[2024] KEBPRT 68 (KLR)

Geca Supplies Ltd v Mukta Shah of the Estate of the Late Shantabai (Tribunal Case E865 of 2022) [2024] KEBPRT 68 (KLR) (19 January 2024) (Ruling)

Neutral citation: [2024] KEBPRT 68 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E865 of 2022

Andrew Muma, Ag. Chair & J Rop, Member

January 19, 2024

Between

Geca Supplies Ltd

Tenant

and

Mukta Shah of the Estate of the Late Shantabai

Landlord

Ruling

A. Parties and their Representatives 1. The applicant, Geca Supplies Ltd, is the tenant of the suit premises in this matter, who occupies the rented space known erected at LR 209/136/106, Kilome Road. (hereinafter known as the ‘suit premises’)

2. The firm of Njeru Nyaga and Company Advocates represents the Applicant/Tenant in this matter.

3. The Respondent is the Landlord of the suit premises L.R. No LR 209/136/106, rented out to the tenant for business purposes.

4. The firm of B. Kimathi Advocates represents the Landlord.

B. The Dispute Background 5. On 5th October, 2022 the Applicant filed a Notice of Motion application under a Certificate of Urgency on the grounds that the Landlord intended to unlawfully evict it from the suit premises. In addition, the tenant claimed that the Landlord sought to unjustifiably increase the rent payable without any justification.

6. This Honourable Tribunal vide a ruling delivered on 13th April 2023 directed the parties herein to file a valuation of rent report for current rent assessment. The Tenant sought the services of Ace Appraisals Limited who filed a valuation report dated 29th June 2023 while the Landlord procured the services of Kenval Realtors who filed a valuation report dated 19th June,2023.

7. The parties’ valuers were later directed to conduct a joint assessment on the size of the premises and file the same. The Landlord filed the report dated 19th June 2023 and the tenant indicated that they would be relying on the same valuation report.

8. It is on the foregoing that I write this Ruling.

C. Tenant’s Case 9. The tenant disputed the premises used by the Landlord for comparison purposes stating that the suit property should not be compared with ultra-modern buildings with the state of the art facilities situated at the Central Business District owing to the fact that the suit premises is located in down town and was erected years ago.

10. The Tenant further deponed that the average monthly rent for shops located on the ground floor should be Kshs. 135 per square foot for shops that don’t front Kilome Road and Kshs. 150 per square foot for shops fronting Kilome road.

D. Landlord’s Case 11. The Landlord contends that the Tenant did not only seek to mislead the Tribunal as to the space it holds but they also instructed their valuer not to include the other spaces in the report. It is the Landlord’s case that the Tenant only filed the assessment report on Geca Bookshop despite the fact that he occupied four which are inside the building.

12. The Landlord avers that the shops are in high and competitive demand, in good proximity to public transport and fronts Kilome which connects to several major roads in the CBD including Tom Mboya, Kirinyaga and Accra Road.

E. Issues for Determination 13. It is the contention of this Tribunal that the only issue that falls for determination is whether the Landlord is entitled to rent increment.

F. Analysis and Determination 14. Section 12(1)(b) of the Landlord and Tenant (Shops, Hotels and Catering Establishments provides that;“A Tribunal shall, in relation to its area of jurisdiction have power to do all things which it is required or empowered to do by or under the provisions of this Act, and in addition to and without prejudice to the generality of the foregoing shall have power-(b)to determine or vary the rent to be payable in respect of any controlled tenancy, having regard to all the circumstances thereof,”

15. In the matter before me, both the tenant and the landlord filed their rent valuation reports in support of their different disposition and clearly indicating the rent comparable.

16. The Tribunal is presented with two valuation reports which are wide apart in their recommendations. Both reports have been prepared by valuers qualified and experts in their fields. The comparables used by the Tenants are located at Kirinyaga Road, premises in back roads /alleyways while the comparables used by the Landlord’s valuers are stated to be in uptown area of the Central Business District, fronting and connecting to Kilome Road, downtown shops and small shops. The comparable used by both parties therefore seem to be in or around the same location with the suit premises. In Cleaners Limited Vs Barclays Bank & Co [1972] EA 188, the Court of Appeal held that;“The average rates per square foot or meter of a number of nearby buildings on ground floor premises in which similar trades are exercised are among other things relevant to assessing the rent that would reasonably be expected in the open market”

17. I note that the Tenant only instructed the valuers to conduct valuation of the Geca Office Supplies Shop measuring 279 Square feet and the Wines and Spirits shop within Geca Office Supplies measuring 55 square feet and shop A measuring 132 square feet in the premises and omitted shop B. This was not disputed by the valuer during the hearing.

18. It is in the mind of this Tribunal that the tenant has been and continues to occupy the suit premises occupying two shops at the front and two inside the building.

19. The comparables used by the valuer for the Landlord, Kenval Realtors range between Ksh. 166 to Ksh.350 per square metres the average being Kshs. 285 whereas those used by Ace Kshs. 110 to Kshs.180. I have noted the average rent presented by the valuers and noted the comparisons used by the valuers who presented their evidence in person and I find that out of all the closest comparison is Kshs. 166 per square foot.

20. Having carefully analyzed the reports filed by both parties, it is the finding of this Tribunal that the proposals by the Tenant is proper and presents more reasonable rent estimates. Indeed, the comparable made by the Landlord are on known streets different from the location of the suit premises hence not relevant in this case. However, I will depart from taking the Tenants average because the variables are bit similar as well and settle on one variable.

G. Orders 21. I make the following final Orders: -a.The Tenant’s Application dated 5th October 2022 is hereby allowed.b.The Tenant shall pay a monthly rent at the rate of Ksh. 166 per square foot for the entire suit premises, that is all the shops occupied by the Tenant effective 1st February 2024. c.Each party shall bear their own costs.

HON A. MUMA - AG CHAIR/MEMBERHON JACKSON ROP - MEMBERBUSINESS PREMISES RENT TRIBUNALRuling dated, signed and delivered at Nairobi this 19th day January of 2024 in the presence of Kirui for the Tenant. No appearance for the Landlord.HON A. MUMA - AG CHAIR/MEMBERHON JACKSON ROP - MEMBERBUSINESS PREMISES RENT TRIBUNAL