Miran v Edward [2025] KEBPRT 275 (KLR)

Miran v Edward (Tribunal Case E250 of 2024) [2025] KEBPRT 275 (KLR) (30 April 2025) (Ruling)

Neutral citation: [2025] KEBPRT 275 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E250 of 2024

CN Mugambi, Chair

April 30, 2025

Between

Samir Abdulwahid Miran

Applicant

and

Najmun Edward

Respondent

Ruling

Introduction 1. The Landlord’s notice to terminate/alter terms of tenancy dated 30. 10. 2024 seeks to increase the rent for the suit premises known as Block XXIX/65e66 40418 MOMBASA from Kshs. 7,000/= per month to Kshs. 26,000/= per month. The notice is brought on the grounds that;-“The present monthly rent of Kshs. 7,000/= per month payable by the Tenant is very low and that the premises are likely to fetch the purposed rent of Kshs. 26,000/= per month in the open market.”

2. The Tenant while opposing the Landlord’s notice has filed a Reference to the Tribunal dated 6. 11. 2024.

The Landlord’s Valuation Report 3. The Landlord’s valuation report dated 14. 10. 2024 has been prepared by M/S Musyoki & Associates for an inspection carried out on 11. 10. 2024. The report shows that the Tenant NAJMUN EDWARD occupies a shop measuring 24. 00 square meters and pays the rent of Kshs. 15,000/=. The valuers have proposed an open market rent of Kshs. 26,300/= per month at the rate of Kshs. 1,097/= per square meter. In arriving at the above rates, the valuers took into consideration the rents payable in respect of the following properties;-Plot No. Samburu Area occupied Rent per square meter RentKshs. Kshs.a.93/XXIX Samburu Road 25. 00 square meters 1,000/= 25,000/=b.158/XXVIII Samburu Road 24. 00 square meters 1,042/= 25,000/=c.10/XXIX Samburu Road 20. 00 square meters 1,250/= 25,000/=

4. The average rent payable in respect of the comparables is Kshs. 1,097/= per square meter per month and this is the rate the valuers for the Landlord adopted to recommend a rent increment of up to Kshs. 26,300/= (1,097 x 24. 00 square meters).

The Tenant’s Valuation Report 5. The Tenant’s Valuation Report has been prepared by M/S Adomag Valuers & AssociateS and it is dated 10. 12. 2024 for an inspection carried out on 9. 12. 2024. The basis of the valuation is current market rental value and the methodology used by the valuers has been termed as “comparable market rental rates” approach. The valuers have concluded that the applicable rates are Kshs. 650/= per square meter which translates to a monthly rent of Kshs. 15,600/=. The report acknowledges that the Tenant occupies an area of 24. 00 square meters in the suit premises.

Analysis and determination 6. The only issue that arises for determination in this matter is whether or not the court ought to allow the Landlord’s notice to terminate/alter the terms of the tenancy.In so doing, the court is bound to consider all the reports before it go into individual comparables and determine which is the better report (see the case of; Tala investments Ltd vs Green Spot Limited, Civil Appeal No. 269 of 1993).

7. Whereas both parties have filed their valuation reports, it is only the report of the Landlord that has shown the comparables used in addressing the current market rates. The report filed by the Tenant has not disclosed the comparables used and only states that;-“We have adopted comparable market rental rates approach in arriving at the suitable rents.In light of the foregoing particulars, our terms of reference and other relevant factors, it is our considered opinion that the current market rental value of the shop within the property Title No. MSA/Block XXIX/65e66 Kibokoni Area Mombasa County has the following values;-…lettable area Rate (Kshs.) Square meter Recommended rent(Kshs.)24 square meters 650/= 15,600/=

8. I have seen the Landlord’s valuation report; it has adopted comparables on the same street with the subject/suit property. All the comparables and the suit premises are located along Samburu road. The Tenants in the comparables occupy more or less the same area occupied by the Tenant in the suit premises. In my view, the valuation by the Landlord’s valuers is the better report in the circumstances. In the case of; Tala Investments Ltd. Vs Green Spot Ltd. Civil Appeal No. 209 of 1993, the court in this regard stated as follows;-“In dealing with principles upon which a Tribunal should act in assessing rent, its duty is to consider all the reports properly before it. The Tribunal must go into individual comparables to decide which is a better report rather than merely arrive at a mean figure that is the mean figure of the Landlord’s and Tenants’ valuers reports. That is not the proper criteria.”

9. The Tribunal has powers under Section 9(2)(a) of Cap 301 to determine or vary rent. The said Section provides as follows;-“(a)determine or vary the rent to be payable in respect of the controlled tenancy having regard to the terms thereof and to the rent at which the premises concerned ought reasonably be expected to be let in the open market…”Further, Section 12(1)(b) of Cap 301 provides as follows;-“(b)To determine or vary the rent to be payable in respect of any controlled tenancy having regard to all the circumstances thereof.”

10. The terms of the tenancy that the court is required to take into account in these circumstances is the rent that the Tenant pays under the current tenancy. The notice by the Landlord has shown that the Tenant currently pays Kshs. 15,000/= per month while the Landlord’s valuers have in their report indicated that the Tenant currently pays Kshs. 15,000/= per month. This is the rent sought to be increased to Kshs. 26,300/= per month.

11. While taking the terms of the tenancy into account and while also taking into account the rent at which the premises might reasonably be expected to be let in the open market, it is the reasonableness of the rent that must be at the forefront of the Tribunal’s investigation. In the case of; Cleaners Ltd vs Barclays Bank (K)[1972] EA 188, the court stated;-“It is the reasonableness of the rent that must be in the forefront of the Tribunal’s investigation and determination. It must be the concern of this court too. The average rate per square foot or a meter of a number of nearby buildings on ground floor premises in which similar traders are exercised are among other things relevant to assessing the rent that would reasonably be expected in the open market.”

12. According to the valuation report by the Landlord, the rent increment is by Kshs. 11,300/= a 75% increment. The parties have not supplied any evidence as to the duration of time the Tenant has been in the premises and for how long the Tenant has been paying the rent of Kshs. 15,000/=. In order to meet the test of reasonableness, I will increase the rent by 50% which translates to a monthly rent of Kshs. 22,500/=.

13. Consequently, the tenancy notice is approved with the alteration that the rent is now assessed at Kshs. 22,500/= per month.

14. The effective date for the new rent will be 1. 05. 2025.

15. Each party will bear their own costs.

16. This file is closed.

DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 30THDAY OF APRIL, 2025. HON. CYPRIAN MUGAMBICHAIRPERSONBUSINESS PREMISES RENT TRIBUNALDelivered in the presence of Mr. Omwenga for the Landlord and in the absence of the Tenant