Thomas v Muranga Highway Pub & another [2023] KEBPRT 1321 (KLR)

Thomas v Muranga Highway Pub & another (Tribunal Case E540 of 2022) [2023] KEBPRT 1321 (KLR) (31 May 2023) (Ruling)

Neutral citation: [2023] KEBPRT 1321 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E540 of 2022

CN Mugambi, Chair

May 31, 2023

Between

Adiel Mate Thomas

Applicant

and

Muranga Highway Pub

1st Respondent

Markie Investment

2nd Respondent

Ruling

1. The landlords notice to alter terms of tenancy is the one dated 17. 5.2022. it seeks to increase rent up to Kshs. 6,000/= with effect from 1. 8.2022. The grounds upon which rent is sought to be increased are that the rent paid by the tenants is far much below the market rates.

2. By a reference to the Tribunal dated 23. 6.2027, the tenant has objected to the alteration notice and hence these proceedings.

3. Both parties have filed their respective valuation reports and which I summarize as follows hereunder.

The Landlord’s Valuation Report 4. The landlords valuation report is the one prepared by upcountry valuers. The report has the following comparables;-Plot No. Lettable area Sq. ft Rent per sq. foot (Kshs.) Monthly rent (Kshs.)

a. Block 2/101 130 177 10,000/=

b. Block 2/103 139 36 5,000/=

c. Block 2/93 130 115 15,000/=

d. Block 2/529 123 53 6,500/=

e. Block 2/106 308 39 12,000/=

f. Block 2/93 116 60 7,000/=

g. Block 2/93 204 50 5,000/=

h. Block 2/101 277 36 10,000/=

i. Block 2/101 204 49 10,000/=

j. Block 2/529 120 29 3,500/=

k. Block 2/101 179 112 20,000/=

l. Block 2/94 1000 90 90,000/=

m. Block 2/47 350 69 24,000

n. Block 2/106 561 36 20,000/=

o. Block 2/107 352 57 20,000/=

p. Block 2/ 286 70 20,000/=

5. The average rent per square foot as from the report is Kshs. 72/= per square foot per month.

The Tenant’s Valuation Report 6. The tenant’s valuation report is the one prepared by Metropole Realtors. The report on its last page has the following remarks;a.As noted earlier in the report, application for an official title search was unsuccessful since the previous leasehold interest of the plot has expired meaning the previous registered owners have currently no existing interest in the plot.b.Market and rental market values are based on the interest that one has in any particular property. We therefore cannot put any value in the property until the lease has been renewed. We have not been given any proof that this has been achieved yet.c.Subject to our terms of reference, limiting conditions and general remarks, we are not able to value L.R. No. Murang’a Municipality Block 11/102 due to lack of an existing interest.

7. It is clear from the conclusion reached by the tenant’s valuers that; no market rates were assessed by the said valuers.

8. I have seen the certificate of lease for Murang’a Municipality/Block 11/102. The term of the lease is 99 years from 1. 1.1983 and the certificate of lease was issued on 12. 2.1997. clearly, the lease has not expired as suggested by the tenants valuers.

9. The tenant occupies shop No. A3 in L.R. No. Murang’a Municipality/Block 11/102 and according to the tenant’s letter dated 16. 6.2022, the tenant pays a monthly rent of Kshs. 4,060/=. The tenant’s shop occupies 179 square feet, which according to the average adopted by the landlords valuers translates to a monthly rent of Kshs. (179 x 72) 12,888/=.

10. Faced with the two valuation reports and for the purposes of determining this reference, I will adopt the valuation report by the landlord’s valuers as the better report.

11. Consequently, I approve the landlord’s notice to alter the terms of tenancy and order that the new rent shall be Kshs. 6,000/= per month. The effective date shall be 1. 6.2023.

12. The tenant’s reference is dismissed with costs to the landlord assessed at Kshs. 30,000/=.

RULING DATED, SIGNED & DELIVERED VIRTUALLY THIS 31ST DAY OF MAY, 2023HON. CYPRIAN MUGAMBICHAIR PERSON31. 5.2023In the presence of;-No appearance of parties