Margaret Wahito v Mahiga Produce Trading Co [2021] KEBPRT 215 (KLR)
Full Case Text
REPUBLIC OF KENYA
BUSINESS PREMISES RENT TRIBUNAL
VIEW PARK TOWERS 7TH & 8TH FLOOR
TRIBUNAL CASE NO. 47 OF 2018 (NYERI)
MARGARET WAHITO.......................................................................TENANT/APPLICANT
VERSUS
MAHIGA PRODUCE TRADING CO.....................................LANDLORD/RESPONDENT
JUDGMENT
1. By a tenancy notice dated 18th June 2018, the landlord served the tenant with a notice to alter terms of tenancy by increasing rent from Kshs.10,500/- per month to Kshs.18,600/- per month as the current rent is below the market rate in Nyeri Town.
2. The tenant filed a reference to oppose the said notice on 20th August 2018 and on 3rd December 2018, this Tribunal ordered that she would continue paying monthly rent of Kshs.10,500/- pending the hearing and determination of the reference.
3. The tenant filed a valuation report dated 16th August 2018 prepared by Epi consults ltd in which the valuer recommends a monthly rent of Kshs.10,500/- using 6 rental comparables.
4. The suit premises is located on L.R. NO. Nyeri Municipality/Block III/25 registered to the Respondent. It measures 97 sq ft and a store measuring 36sq ft altogether 133 sq.ft and paying a monthly rent of Kshs.10,500/- at a rate of 78. 95/- per sq ft.
5. The suit premises is located along Kimathi street of Nyeri Town and the demand for such premises is relatively high according to the valuation report.
6. The rental comparables considered by the valuer are as follows:-
(i) Nyeri Municipality Block III/152 along Gakere road with a rate of Kshs.64. 44 per sq ft per month.
(ii) Nyeri Municipality Block III/15 along Kimathi way with a rate of Kshs.65. 63 per sq feet per month.
(iii) Nyeri Municipality Block III/18 along Gakere road with a rate of Kshs.54. 96 sq. per ft per month and an escalation rate of 15% per every 2 years.
(iv) Nyeri Municipality Block III/65 along Gakere road with a rate of Kshs.60. 00 per sq ft. per month.
(v) Nyeri Municipality Block 1/79 along Kimathi way with a rate of Kshs.50. 00 per sq ft per month.
(vi) Maryliza shop occupying a lettable area of 205 sq ft and attracting Kshs.64 per sq ft per month.
7. According to the tenant’s valuer the emerging range is between Kshs.50. 00 and 64. 44sq. per ft per month and recommends the current rent to continue being applied as it is above the rates in the neighbourhood business premises.
8. The landlord filed a valuation report by Mureithi Valuers Limited which is dated 18th May 2018 in which it is recommended a rent of Kshs.13,600/- for the premises occupied by the tenant herein at a rate of Kshs.140/- per sq ft.
9. The comparables used are as follows:-
(i) Block III/25 – same building Kshs.140/- per sq ft
(ii) Block III/257-Batian Building Kshs.320/- per sq ft.
(iii) Block III/19 (stalls)- Kshs.360/- per sq ft.
(iv) Block III/48-fungalima Kshs.285 per sq ft
(v) Block III/191- Nyeri Teachers Kshs.164. 84 per sq.ft.
10. The landlord’s valuer states that the assessment has recommended the highest rental rates offered in the neighbourhood.
11. The valuer took consideration of the following factors:-
(a) Age and condition of the subject building.
(b) Prevailing market rental in newly constructed buildings.
(c) Location of the subject property in relation to all the necessary amenities.
(d) The lease period for the different shops.
(e) Other tenants with running leases within the subject building.
12. Some buildings in the analysis by the landlord’s valuer charge higher rent on account of higher potential location in terms of location and being relatively newer.
13. Given that both valuations were conducted more than three (3) years ago, I shall adopt the landlord’s valuers’ assessment.
14. I therefore proceed to make the following final orders in this matter:-
(a) The tenant’s rent is hereby increased to Kshs.13,600/- with effect from the month of October 2021.
(b) The tenant’s reference is hereby dismissed with no orders as to costs.
It is so ordered.
DATED, SIGNED AND DELIVERED THIS 24TH DAY OF SEPTEMBER 2021.
HON. GAKUHI CHEGE
VICE CHAIR
BUSINESS PREMISES RENT TRIBUNAL
IN THE PRESENCE OF:-
WACHIRA FOR THE LANDLORD
NO APPEARANCE FOR THE TENANT