[2025] KEBPRT 311 (KLR)

Carlton Investments Limited v Nadiano Car Hire Company Limited (Tribunal Case E1380 of 2024) [2025] KEBPRT 311 (KLR) (13 June 2025) (Ruling)

Neutral citation: [2025] KEBPRT 311 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E1380 of 2024

CN Mugambi, Chair

June 13, 2025

Between

Carlton Investments Limited

Claimant

and

Nadiano Car Hire Company Limited

Respondent

Ruling

Introduction 1. The Landlord’s notice to terminate tenancy dated 29. 4.2024 is brought on the grounds;“That the Tenant has defaulted in paying rent for a period of two months after such rent has become due or payable and has persistently delayed in paying rent which has become due and payable.”

2. The notice pronounces itself to be effective from 1. 7.2024.

The Landlord’s Case 3. The evidence of the Landlord was led by Mr. Vinjay Kantaria, a director of the Landlord. The witness sought to and was allowed to rely on his witness statement dated 13. 12. 2024 and also produced the documents in his list of documents as exhibit Nos. 1-8. He also produced as exhibit No. 9, the document in his supplementary list of documents dated 8. 4.2025. He further informed court that the Tenant had failed to pay rent and therefore the Landlord was seeking termination of tenancy and vacant possession of the premises.

4. The Landlord’s witness statement dated 13. 12. 2024 may be summarized as follows;-a.That the Landlord is the proprietor/registered owner of the land known as L.R. 1870/IV/112 wherein the Tenant carries on the business of a fitness and health club.b.That on 1. 01. 2017, the Landlord entered into a tenancy agreement with the Tenant for a period of five years and three months lapsing on 31. 3.2022. c.That upon the expiry of the lease, the parties entered into another lease for a period of one year and three months (1. 4.2022 to 30. 6.2023).d.That eleven (11) days to the expiry of the lease, the Tenant filed a suit against the Landlord at the Tribunal.e.That as at 30. 6.2023, the Tenant was in rent arrears amounting to Kshs. 1,119,788. 69/= and on 30. 4.2024 the Landlord issued a notice of termination of tenancy dated 29. 4.2024 effective 1. 07. 2024. f.That the Tenant did not file any Reference in opposing the notice as a consequence of which the notice became effective on 1. 07. 2024 but the Tenant has failed to vacate from the suit premises.g.That as at the time of the Landlord’s statement (13. 12. 2024) the Tenant had outstanding rent arrears in the sum of Kshs. 1,581,788. 69/=.

5. UPON cross examination by the Counsel for the Tenant, the responses by the Landlord’s witness may be summarized as follows;-a.That the rent owed is Kshs. 1,016,000/= and the arrears date from 1. 12. 2023. b.That the renovations carried out by the Landlord did not affect the Tenant’s gym.c.That the witness is not aware of any demand made to the Tenant to change/replace his gym equipment because it was outdated.d.That the witness is aware of a previous case where the issue of rent was to be determined.e.That the Landlord did not send any auctioneers to the Tenant’s premises after the court issued orders.f.That the rent currently outstanding is Kshs. 1,963,788. 69/=.g.That the Tenant is not aware of any renovations at the parking which denied the Tenant parking space for sixty-eight (68) months. Neither is he aware that half of the gym was closed for close to two years.h.That it is not true that the Landlord took half of the suit premises for its office use.i.That the residents were not using the gym facility for free.

The Tenant’s Case 6. The Tenant adopted as his evidence his affidavit sworn on 1. 3.2025 and also produced the documents in his list of documents dated 25. 3.2025 as exhibits 1-4. His evidence in chief may be summarized as follows;-a.That the Tenant is in occupation and still paying rent.b.That the rent in question was brought about by the oppression and frustration visited upon the Tenant by the Landlord.c.That the Tenant has been bullied by seven Landlords and to whom he has to answer and as a result of which his business finances fell into disorganization.d.That the Landlords chased the Tenant’s clients from the parking lot and the Tenant had to hire an alternative parking lot at an extra cost. The Landlord demolished the external car park and due to the parking problem, the Tenant lost clients.e.That one of the Landlords went to the suit premises and removed the Tenant’s equipment like Zuku wires and this caused the Tenant’s clients a lot of stress, the Tenant reported to the Landlord’s chairman.f.That whenever the Tenant reported to the Landlord’s management, the Landlord would issue the Tenant with verbal termination of tenancy threats.g.That the Landlords Tenants and the Landlords close family relations trained at the Tenant’s gym for free for the last fourteen years.h.That the Landlord would send auctioneers to the suit premises while the gym was busy.i.That the Landlord demolished the gym’s changing rooms and the gents steam room which accounted for 10% of the Tenant’s income. The cardio room was also demolished, it is at the core of the Tenant’s business.j.That the Landlords also demolished the aerobics room which accounts for 20% of the Tenant’s business income. The shop and the swimming pool changing rooms were also destroyed and clients could no longer swim in the premises.k.That the Tenant kept on borrowing money to pay rent even as the Landlords kept on demanding that he either pays the rent or vacates the premises.l.That the Landlords demanded that the Tenant brings in new equipment for the gym to suit their standards, the Tenant obliged them and brought in equipment and new treadmills at a cost of Kshs. 4. 9 million.m.That after the renovations, the Landlord refused to surrender back the original space to the Tenant and took approximately 1,500 square feet and converted the same to a restaurant.

7. UPON cross examination by Counsel for the Landlords, the responses of the Tenant may be summarized as follows;-a.That he has had three leases with the Landlord 2011-mid 2016, 2016-2021, 2012-July 2023. b.That the renovation was done in phases and there have been no renovations since the lase lease.c.That the Tenant is not sure of the apartments in the same area as the suit premises but he serves their Tenants from St. James Park.d.That the Tenant’s lease does not provide for parking.e.That the Tenant did not provide the CR12 FORM for the Landlord.f.That the court in BPRT Case No. E068/2023 required the Tenant to pay rent from 1. 12. 2023. g.That the Tenant does not agree that he owes the Tenant rent arrears of more than Kshs. 1,000,000/=.h.That the Tenant only admits owing the Landlord the rent that had accumulated before the court issued orders.i.That the last renovation was carried out in the year 2020. j.That the Landlord was cutting trees and fixing cabrals on the external city council parking but the Tenant never reported the incident to the city council and the city council never took any action against the Landlord.k.That the termination of the Tenant’s services by his clients had everything to do with the conduct of the Landlord.l.That the Tenant has not attached any documents to show the demolitions upon the suit premises and neither does he know if each Tenant has a parking slot.

Analysis and determination 8. The only issue that arises for determination in this Reference is whether the Landlord has proved and/or established the grounds upon which it seeks to terminate the tenancy and therefore whether the Tribunal ought to approve the notice or dismiss the same.

9. The determination of this dispute revolves around the determination of whether the Tenant owes the Landlord any rent. A perusal of exhibit 9 produced by the Landlord, a statement of the rent account for the Tenant clearly shows that the Tenant had as at 1. 3.2025, a rent balance of Kshs. 1,881,788/=. The Tenant who was served with the said exhibit did not at the hearing of this matter challenge any entries in the said document which covers the period of 31. 12. 2019 to 1. 3.2025.

10. I also note that by a letter reference C/PMN/1863 Counsel for the Landlord demanded rent which was outstanding at Kshs. 1,119,788. 69/= as at July 2023.

11. Whereas the Tenant denies owing the Landlord any rent arrears, he at the same time asserts that the arrears he accumulated can only be blamed on the Landlord. At paragraph 8 of the replying affidavit sworn by the Tenant on 1. 3.2025, the Tenant depones as follows;-“That regarding the claim of rent arrears, I do not admit to the sum of Kshs. 1,119,788. 69/= or any other arrears claimed by the Landlord/Applicant. I assert that the arrears accumulated due to the actions of the Landlord which significantly interfered with any ability to operate this business effectively. These actions led to business losses and the amount claimed is under dispute… which is yet to be determined.”It is obvious from the above deposition that the Tenant admits to owing rent but blames that state of affairs on the conduct of the Landlord which I have earlier set out in detail.

12. Although the Tenant blames the Landlord for the bad business environment that led to its losses and which were allegedly mostly occasioned by the alleged renovations, I also note that the Tenant told the court that no renovations have been carried out since the date of the last lease agreement. The Landlord also clearly stated that the problems with rent payment started from around December 2023. The letters terminating the gym services by various clients are dated 7. 1.2019 (AGRA) 20. 2.2016 (power in my pocket) 23. 8.2018 (Glovo). These terminations and threats to terminate were clearly issued long before the year December 2023 when the Tenant started to default in the payment of rent.

13. Like I have stated elsewhere in this Ruling, the Tenant had the opportunity of challenging the entries in the Landlord’s exhibit 9 item by item but it did not. The statement by the Landlord is detailed and I have no reason to doubt it.

14. I am also not satisfied that the non-payment of rent by the Tenant can be linked to the alleged renovations in the suit premises and no clear evidence has been led and/or produced to demonstrate the said linkage. In this case, the Landlord’s rent was payable without any deductions.

15. I am in the circumstances satisfied that the Landlord has proved its notice as far as the ground for non-payment of rent is concerned. A Landlord can terminate tenancy for non-payment of rent under.Section 7(1)(b) of Cap 301; which provides as follows;-“That the tenant has defaulted in paying rent for a period of two months after such rent has become due or payable or has persistently delayed in paying rent which has become due or payable.”

16. Even if I was wrong on the above conclusion, I would still approve the Landlord’s notice to terminate tenancy. the Tenant does not deny that it was served with the notice to terminate tenancy dated 29. 4.2024 on 30. 4.2024. indeed, an affidavit of service to that effect has been filed by the Landlord. The Tenant, upon receipt of the notice to terminate tenancy was required under the provisions of Section 6(1) of Cap 301, to file a Reference to the Tribunal if it was minded to oppose the notice. The said Section provides as follows;-“A receiving party who wishes to oppose a tenancy notice and who has notified the requesting party under Section 4(5) of this Act that he does not agree to comply with the tenancy notice, may before the date upon which such notice is to take effect, refer the matter to a tribunal whereupon such notice shall be of no effect until and subject to the determination of the reference by the Tribunal.”

17. Consequent to the failure by the Tenant to file a reference to the Tribunal, the notice became effective on the date indicated therein and as per the provisions of Section 10 of Cap 301 which provides as follows;-“Where a Landlord has served a notice in accordance with the requirements of Section 4 of this Act on a Tenant and a Tenant fails to within the appropriate time to notify the Landlord of his unwillingness to comply with such notice or to refer the matter to a Tribunal, then subject to Section 6 of this Act, such notice shall have effect from the date therein specified to terminate the tenancy or terminate or alter the terms and conditions thereof or the rights or services enjoyed thereunder.” 18. The Tenant has held the position that it filed a Reference in case No. E068 of 2023. I have perused the said file and note that what the Tenant filed in the said suit is a Reference under Section 12(4) of Cap 301 which in my view cannot be equated to the Reference under Section 6(1) of Cap 301. In any event, the notice in the instant case was served upon the Tenant on 30. 4.2024 and it is dated 29. 4.2024. The proceedings undertaken by the Tenant in the year 2023 cannot therefore be used as an answer to the Landlord’s notice issued in the year 2024. Further, I do not think the filing of a Reference under Section 12(4) of Cap 301 in any way bars a Landlord from seeking to terminate a tenancy by issuing a notice so to do under Section 4(2) of Cap 301. It is also rather obvious that no proceedings to terminate a tenancy can be commenced by proceedings under Section 12(4) of Cap 301. [See Section 4(1) of Cap 301 in support of this proposition.].

19. Either way, whether on consideration of the evidence or on placing reliance on Section 4(2), 6(1) and 10 of Cap 301, the Tribunal would have and hereby proceeds to approve the Landlord’s notice to terminate tenancy dated 29. 4.2025.

Disposition 20. In the final analysis and in concluding this matter, I will make the following orders;-a.That the terms of the tenancy notice dated 29. 4.2024 are hereby approved.b.That the tenancy between the parties herein is hereby terminated.c.That the Tenant will render vacant possession of the suit premises within the next sixty (60) days of the date of this Ruling, FAILING which, the Landlord will be at liberty to forcefully evict the Tenant using a licensed auctioneer.d.That the Tenant will pay the rent arrears up to and including the rent for the two months within which it ought to have left the suit premises.e.That the Tenant will bear the costs of the suit.

DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 13TH DAY OF JUNE 2025HON. CYPRIAN MUGAMBI - CHAIRPERSONBUSINESS PREMISES RENT TRIBUNALDelivered in the presence of Mr. Ogude for the Tenant and Mr. Maonke for the Landlord