[2024] KEBPRT 177 (KLR)

Eldoret Bearing & Springs Limited v Kamau c/o Alpine Wood and Steel Limited (Tribunal Case E019 of 2023) [2024] KEBPRT 177 (KLR) (5 February 2024) (Ruling)

Neutral citation: [2024] KEBPRT 177 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E019 of 2023

P May, Member

February 5, 2024

Between

Eldoret Bearing & Springs Limited

Tenant

and

Julian Kamau c/o Alpine Wood and Steel limited

Landlord

Ruling

1. The tenant commenced the present proceedings by filing the reference dated 25th January, 2023 challenging the notice of termination of tenancy issued by the landlord dated 11th January, 2023. The grounds for terminating the tenancy as per the notice were that the landlord wished to renovate the premises and that the tenant had defaulted in paying rent as when it fell due.

2. The landlord upon being served with the reference duly entered appearance and filed their respective response in opposition to the said reference. The landlord has reiterated that the notice issued was regular and lawful as it meets the requirements set under Cap 301.

3. The parties filed their statements and documents that they wished to rely upon. The parties elected to rely on the documents on record as evidence and filed submissions in support of their respective positions. I have considered the reference, the statements and bundle of documents filed by each party and their submissions on record and wish to proceed as follows:

4. The present dispute as discerned correctly by the parties in their submissions emanates from the notice of termination dated 11th January, 2023. The parties are in agreement that there exists a landlord and tenant relationship which has subsisted since 1994; exactly 3 decades since the relationship was established.

5. It is the tenant’s testimony that they have always paid rent and complied with other contractual obligations as when it fell due. The landlord has on the other hand accused the tenant of failing to pay rent as and when it fell due and that he had accumulated rent arrears of Kshs. 131,000 at the time the notice was issued.

6. The sole issue for determination in the present dispute is the validity of the notice issued. The parties do not dispute to the jurisdiction of the Tribunal.

7. Section 4 of the Landlord and Tenants (shops, hotels and catering establishments) Act, Cap 301 provides that a Landlord who wishes to terminate a controlled tenancy shall give notice in the prescribed form and specifies the grounds upon which the Landlord terminates the tenancy.4. Termination of, and alteration of terms and conditions in, controlled tenancy(2)A Landlord who wishes to terminate a controlled tenancy, or to alter, to the detriment of the tenant, any term or condition in, or right or service enjoyed by the tenant under, such a tenancy, shall give notice in that behalf to the tenant in the prescribed form.(5)5) A tenancy notice shall not be effective for any of the purposes of this Act unless it specifies the grounds upon which the requesting party seeks the termination, alteration or reassessment concerned and requires the receiving party to notify the requesting party in writing, within one month after the date of receipt of the notice, whether or not he agrees to comply with the notice.

8. The position of the law on the issue of a termination notice is now settled. The Court in Manaver N. Alibhai T/A Diani Boutique vs. South Coast Fitness & Sports Centre Limited, Civil Appeal No. 203 of 1994, stated that: -“The Act lays down clearly and in detail, the procedure for the termination of a controlled tenancy. Section 4(1) of the Act states in very clear language that a controlled tenancy shall not terminate or be terminated, and no term or condition in, or right or service enjoyed by the tenant of, any such tenancy shall be altered, otherwise than in accordance with specified provisions of the Act. These provisions include the giving of a notice in the prescribed form. The notice shall not take effect earlier than 2 months from the date of receipt thereof by the tenant. The notice must also specify the ground upon which termination is sought. The prescribed notice in Form A also requires the landlord to ask the tenant to notify him in writing whether or not the tenant agrees to comply with the notice.”

9. It is evident that the notice of termination of the tenancy herein was in Form A as prescribed by the Act. further, the notice of termination of the tenancy was to take effect on 1st April 2023, being a period exceeding two months as required by the Act.

10. Having established that the notice of termination of the tenancy was in the prescribed form, I shall proceed to analyze the substance of the notice with regard to the grounds of termination of the tenancy as follows:

11. The grounds upon which the Landlord seeks to terminate the tenancy is expressed in the notice as follows;

To renovate the premisesIn rent arrears of Kshs. 131,000 as at 31/12/2022 12. On the first ground, it is prudent to point out that Article 40 of the Constitution of Kenya 2010 guarantees the right of every person either individually or in association with others, to acquire and own property. This includes the right of a proprietor of land to enjoy and benefit from the use of such property and to deal with the property as they please within the confines of the Law.

13. Accordingly, Section 7 of the Act clearly stipulates the grounds upon which a Landlord may seek to terminate tenancy. One of the grounds as enshrined in Section 7 (f) of the Act is: -7(f) that on the termination of the tenancy the Landlord intends to demolish or reconstruct the premises comprised in the tenancy, or a substantial part thereof, or to carry out substantial work of construction on such premises or part thereof, and that he could not reasonably do so without obtaining possession of such premises.

14. The above provision affirms the right of the Landlord to undertake renovations and/or repairs to their property. According to the termination notice served upon the Tenant, the Landlord sought to terminate the tenancy on the ground that they wished to undertake renovations.

15. In expounding on the threshold that should be met by a Landlord placing reliance on Section 7(1)(f) of the Act as a ground for termination of tenancy, the High Court in the case of Auto Engineering Ltd Versus M. Gonella & Co. Ltd (1978) eKLR stated as follows: -“…First, it is correct that the wording of section 7(1)(f) is “demolish or reconstruct”, and not merely to effect repairs. The distinction can of course be important; for while mere repairs may not necessarily mean that the landlord needs possession of the premises, an intended demolition or reconstruction of a substantial part of the premises would in all probability be frustrated if the landlord could not obtain possession, and that is why this provision exists.”

16. . The Court went ahead to state as follows:“For this purpose the Court must be satisfied that the intention to reconstruct is genuine and not colourable: that it is a firm and settled intention, not likely to be changed: that the reconstruction is of a substantial part of the premises, indeed so substantial that it cannot be thought to be a device to get possession; that the work is so extensive that it is necessary to get possession of the holding in order to do it; and that it is intended to do the work at once and not after a time. Unless the Court were to insist strictly on these requirements, tenants might be deprived of the protection which Parliament intended them to have. It must be remembered that, if the landlord, having got possession, honestly changes his mind and does not do any work of reconstruction, the tenant has no remedy. Hence the necessity for a firm and settled intention. It must also be remembered that the Act is intended for the protection of shopkeepers, and that this protection would be nullified if a big concern could buy the property and get possession by putting in, say a new shop-front. Hence the necessity for the work being substantial.”

17. It is trite law that he who alleges must prove. I have perused through the documents filed by the landlord and I have not gotten even a single document that proves that the premises required to be repaired and that the renovation could only be undertaken after the tenant had vacated the premises.

18. Having settled the first ground, I will now consider the other ground on default in rent payment. The tenant admitted to being in rent arrears and in their objection to the notice of termination they proposed to settle the rent arrears due. The landlord has acknowledged that the tenant had paid a substantial amount of the rent due and the arrears had reduced to Kshs. 18,000. I believe the intention of giving the notice period to terminate any tenancy is equally to allow the defaulting party to rectify the default. I am therefore convinced that allowing the notice is not tenable at this stage. I am equally alive to the fact that the parties shall have an opportunity to renegotiate and even terminate the tenancy at the end of the year as the term lapses. I believe that would be the appropriate period for them to address some of the issues raised in the notice.

Orders 19. For the reasons given above, I order as follows;a)The Landlord shall prepare a statement of accounts for arrears owed within 7 days and issue the same to the Tenant.b)The Tenant shall have 21 days within which to defray the arrears upon receipt of the statement. In default the landlord shall be at liberty to levy distress.c)The notice of termination dated 11th January, 2023 is quashed.d)The reference partly succeeds as per the terms set in a-c above with no orders as to costs.

RULING DATED, SIGNED AND DELIVERED VIRTUALLY THIS 5TH DAY OF FEBRUARY, 2024. HON. PATRICIA MAYMEMBER02. 2024Delivered in the presence of Muthoni for the Respondent/LandlordNo appearance for the Tenant/Applicant