[2025] KEBPRT 182 (KLR)

Chakaya (Administrator of the Estate of Naphas Chakaya) v Kiarie (Tribunal Case E101 of 2023) [2025] KEBPRT 182 (KLR) (14 March 2025) (Ruling)

Neutral citation: [2025] KEBPRT 182 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E101 of 2023

CN Mugambi, Chair

March 14, 2025

Between

Fredrick Goi Chakaya

Landlord

Administrator of the Estate of Naphas Chakaya

and

Harrison Muchai Kiarie

Tenant

Ruling

1. The Landlord’s notice to terminate tenancy dated 24. 3.2023 is brought on the following grounds:-a.That the Tenant has rent default from January 2021 to March 2023 at Kshs 23,000/= per month; total rent arrears Kshs 621,000/=.b.Lease term expired between the Landlord and the Tenant.c.The Tenant has breached the lease term by not paying rent and has allegedly constructed on the premises and sublet the same to three Tenants.

2. The Landlord has also filed a Reference under Section 12(4) of Cap 301 and his Complaint against the Tenant is that the Tenant has substantially breached the tenancy Agreement and that the Tenant has been served with a notice to terminate tenancy for being in rent arrears for eighteen (18) months.

The Parties Evidence 3. The evidence of Mr. David Ntara Arimi of ADN Advisory Valuers may be summarized as follows;-a.That he is a registered Valuer and a member of the Institute of the Surveyors of Kenya (ILISK) with over thirty (36) six years’ experience.b.That he received instructions from court to carry out the valuation of the improvements on LR No Bahati/Bahati/1/846 situated at Maili Kumi trading center.c.That he visited the premises in the presence of the Tenant and Counsel for the Landlord and thereafter prepared a report.d.That item No 1 in his report was classified as a permanent building due to the nature of the materials used in its construction.e.He described a permanent building as one that can last for fifty (50) years and further stated that a semi-permanent structure is neither permanent nor temporary and is made of timber and iron sheets for example.f.The Valuer further testified that temporary buildings have a life span of five (5) to fifteen (15) years and that fixtures are generally considered to be temporary structures, they can be detached and transported away, can be on the surface or the underground.g.That the valuation for the items contained in his report came to Kshs 1,290,000/=.

4. Upon Cross Examination by Mr. Gai Counsel for the Landlord, the responses by the witness may be summarized as follows;-a.That the valuation of unseen items is an assumption.b.That he got comparables from similar businesses.c.That item Numbers 2 to the last item in the valuation report are all temporary structures.d.That item Number 1 is a permanent structure.e.That the witness did not get to see the fuel tanks as they were underground; he valued them by their capacity given to him by the Tenant.f.That the witness did not get the value of the tanks from the Tenant.g.The sheds are still in existence.h.That the witness was not aware that the Tenant wanted to offset his rent arrears with the value of the structures in the suit premises.

Mr. Fredric Gai Chakaya 5. The evidence of the Landlord, Mr. Fredrick Gai Chakaya may be summarized as follows;-a.That he is the Administrator of the estate of his late father.b.That the Tenant took up tenancy of the premises at an agreed rent of Kshs 20,000/= for the first three years and Kshs 23,000/= for the fourth and fifth years.c.That the Tenant has not paid any rent since the year 2021 and has also refused to pay an electricity bill of Kshs 93,000/=.d.That the Tenant illegally took away three pumps, a generator, pressure machine, iron bar and tank covers.e.That the witness had a problem with the valuation report as it included valuation of permanent structures while the Tenant was only to construct temporary structures.f.That the Tenant had no letter (authority) from the County Government to put up permanent structures.g.That the Tenant and the father of the witness had a lease which expired and was never renewed.h.That the witness duly informed the Tenant that his lease would not be renewed.i.That the Tenant put up structures in the suit premises and sublet the same even as the lease agreement did not allow the Tenant to put up the structures and/or sublease the same.j.That the Tenant and his sub-tenants have since left the premises, the Landlord did not evict the Tenants.k.That the Tenant constructively vacated the suit premises and carted away items against express court orders and also failed to pay the rent of Kshs 200,000/= as ordered by the court.l.That the Tenant had paid Kshs 170,000/= in installments after the demised of the Landlord’s father.m.That the Tenant cannot deny that the witness is his Landlord yet he has been paying rent to the witness who is an administrator of his father’s estate.n.That the only consent the Tenant had from the deceased father of the witness was for the construction of temporary structures.o.That the Tenant is not entitled to any compensation and further the Landlord does not require/need the Tenant’s structure.p.The Landlord adopted his witness statement and produced the documents in his list of documents as his exhibit Numbers 1-13. q.The Landlord also sought orders that the Tenant pays rent arrears of Kshs 690,000/= and an electricity bill of Kshs 93,000/=.

6. Upon Cross Examinaton by the Tenant, the responses of the Landlord may be summarized as follows;-a.That he is a co-administrator of the Estate of his late father and he has the blessings of his mother and step mother to bring these proceedings.b.That the Landlord did not chase the Tenant out of the premises.c.That the fuel tanks were not visible for valuation.d.That the Landlord has never hired any watchman or used goons in the suit premises.e.That the electricity was disconnected while the Tenant was still in the suit premises.

Joram Ariero Mwambuchi 7. The evidence of the above witness who testified on behalf of the Landlord may be summarized as follows;-a.That he was the caretaker of the suit premises during the lifetime of the deceased Chakaya whom he had known since he was a young man.b.That he knows the current Landlord as the son of the deceased Mr. Chakaya who is also the administrator of his father’s Estate.c.That he is still the caretaker of the premises.d.That he knows the Tenant who used to run a petrol station in the suit premises.e.That the Tenant left after he could not pay rent and the electricity bill.f.That the fuel pumps are no longer in the suit premises.g.That the witness does not live at the premises and only discovered the items were missing.h.That the witness was informed by the watchman that the Tenant in the company of four other persons removed the pumps.i.That the Tenant is not currently in the premises and only the building remains.

8. On Cross Examination by the Tenant, the witness’ responses may be summarized as follows;-a.That the Tenant found him at the suit premises.b.That the witness is the one who served the Tenant with the notice to terminate tenancy.c.That the Tenant was not chased out of the suit premises which now lies idle.d.That the valuation was done after the pumps were removed and the Tenant was seen at the station the morning after the pumps were removed.e.That the Tenant paid to the witness only Kshs 70,000/=.f.That at Bahati Police Station, the Tenant confirmed that he knew where the removed pumps were kept.

The Tenant’s Case 9. The evidence of Mr. Muchai, the Tenant may be summarized as follows;-a.That he took up tenancy of the suit premises in the year 2015 and trouble started in the year 2020 when he closed the premises for two years due to Covid 19 pandemic.b.That the Tenant had trouble with the fuel suppliers and he requested the Landlord to allow him more time to re-organize his business, the Landlord refused and instead brought the matter to court.c.That the Tenant left the site in the year 2023 and has not been there since then.d.That the Tenant left the site after the Landlord sent goons to frustrate the Tenant.e.That the Tenant cannot still access the premises.f.That the Tenant constructed the building in the suit premises on the requirements of EPRA and the same is valued at Kshs 1,000,000/=.g.That the Tenant is ready and willing to take away all the other movable from the site.

10. Upon Cross Examination by Counsel for the Landlord, the Tenant responses may be summarized as follows;-a.That he has no written agreement with any of the other administrators.b.That though he mentions goons in his evidence, he has not reported any incident concerning the goons to the police.c.That he owes the Landlord rent.d.That the electricity bill was in the name of the deceased.e.That the Tenant has no control over the electricity meter which is located at the Landlord’s premises.f.That though there was a court order that the Tenant pays rent, he has not done so.g.That the purpose of the valuation was in connection with clause 13 of the Lease Agreement under which the Landlord was to purchase the permanent fixtures.h.That the Tenant had made a verbal request for the renewal of the lease agreement to one of the administrators.i.That the Tenant did not have any written consent from the Landlord allowing him to construct the building in the premises.j.That the Tenant did not table any approved plans before the Tribunal.k.That the Tenant received a demand letter for rent and a reminder informing him that his lease would not be renewed.l.That by the time the valuation was carried out, the premises had been vandalized.m.That the pumps were taken by the suppliers.n.That only the land belonged to the Landlord, the other fixtures belonged to the Tenant and the suppliers.o.That the permanent structure will remain on the premises and the Landlord is to purchase the same.p.That the Tenant admits owing the Landlord rent in the sum of Kshs 490,000/=.q.That he left the premises around the year 2023 by which time the electricity bill was Kshs 20,000/=.

Analysis and determination 11. It is a common ground in these proceedings that the Tenant is no longer in the suit premises having left the same sometimes in the year 2023. It is also admitted by the Tenant that he owes the Landlord rent in the sum of Kshs 490,000/= although the Landlord places the figure at Kshs 690,000/=. The Tenant also admits that there was an electricity bill of Kshs 20,000/= when he left the suit premises while the Landlord places the figure at Kshs 93,000/=.

12. The issues that arise for determination in this dispute are in my view, the following;-AWhether the Landlord is owed rent and if so, how much?BWhether the Tenant is entitled to be compensated for the building that he put up in the suit premises.CWhether the Landlord’s notice to terminate tenancy should therefore be allowed and on what conditions.DWho should bear the costs of these proceedings

Issue A: Whether the Landlord is owed rent and if so, how much? 13. The Landlord’s claim is based on his notice to terminate tenancy wherein it has been stated that the Tenant has not paid rent from January 2021 to March 2023. The Tenant in his evidence has admitted that he did not pay rent for the said period until he left sometimes in the year 2023. The lease agreement dated 21. 9.2018 clearly stipulated that the rent payable was to be Kshs 20,000/= for the first two years and Kshs 23,000/= for the next three years on a monthly basis. This therefore means that the rent payable from March 2018 to February 2021 would be at the rate of Kshs 20,000/=. The rent payable for the period the Landlord claims therefore translates as follows;-January and February 2021 Kshs 40,000/=March to December 2021 Kshs (23,000 x 10) Kshs 230,000/=January to December 2022 (23,000 x 12) Kshs 276,000/=January to March 2023 (23,000 x 3) Kshs 69,000/=Total Kshs 615,000/=

14. Mr. Jotham Ariero, the caretaker of the suit premises admitted receiving Kshs 70,000/= from the Tenant. I will give the Tenant credit for the said amount and thereby deduct the same from the total in paragraph 13 hereinabove which gives total rent arrears of Kshs 545,000/=. And it is my finding therefore that the Tenant owes the Landlord rent arrears in the sum of Kshs 545,000/=.

15. The Tenant has clearly stated that he is the one who was running the petrol station on the leased property. It is also his evidence that only the land belonged to the Landlord and all other fixtures belonged to him and his suppliers. Under the said lease, clause 5 provides as follows;-“The Landlord shall install electricity plus water but the Tenant shall pay all license charges, water and electricity bill which become payable during the period of tenancy whereas the Landlord shall pay rent, rates and taxes in respect of the premises.”I have seen the electricity bill from Kenya Power and Lighting Company Limited printed on 7. 8.2023. It shows an unpaid balance of Kshs 93,433/=. The Tenant was duty bound under the provisions of Clause (5) above to pay the electricity bills. I am satisfied that the amount of Kshs 93,433/= was outstanding as at 7. 8.2023 and the Tenant ought to pay this amount.

Issue B: Whether the Tenant is entitled to be compensated for the building that he put up in the suit premises. 16. The Tenant has contended that under Clause 13 of the lease agreement, he is entitled to compensation for the permanent structures he erected on/at the suit premises. The said clause provides as follows;-“Three months prior to expiry of the lease, the leasee shall give notice of the intention to renew and/or extend the lease and if the lessor is agreeable to extension of the lease, he shall give his consent to the said renewal BUT in the event that the lessor declines to renew the lease, he shall offer to purchase all temporary structures erected by the leasee at a value to be agreed and if not agreed, a valuer appointed by the chairman of the institute of valuers shall value the said structures.”

17. The Tenant in his evidence admitted that he did not seek the renewal of his lease as per clause 13 of the lease agreement. The Landlord on his part has stated that he sent a rent demand to the Tenant and a reminder that his lease would not be renewed. It is therefore clear that the Landlord was not going to renew the Tenant’s lease anyway. I think what needs to be determined is whether the Tenant is entitled to be compensated for the building in the suit premises. The operative phrase in Clause 13 is that “The Landlord shall offer to purchase all temporary structures… at a value to be agreed on and if not agreed at a value to be determined by a valuer appointed…”My understanding of the intention of the parties here is that the Landlord was bound to purchase the temporary structures erected by the Tenant, otherwise, there would not have been any need of proposing an alternative valuation in the event of a disagreement as to the value of the temporary structures. So then, what amounts to a temporary structure? The building code 2024 defines a temporary building as,“A building that is so declared by the owner to be used for a specified purpose for a specific period of time as determined by the approving authority.”Under the same code, “Approving authority means the County Executive Committee member responsible for physical and land use planning.”

18. The Tenant admitted in evidence that he had no approved plans for the building he now seeks compensation for. I do not think that it would be fair to ask the Landlord to pay for a building which was not approved and whose fate can only be condemnation and demolition.

19. Even if I was wrong on the above, the Tenant’s claim for compensation would still not succeed for lack of the Landlord’s consent. The Tenant has admitted that he did not get the consent of the Landlord in writing to carry out the construction. Under Section 12(L), the Tribunal is empowered to order for compensation for improvements upon termination of tenancy where such improvements have been executed with the consent of the Landlord.The said Section provides as follows;-“To award compensation for any loss incurred by a Tenant on termination of a contracted tenancy in respect of goodwill and improvements carried out by the Tenant with the landlord’s consent.” (Underlining mine).

20. If the Tenant’s building had been approved by the relevant approving authority and if the Tenant had demonstrated that he had the Landlord’s consent to carry out the construction, then I would have had no difficulties in adopting the value given to the building by the valuer and offsetting the rent demand by the Landlord from it. Sadly, this is not the case.

Issue C: Whether the Landlord’s notice to terminate tenancy should therefore be allowed and on what conditions 21. It is also noteworthy that the Tenant did not file any Reference in opposing the Landlord’s notice to terminate tenancy as a consequence of which, the notice became effective on the date indicated therein (1. 6.2023).

Disposition 22. Following from the above findings, I hereby make the following orders in disposing of this matter;-a.That the Landlord’s notice to terminate tenancy is approved and the tenancy between the parties herein is terminated.b.That the Tenant will pay to the Landlord rent arrears amounting to Kshs 545,000/=.c.That the Tenant will pay the electricity bill of Kshs 93,000/= failing which the Landlord will pay the same to KPLC Ltd and recover from the Tenant.d.That the Tenant’s claim for compensation pursuant to the provisions of Clause 13 of the Lease agreement between the parties is hereby dismissed.e.That the Tenant will bear the costs of this suit.f.This file is ordered closed on those terms.

DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 14TH DAY OF MARCH, 2025HON. CYPRIAN MUGAMBICHAIRPERSONBUSINESS PREMISES RENT TRIBUNALIn the presence of Mr. Muchai the Tenant and Mr. Gai for the Landlord.