[2020] KEBPRT 59 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

TRIBUNAL CASE NO 18 OF 2019 (MOMBASA)

CAREENAS HOLDINGS..................................................TENANT/APPLICANT

VERSUS

NAWAB MOHAMED HAJI MIRORI....................LANDLORD/RESPONDENT

JUDGEMENT

The Landlord/Respondent in the above reference served the Tenant/Applicant with the notice dated 14th January 2019 seeking to increase the rent payable by the Tenant/Applicant in the reference from shs 25,000 to shs 81,400 with effect from 1st April 2019.

The Tenant/Applicant did not wish to comply with the Landlord’s notice and filed a reference in the Tribunal under section 6 of Cap 301. The parties to the reference have filed the valuation reports. The mandate of the Tribunal now is to evaluate the valuation reports taking into account the provisions of section 9 of Cap 301 and make a determination of the reference.

Summary of the Landlord’s Valuation Report:

The Landlord’s valuation report has been prepared by Wesco Property Consultants. The valuation report is dated 29th November 2018 and was filed in the Tribunal on 8th May 2019.

PW 1:

The suit premises is Mombasa Block XXI/595 situate. The property is situated at the junction of Moi Avenue and Modhar Mohamad Habib Road on Mombasa Island in Mombasa County. The above details are captured in page 2 of the valuation report;

Lettable area

Shop 38. 28 M2

Store 18. 0625M2

Current rent Shs 25,000

Analysis shop 525. 750 PM2

Store 375. 375 PM2

Comparables

The Landlord’s Valuers’ report has 4 comparables

Comparable No 1 is on Modhar Mohamed Road. Lettable area is within the comparable limit.

Comparable No 2 is on Moi Avenue. The comparable has a bigger lettable area.

Comparable No 3 is on Modhar Momahed Road. The lettable are is bigger than the suit premises.

Comparable No 4 is on Sauti ya Kenya Road. The comparable is not within the immediate neighborhood of the suit premises and the Tribunal does not consider the same suitable.

The Landlord’s valuer recommends a monthly rate of shs 81,400, see page 4 of the valuation report.

Summary of the Tenant’s Valuer Valuation Report:

The Tenant’s valuation report has been prepared by Musyoka and Associates. The report is dated 15th May 2019 and was filed in the Tribunal on 29th May 2019.

Situation:

The Tenant’s valuer’s report is in total agreement with the Landlord’s valuation report on the situate of the suit premises.

Lettable area

Shop 38. 00M2

Store 18. 00M2

The lettable area is more or less the same as that of the Landlord’s valuer. The Tribunal will adopt the lettable area as per the Tenant’s valuation report to safequard the Tenant from any possible prejudices and/or exploitation by the Landlord. This is set out in the preamble to Cap 301.

Comparables:

The Tenant’s valuation report has 4 comparables.

Comparable No 1

Plot No 125, comparable No 2, 3 are on Mondar Road.

Comparable No 4 is stated to be on the same premises. The Tenant’s Valuer has recommended a monthly rent of shs 37,938.

Evaluation of the Valuation Reports:

The Tribunal upon consideration of the valuation reports makes the following findings

1. The comparables in the Tenant’s valuation report comparables 1, 2 and 3 are on Mondar Road and do not enjoy the frontage of Moi Avenue as the suit premises. The comparables do not have the same advantages of the suit premises.

2. Comparable from the suit premises is not a good comparable taking into account that the Landlord is seeking to increase rent in same building. The rent payable by the Tenant in the same could also be rent which is did for review.

The Tribunal has serious doubts on the credibility of the information in comparable No 4 which puts the analysis at shs 434. 00M2 square which is below the rate currently being paid by the Tenant.

3. Landlord’s comparables Nos 1 and 2 plot No. 43 and 44 enjoy more or less the same advantages as the Tenant in the suit premises. The average of the 2 comparables is

1. 834. 638 + 1600. 00

2

= Shs 1. 717. 319 per meter per month

The Tribunal does not consider the Landlord’s comparables 3 and 4 very suitable.

4. The Tribunal notes that the suit premises comprises of a 3 storey commercial property consisting of shops and stores on the ground floor. The valuers of both parties have not given any credible reasons why the rent payable by the other Tenants were not property interrogated. The Tribunal also noted that the suit premises is adjacent to many other plots. The valuers have not given any credible reasons why they ignored the rent payable in the adjacent plots.

5. In the light of the above very unsatisfactory findings by the Tribunal, it is the Tribunal’s considered view that the average between the Landlord’s comparable Nos 1 and 2 and the rate recommended by the Tenant’s valuer of shs 807. 00 per meter per month yields a fair open market rate.

That is shs 1,717. 319 + 807. 00 = 2. 54. 319

2

which is shs 1,262. 159 for the main shop and half rate of shs 631. 079 per square meter in respect of the store.

The Tribunal assesses the open market rent in respect of the premises as hereunder;

Shop 38. 00M2 x 1,262. 159

= shs 47,962. 042

Store 18. 00M2 x 631. 079

= Shs 11359. 422

Total 59321. 464

Round shs 59,500

The Tribunal makes the following determination of the reference;

Orders

1. The rent payable by the Tenant is assessed at shs 59,500 plus VAT with effect from 1st April 2019.

2. The Tenant shall pay the arrears of rent arising out of this judgement within 6 months from the date of judgement in default the Landlord shall be at liberty to recover the same by way of distress.

3. The Tenant shall pay the Landlord costs of the reference.

4. Costs shall be agreed or shall be taxed by the Tribunal in the next session.

Judgement delivered this 30th day of January 2020 in the presence of Hassan for the Landlord. Tenantin person present.

MBICHI MBOROKI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL