Wainaina & another v Mahinda & another [2022] KEBPRT 254 (KLR)

Wainaina & another v Mahinda & another (Tribunal Case E692 of 2021) [2022] KEBPRT 254 (KLR) (8 July 2022) (Ruling)

Neutral citation: [2022] KEBPRT 254 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E692 of 2021

Gakuhi Chege, Vice Chair

July 8, 2022

Between

Regina Wainaina

1st Applicant

Barnabus Wainaina

2nd Applicant

and

Susan Mahinda

1st Respondent

Cardon Services

2nd Respondent

Ruling

1. Through a reference dated November 18, 2021, the tenant moved this Tribunal under section 12(4) of cap. 301, Laws of Kenya complaining that the landlord had served her with an illegal notice requiring that she vacates from the suit property.

2. She also filed a motion dated November 18, 2021seeking for a restraining order against the Respondents from any interference with the tenancy. The application is supported by the tenant’s affidavit of even date.

3. The 2nd Respondent served the tenant with a notice dated September 30, 2021 notifying her that the lease agreement signed on October 29, 2016 for a period of 5 years was expiring on October 31, 2021. It stated that the tenant had not requested for renewal two months before expiry of the five years lease agreement.

4. The tenant was by the said letter requested to hand over the suit property to the owner as agreed by November 1, 2021. According to the tenant, the said notice is defective and illegal and ought to be dismissed with costs as it is contrary to cap. 301, Laws of Kenya.

5. Interim orders were granted on November 23, 2021pending hearing inter-partes and the tenant was ordered to continue paying rent at Kshs.10,000/- per month.

6. On the other hand, the 1st Respondent filed a replying affidavit sworn on February 4, 2022 by which she opposes the tenant’s case stating that the parties entered into a tenancy agreement on September 23, 2016 for a period of 5 years starting from October 1, 2016. The agreement is exhibited as annexure “SMGN-1”.

7. Under the agreement, the tenant was to issue a two (2) months notice if she opted to renew the tenancy after the initial lease expired. The rent was to be revised to the current market rate. However, the tenant did not show interest in such a renewal and the landlord wrote a letter dated September 30, 2021to the said effect. She required the tenant to hand over the premises by November 1, 2021. The letter is marked ‘SMGN2’.

8. As such, the landlord denies that the notice to vacate was illegal. The tenant declined to sign the new lease prepared by the landlord marked ‘SMGN3’.

9. According to the landlord, rent for the suit premises was increased to Kshs.45,000/- per month as per the unsigned lease agreement but the tenant continued to pay Kshs 10,000 which is the old rate.

10. It is the Respondents’ contention that they do not intend to evict the tenant and subtenant but require them to enter into new tenancy agreement and if opposed to vacate therefrom.

11. The matter was ordered to proceed by way of written submissions and both parties complied. I shall address the submissions together with issues for determination.

12. The following issues arise for determination in this case:-a.Whether the tenant is entitled to the reliefs sought herein.b.Who is liable to pay costs of the suit?

13. Section 12 (4) of cap 301, Laws of Kenya provides as follows:-“In addition to any 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:.

14. The present complaint is based on the foregoing section and I am thus entitled to determine it together with the application as both raise the same issues.

15. There is no dispute that the 1st Applicant/Tenant and the 2nd Respondent/Agent entered into a tenancy agreement dated 23rd September 2016 in respect of the suit premises for a period of 5 years with effect from 1st October 2016.

16. Clause 8 of the said tenancy agreement provided as follows:-“If the tenant shall desire to renew this agreement on the expiry of the present term, the tenant shall give the agent a notice of two months in writing and observe all conditions herein agreed, the agent will offer another period of two years with a revised rent at prevailing market rates”.

17. The tenant did not apply for renewal of the agreement and the landlord through the 2nd Respondent notified her to hand over the property by 1st November 2021. This precipitated the instant complaint.

18. According to the tenant’s counsel, the said notice did not comply with section 4 of cap. 301, Laws of Kenya. The tenant’s counsel cites the case of Jacqueline Lorraine Akello v Kenya Medical Properties Limited & 2others (2021) wherein this Tribunal outlined the procedure of terminating a controlled tenancy.

19. According to the tenant’s counsel, the notice was not in the prescribed form and it was for a period of less than two months. In addition, the applicants were not offered an opportunity to respond to the notice. It is further submitted that the Respondents did not comply with the said law when they reviewed the terms of the lease agreement to increase rent. They submit that they were ready to vacate the premises upon being issued with a proper notice.

20. On the other hand, the landlord’s counsel argues that the lease between the parties was for a fixed term. It was therefore a contract binding both parties and the tenants ought to have vacate from the suit premises upon expiry of the lease or renew the same if they wished to remain in occupation. Having failed to issue notice of two months, the lease expired by effluxion of time.

21. The Respondents’ counsel argues that the mere fact that the landlord continues to accept rent does not automatically suggest acceptance for the tenant to continue taking possession of the property under section 60(2) of the Land Act.

22. Although the Respondent’s counsel has quoted the provisions of section 60(2) of the said Act, he has failed to state that if the lessor continues to accept rent from a tenant who remains in possession for two months, after the termination of the lease, a periodic lease from month to month shall be deemed to have come into force”.

23. It is admitted that the landlord continued to accept rent after expiry of the tenancy period and as such, the relationship between the parties changed into a controlled tenancy which is protected under section 2(1) of cap. 301, Laws of Kenya. Had the landlord expressly stated that the amount paid after expiry of lease is ‘mesne profits’, I would have treated the matter differently. As matters stand, the landlord and agent will have to contend with the provisions of section 4 of cap 301, Laws of Kenya by giving notices either to terminate or increase rent payable by the tenants.

24. The tenants do not claim ownership rights over the suit property and as such article 40 of the constitution of Kenya has no application to this matter. The case of Kasturi Limited v Nyeri Wholesalers Limited (2014) eKLR is clearly distinguishable from the facts of this case since in the said case there was no acceptance of rent after expiry of the lease for more than two months as set out in section 60(2) of the Land Act, 2012 which was formerly section 52 of the repealedregistered landcap 300 Laws of Kenya (see the case of Aroko v Ngotho &another(1991) eKLR).

25. I am therefore satisfied that the applicants tenancy in the suit premises was not terminated by expiry of the tenancy agreement since there was acceptance of rent after that event.

26. Costs always follow the event and are in the court’s discretion. I have no good reasons to deny the tenants costs.

27. In conclusion, the following orders commend to me:-i.The Respondents are restrained from interfering with the tenants’ occupation and quiet enjoyment of the suit premises situate on plot no 100 Ongata Rongai measuring 14 ft by 40ft without following the provisions of the Landlord and Tenant (shops, Hotels & Catering Establishments) Act, cap 301, Laws of Kenya.ii.The Landlord shall be at liberty to issue notice under section 4(2) of the said Act upon the tenants.iii.The landlord shall pay 20,000 as costs to the tenants which shall be deducted from the rent account unless paid before expiry of Thirty (30) days hereofiv.The OCS Ongata Police Station shall enforce compliance with order (i) above.It is so ordered.

RULING DATED, SIGNED AND DEVELIVERD VIRTUALLY THIS 8TH DAY OF JULY 2022. HON. GAKUHI CHEGEVICE CHAIRBUSINESS PREMISES RENT TRIBUNALIn the presence of:Miss Mukundi for the Tenants/ApplicantNo appearance for the Respondents