[2025] KEBPRT 239 (KLR)

Gitonga & 8 others v Secretary-General, Kenya African National Union & another (Tribunal Case E076 of 2024) [2025] KEBPRT 239 (KLR) (Civ) (25 April 2025) (Judgment)

Neutral citation: [2025] KEBPRT 239 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Civil

Tribunal Case E076 of 2024

P Kitur, Member

April 25, 2025

Between

Charles Wambugu Gitonga

1st Tenant

Timothy Bundi

2nd Tenant

Moffat Muya

3rd Tenant

Veronica Nyambura

4th Tenant

Joseph Muriuki

5th Tenant

Elizabeth Nyambura

6th Tenant

Kungu Maitu

7th Tenant

Stephen Kamau

8th Tenant

Godwin Gachagua Githui

9th Tenant

and

Secretary-General, Kenya African National Union

1st Respondent

Mulwa Commercial Agencies

2nd Respondent

Judgment

A. Parties 1. The Tenants are businesspersons operating their business while occupying the suit premises located at Plot Number L.R No. 2787/322 Nanyuki, Municipality (suit premises).

2. The 1st Tenant is represented by the firm of Wambui Mwai & Associates Advocates.

3. The 2nd to 9th Tenants are represented by the firm of Mwangi Kariuki & Company Advocates.

4. The firm of Odero & Partners Advocates represents the Landlord and the 2nd Respondent.

B. The Dispute Background 5. The dispute in this matter arose when the landlord issued notices to terminate the tenancies of the tenants on 27th May 2024. The notices cited several grounds for termination, including the need for vacant possession due to an impending change in ownership of the premises. The landlord further stated that the new owner intended to demolish and rebuild the premises to increase revenue, given its strategic location in the CBD, and to recover the financial investment made during the purchase. Additionally, the landlord directed tenants to remit rent payments to Mulwa Commercial Agencies until vacant possession was achieved. The notices dated 22nd May 2024 were issued pursuant to a judgment by the Tribunal in E101 of 2023, and were uniform across all tenants.

6. Aggrieved by the notices, the tenants filed references to this Tribunal, opposing the termination and requesting an investigation into the matter to determine the issues involved. Upon filing the references, the landlord made a formal application to consolidate the suits owing to their similarity. The application was unopposed, and the Tribunal allowed it, designating the lead suit as case number Nyeri E076 of 2024. Subsequently, tenant Moffat Muya filed an authority to represent seven other tenants and himself, dated 30th October 2024, while one tenant opted to represent himself.

7. During the proceedings, the 1st Tenant raised a preliminary objection challenging the Tribunal's jurisdiction to hear the matter. However, the court dismissed the objection, paving the way for the hearing of the main reference to proceed.Testimoniesa.The first witness, Mr. Charles Wambungu Gitonga, testified before the Tribunal. He adopted his witness statement as his evidence-in-chief and produced additional documents in support of his testimony.b.Upon cross-examination, Mr. Gitonga stated that he had been a tenant on the suit premises for a period of twelve (12) years. He initially paid rent in the amount of Kshs. 26,000/- which had since increased to Kshs. 37,000/-. He entered into a tenancy agreement with KANU Laikipia East on 3rd October 2009. He confirmed that the current landlord in this matter is the Secretary-General of KANU. He acknowledged receipt of a notice to terminate tenancy dated 2nd August 2024, which cited grounds for termination as previously set out in the proceedings.c.Mr. Gitonga stated that he challenged the notice on the basis that his lease term had not yet expired. He was aware that the notice was issued due to the intended sale of the property. While conceding that a landlord is entitled to deal with their property, he asserted that such dealings must involve the tenant, particularly where a tenancy agreement is in force. He recalled a previous legal dispute with the landlord.d.He testified that he had seen the sale agreement, which indicated a purchase price of Kshs. 120 million. The agreement also stipulated that completion of the sale was contingent upon the premises being vacant. Mr. Gitonga claimed that the landlord was acting contrary to the law by seeking to evict him while a valid lease agreement for a 20-year term remained in place. He confirmed that the names appearing in the lease agreement and the court documents referred to the same party. He further testified that both the Chairman and the Secretary-General of KANU had executed the sale agreement.e.Mr. Gitonga stated that while he had challenged the validity of certain documents in the past, he could not recall the specific grounds of those challenges. He was aware of a judgment delivered by Hon. Patricia May in a similar matter, in which the Tribunal directed the landlord to issue fresh notices—a directive which was followed. He conceded, therefore, that the issuance of the notice to terminate was not, in itself, unlawful.f.During re-examination, Mr. Gitonga reiterated that the landlord, as per the lease agreement and the present suit, was KANU, and that the Secretary-General of KANU was the party responding to the suit. He emphasized that the sale of the premises had not yet been completed. He maintained that the sale could not lawfully proceed without his involvement as a tenant.g.The second witness, Mr. Muffat Muya, also a tenant, testified on behalf of himself and the other tenants. He took the oath and adopted his witness statement along with supporting documents filed in court. He stated that he had authority to plead on behalf of the other tenants.h.Under cross-examination, Mr. Muya admitted that a notice to terminate tenancy had been issued and acknowledged receipt of the same. He identified the Secretary-General of KANU as the person who issued the notice. He referred to a written authority dated 30th October 2024, signed by the other tenants, which empowered him to testify on their behalf. He clarified that his testimony was to be considered as collective evidence on behalf of all affected tenants.i.Mr. Muya stated that their landlord was KANU Laikipia East, which, in his view, was distinct from KANU headquartered in Nairobi. He pointed out that the notice was issued by the latter. He referred to BPRT Case No. E100 of 2023, where they had sued the Secretary-General as the landlord. In that matter, judgment was entered in their favor, and the court granted liberty to the landlord to issue fresh notices.j.He acknowledged receipt of a four-month termination notice and read out ground 5 of the notice, which cited compliance with the judgment delivered on 12th June 2023. Mr. Muya denied having reviewed the sale agreement but confirmed that it was signed by the Secretary-General on behalf of the seller and Mr. Samuel Koinange on behalf of the purchaser.k.He testified that both the ownership of the property and the validity of the termination notices remained in dispute. He stated that the property referred to in his witness statement and that in the sale agreement were one and the same. He confirmed that he remained in occupation of the premises despite the notice and did not dispute the legitimacy of the sale agreement per se.l.Upon re-examination, Mr. Muya testified that the registered owner of LR No. 2787/322 was KANU Laikipia East Branch and that the grant had been issued to KANU Nanyuki Laikipia Branch. He reiterated that the notice was issued by the Secretary-General of KANU, who described himself as the landlord. He added that he received the notice approximately one month after its date of issuance.m.Mr. George Wainaina Njogu testified on behalf of the landlord. He identified himself as the Secretary-General of the KANU political party and took oath before giving his testimony.n.During cross-examination by counsel for the first tenant, Mr. Njogu admitted that he was not listed as a trustee under the grant for LR No. 2787/322. He nonetheless asserted that he had the authority to sell the property, stating that KANU had since transitioned from a society to a registered political party.o.He testified that the principal reason for the termination of the tenancies was the intended sale of the property, although he was uncertain as to whether this constituted a valid ground under the applicable tenancy law. He admitted that this was the same ground previously used in earlier termination attempts.p.Mr. Njogu did not present proof of payment of a deposit under the sale agreement. He acknowledged the existence of tenant improvements on the premises but maintained that he was unwilling to compensate the tenants for any improvements. He further admitted that no documents had been produced to demonstrate a completed transfer of ownership or a redevelopment plan, despite intentions stated in the notice to terminate.q.In re-examination, Mr. Njogu stated that the current legal proceedings had delayed the sale due to the lack of vacant possession. He confirmed that there was no other sale agreement apart from the one dated 12th June 2023. r.During further cross-examination by counsel representing the 2nd to 9th tenants, Mr. Njogu conceded that he could not provide documentary proof of his position as Secretary-General at the time of the hearing, nor had any such documents been filed in court. He asserted that he had minutes demonstrating that he acted with authority but was uncertain whether those minutes had been formally submitted as evidence.s.He stated that the suit property was registered under KANU but was unable to provide documents in proof of this. He denied that branches of political parties could independently own property, asserting that ownership remained with the main party structure. He also acknowledged that no architectural plans for redevelopment had been prepared or filed. He testified that applications for demolition and reconstruction had recently been made, although not yet submitted in court.t.Mr. Njogu confirmed that he had executed the Replying Affidavit, the Notices to Terminate Tenancies, and the Sale Agreement. He referred to BPRT Case No. E100 of 2023, where it had previously been claimed that the property had been sold. However, that sale was subsequently nullified. In the new agreement, the completion date had been extended due to the pendency of legal proceedings, and as such, the sale had not yet been concluded. He confirmed that Hon. Gideon Towett Moi was the Chairperson of the KANU party, though he was not a witness in the current proceedings.

8. The court then directed the parties to file their respective submissions to which the parties complies. The submissions by the landlord are dated 27th March 2025, for the 1st Tenant 24th March 2025 and for the 2nd-9th tenants are 13th March 2025.

9. The 2nd to 9th tenants contended that the primary issues for determination in this matter were as follows: (i) Whether the notices issued by the landlord/respondent complied with the provisions of Section 4(2) of the Act; and (ii) Whether the landlord/respondent had proven its case on a balance of probabilities.

10. The tenants further submitted that only the first and second grounds stated in the notice merited examination, dismissing the remaining grounds as inconsequential and irrelevant to the case. They disputed the validity of terminating the tenancies on the basis that ownership of the suit premises was changing hands, arguing that such a reason is not contemplated under Section 7(1) of the Act. According to the tenants, it is the incoming landlord, and not the outgoing landlord, who holds the discretion to decide whether to terminate a tenancy. They also contended that the uncertainty surrounding the completion of the ownership transfer rendered that ground untenable as a basis for terminating tenancy agreements.

11. Additionally, the tenants argued that the existing landlord could not purport to act on behalf of a prospective future landlord by terminating tenancies. They also submitted that the stated ground of demolishing the premises could only be validly raised by an existing landlord and not by a future one. Consequently, they maintained that the landlord had failed to substantiate its case on a balance of probabilities, as the grounds cited for termination were not supported by the Act. Moreover, the landlord had allegedly failed to provide any evidence of an intention to demolish or reconstruct the premises. The tenants therefore prayed for the respondent to be condemned to pay costs.

12. The 1st Tenant echoed the arguments of the other tenants, disputing the validity of the termination notice. They contended that no tenancy relationship existed between the current tenants and the prospective buyer to warrant the application of the Act. Further, the landlord lacked the authority to issue notice on behalf of a future landlord. It was argued that the transfer of ownership could occur without affecting the existing tenancies. Additionally, the landlord failed to provide evidence of ownership changes or any actions supporting the claim of intended demolition of the premises.

13. The landlord submitted that a landlord-tenant relationship exists between the parties concerning the premises in question. Citing Section 2 of the Landlord and Tenant (Shops, Hotels, and Catering Establishments) Act, the landlord argued that their evidence, including witness testimonies and prior tribunal rulings, clearly established this relationship. They further emphasized that the tribunal could only exercise jurisdiction where a controlled tenancy exists as defined by the Act.

14. On the validity of the termination notices, the landlord maintained that the notices dated 27th May 2024 complied with Section 4(2) of the Act. The notices were in the prescribed form, provided more than the requisite notice period of two months, and detailed the grounds for termination. The landlord relied on precedent to underscore that these procedural requirements were strictly adhered to, rendering the notices valid.

15. Addressing the grounds for termination, the landlord argued that while some cited grounds may not explicitly fall under Section 7 of the Act, reliance on alternative grounds was permissible. It was submitted that the impending transfer of ownership justified the need for vacant possession, aligning with the statutory intent. The landlord further contended that the tenants were aware of the ongoing ownership transfer process, as evidenced by the sale agreement and witness testimonies, and that this transition necessitated the termination of the tenancies.

16. Finally, the landlord prayed for costs, asserting that costs follow the event as provided under Section 27 of the Civil Procedure Act. They urged the tribunal to dismiss the tenants' references and find that the termination of the tenancies was valid, lawful, and in full compliance with the Act.

C. List Of Issues for Determination 17. From the foregoing, this tribunal opines that the main issues arising for determination are as follows:-I. Whether the notices issued by the landlord on 27th May 2024 complied with the provisions of Section 4(2) of Cap. 301. II. Whether the landlord established valid grounds under Section 7(1) of the Act to justify termination of the tenancies.III. Whether the landlord’s reliance on an intended transfer of ownership and redevelopment suffices as lawful justification for termination.

D. Analysis And Findings Validity of the Notice to Terminate Tenancy 18. Section 4(2) of the Landlord and Tenant (Shops, Hotels, and Catering Establishments) Act requires termination notices to be issued in the prescribed form, provide the requisite notice period, and specify valid grounds for termination. Compliance with these procedural requirements is fundamental to the validity of any termination notice. The case of Kasarani Investments Holdings Limited v Kenya Breweries Limited [2017] eKLR underscores the importance of strict adherence to statutory requirements, holding that any procedural defect invalidates the notice.

19. In this case, the landlord issued notices to terminate tenancies on 27th May 2024, specifying the grounds of transfer of ownership and intended redevelopment. These notices were served in the prescribed form and provided a notice period of four months, exceeding the statutory minimum of two months under Section 4(2). The landlord further indicated that the notices were issued pursuant to a Tribunal judgment dated 22nd May 2024, which had directed the issuance of fresh notices.

20. The tenants disputed the validity of the notices, arguing that certain grounds were irrelevant or not envisioned under Section 7(1) of the Act. However, the Tribunal finds that the notices complied with all procedural requirements. The prescribed form was adhered to, and the requisite statutory notice period was met. Furthermore, the landlord's reliance on the Tribunal's directive to issue fresh notices adds procedural credibility. The judgment in Kasarani Investments Holdings Limited v Kenya Breweries Limited (supra) reinforces the necessity of strict compliance with statutory provisions, which, in this case, has been satisfied.

21. The Tribunal finds that the termination notices dated 27th May 2024 were procedurally valid, having complied with the requirements of Section 4(2) of the Act. Procedural compliance being a prerequisite for substantive consideration, the Tribunal holds that the notices were validly issued.

Whether the Landlord Established Valid Grounds for Termination 22. Section 7(1) of the Act outlines the grounds upon which a landlord may terminate a tenancy, including Section 7(1)(f), which permits termination where there is an intention to demolish or reconstruct the premises. In the case of Auto Engineering ltd v M. Gonella & Co. Ltd (1978) eKLR, the superior court while considering termination of tenancy based on need to reconstruct a business premises had the following to state at page 7/11-“……………….in such circumstances, the court must be careful to see that Section 7(1) (f) is fully satisfied before it allows him to get possession. 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…..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 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 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 by putting in, say a new shop front. Hence, the necessity for the work being substantial”.

23. The landlord submitted that termination was necessitated by the sale of the property, which required vacant possession as a condition for completion, and by the intention to demolish and redevelop the premises to improve commercial viability. The notices clearly cited redevelopment as one of the grounds for termination. The landlord produced a sale agreement stipulating vacant possession as a precondition and testified that redevelopment plans were intended to enhance the use of the CBD-located property.

24. On the other hand, the tenants contended that the sale had not been completed and that no concrete evidence of redevelopment, such as architectural plans or municipal approvals, had been provided. They argued that the outgoing landlord could not act on behalf of a prospective buyer in issuing the notices.

25. The Tribunal notes that while the tenants raised valid concerns regarding the lack of formal redevelopment approvals, the landlord sufficiently demonstrated a genuine and firm intention to redevelop the premises. The sale agreement explicitly indicated redevelopment plans, and the landlord testified to the necessity of these actions to comply with the terms of the sale. The ruling in Auto Engineering Ltd v M. Gonella & Co. Ltd (supra) emphasizes that while documentary evidence strengthens the landlord's case, the absence of certain approvals does not automatically negate a clearly stated and credible redevelopment intent.

26. The Tribunal is persuaded that the intention to redevelop falls within the ambit of Section 7(1)(f) of the Act. The landlord established a valid ground for termination, supported by credible evidence and testimony. Accordingly, the Tribunal finds that the termination was justified under Section 7(1)(f).

Lawfulness of Termination in Light of Ownership Transfer 27. Section 2 of the Act defines a landlord as the person entitled to receive rent, whether directly or indirectly, thereby granting them authority to issue termination notices. This court agrees that a landlord retains the right to terminate tenancies under statutory provisions, even when an ownership transfer is pending.

28. The tenants argued that the outgoing landlord lacked the authority to terminate tenancies on behalf of a prospective buyer and that existing tenancies could remain in place despite the transfer of ownership. They further contended that the landlord’s reliance on the sale agreement as a basis for termination was insufficient without evidence of completed transfer or redevelopment.

29. The landlord, however, presented evidence showing that vacant possession was a contractual obligation under the sale agreement. The agreement explicitly required the termination of existing tenancies to facilitate the transfer of ownership and redevelopment plans. The Tribunal observes that the authority to issue termination notices rests with the party currently entitled to receive rent, as defined under Section 2 of the Act.

30. The Tribunal finds that the landlord acted within their statutory authority in issuing the termination notices. The reliance on the sale agreement and the intention to secure vacant possession were lawful and aligned with the provisions of the Act. The termination of the tenancies was therefore lawful in light of the impending ownership transfer.

31. Having analyzed the evidence and submissions, and applied the relevant law, this Tribunal finds that the notices to terminate dated 27th May 2024 were valid and complied with Section 4(2) of Cap. 301 and that the landlord established valid grounds for termination under Section 7 of the Act.

E. Orders 32. In light of the above, I proceed to make the following orders:-a.The Tenants’ respective consolidated References are dismissed.b.The tenancy between the parties herein is terminated pursuant to the notice of termination of tenancy dated on 27thMay 2024. c.The tenants shall vacate the suit premises on or before 15th May 2025 failure to which the landlord will be at liberty to forcefully evict the tenant using licensed auctioneers.d.Each party shall bear their own costs.e.OCS Nanyuki Police Station to ensure compliance and that peace prevails.f.File marked as closed.

HON P. KITURMEMBERBUSINESS PREMISES RENT TRIBUNALRuling dated, signed and delivered virtually by Hon P. Kitur this 25th day of April 2025 in the presence of Ms. Shamallah holding brief for Mr. Odero for the Landlord, Mr. Mwangi for the 2nd to 9th Tenants and Ms. Wambui for the 1st Tenant.