of 2019 is Kshs.9,425/- and the tenancy notice for increment of rent ought to be subjected to a validation process in separate proceedings.

(iii)   In Nairobi BPRT NO. 757 of 2019, Judgment is entered in the sum of Kshs.132,184/- and the monthly rent is confirmed to be Kshs.12,744/- inclusive of V.A.T.

(iv)   In Nairobi BPRT NO. 758/2019, Judgment is entered as prayed in the sum of Kshs.292,296/- and the monthly rent confirmed to be Kshs.16,386/- inclusive of VAT.

(v)    In Nairobi BPRT 759/2019, judgment is entered for Kshs.215,164/- as prayed.  The rent payable per month is confirmed to be Kshs.26,400/- inclusive of VAT.

(vi)   In Nairobi BPRT No. 760/2019 judgment is entered for Kshs.136,377/- and the monthly rent confirmed to be Kshs.26,726/- inclusive of VAT.

(vii)  In Nairobi BPRT 761/2019, the landlord’s claim was marked as settled on 18th January 2020.

(viii) In Nairobi BPRT No. 762/2019, the Tribunal ordered the tenant to pay Kshs.260,466/- plus costs and the matter is spent.

(ix)   In Nairobi BPRT No. 763/2019, judgment is entered for Kshs.114,590/- with monthly rent being confirmed to be Kshs.15,972/- inclusive of VAT  with effect from 1st October 2018.

(x)    In Nairobi BPRT No. 764/2019, Judgment is entered for Kshs.179,706/-.

(xi)   In Nairobi PRT No. 765/2019, the applicable monthly rent is Kshs.14,625/- until the tenancy notice for increment of rent is validated in separate court proceedings instituted by the landlord  for that purpose.  The landlord shall reconcile the rent account using the old rent in the meantime for settlement by the tenant.

(xii)  In Nairobi BPRT No. 766/2019, the monthly rent shall be maintained at Kshs.11,700/- until the tenancy notice for increment of rent is validated in separate court proceedings instituted by the landlord for that purpose.  The landlord shall reconcile the rent account using the old rent in the meantime for settlement by the tenant.

(xiii) In Nairobi BPRT No. 767/2019, Judgment is entered for Kshs.178,773/- and monthly rent confirmed at Kshs.20,880 inclusive of VAT.

(xiv)  In Nairobi BPRT No. 768 of 2019, the monthly rent shall be maintained at Kshs.9425/- until the tenancy notice for increment of rent is validated in separate proceedings instituted by the landlord for that purpose.  The landlord shall reconcile the rent account using the old rent in the meantime for settlement by the tenant.

(xv)   The landlord is awarded costs of Kshs.10,000/- each against the tenants in the following cases i.e 757/2019, 758/2019, 759/2019. 760/2019, 763/2019, 764/2019 and 767/2019.

(xvi)  The landlord is at liberty to institute separate proceedings against the tenants in the following  cases for purposes of validation of the tenancy notices for increment of rent i.e Nairobi BPRT No. 755/2019, 756/2019, 765/2019, 766/2019 and 768/2019.

(xvii) The costs in Nairobi BPRT No. 755/2019, 756/2019, 765/2019, 766/2019 and 768/2019 shall abide the outcome of the proposed cases for validation of the tenancy notices aforesaid.

(xviii)        There shall be liberty to apply.

It is so ordered.

RULING DATED, SIGNED AND DELIVERED THIS 23RD DAY OF FEBRUARY 2022.

HON. GAKUHI CHEGE

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL

Ruling delivered in the absence of  both parties.