[2021] KEBPRT 327 (KLR)

REPUBLIC OF KENYA

IN THE BUSINESS PREMISES RENT TRIBUNAL

AT NAIROBI

TRIBUNAL CASE NO. 1137 OF 2019 (NAIROBI)

JACQUELINE LORRAINE AKELLO T/A

TRIPLE A ADVOCATES ............................................APPLICANT/TENANT

-VERSUS-

KENYA MEDICAL PROPERTIES

LIMITED (LANDLORD).......................LANDLORD/ 1ST RESPONDENT

GIMCO LIMITED........... (PROPERTY MANAGER/ 2ND RESPONDENT

MARGARET MUNYUA..................................................3RD RESPONDENT

JUDGMENT

Parties and Their Representative

1. The TenantTriple A Advocates(hereinafter referred to as the “Tenant”) entered into a Tenancy Agreement dated 1st May 2017 over KMA Apartments, Upperhill, Nairobi Property L.R. NO. 209/19051 Block D Apartment No. 5. 1.

2. The Firm of SOKLaw (Simiyu Opondo and Kiranga) Advocates the Tenant.

(Email Address: info@soklaw.co.ke)

3. The Respondents Kenya Medical Properties Limited (Landlord), GIMCO Limited (Property Manager), Margaret Munyua of the suit premises rented out to the Tenant.

4. The Firm of A.M. Mbindyo & Co. Advocates represent the Landlord.

(Email Address: ammbindyo@gmail.com)

The Background of the Dispute

5. The dispute arises from a Tenancy Agreement entered into on 1st May 2017 over KMA Apartments, Upper hill, Nairobi Property L.R. NO. 209/19051 Block D Apartment No. 5. 1.

6. The Tenant filed a Reference and an Application dated 8th November 2019 under Certificate of Urgency seeking the following orders;

I. That the Application be certified urgent and service of the same be dispensed with in the first instance.

II. That pending inter-parte hearing and determination of the Application, the electricity be reconnected by the Landlord and the Landlord/Respondents by themselves, their officers, servants, agents or otherwise howsoever be restrained from harassing, evicting, levying distress, intimidating, closing the suit premises or threatening to evict the Tenant and/or in any other manner whatsoever interfering with the Tenant’s quiet possession and lawful enjoyment of the suit premises.

III. That pending hearing and determination of the Application, the Landlord/Respondents by themselves, their officers, servants, agents or otherwise howsoever be restrained from harassing, evicting, levying distress, intimidating, closing the suit premises or threatening to evict the Tenant and/or in any other manner whatsoever interfering with the Tenant’s quiet possession and lawful enjoyment of the suit premises.

IV. That pending hearing and determination of the Reference, the Landlord/Respondents by themselves, their officers, servants, agents or otherwise howsoever be restrained from harassing, evicting, levying distress, intimidating, closing the suit premises or threatening to evict the Tenant and/or in any other manner whatsoever interfering with the Tenant’s quiet possession and lawful enjoyment of the suit premises.

V. This Honourable Tribunal be pleased to issue any other or further orders as it may deem fit and necessary to grant in the interests of justice and fairness.

VI. Costs of the Application be provided for.

Summary of Proceedings

7. On 8th November 2019, the Tribunal issued an Order allowing prayer I, II and III of the Tenant’s Application dated 8th November 2019 and ordered that the OCS Capitol Hill Police Station to enforce compliance.

8. Parties attempted negotiations but failed thus the matter was set down for hearing of the application dated 8th November 2019 together with the reference of even date by way of written submissions.

9. The Landlord filed its submissions and the Tenant allowed to reply in 14 days.

10. On 19th August 2021 both Parties confirmed that they had filed and served their submissions. And it was set down for Judgement.

Jurisdiction

11. The Jurisdiction of this tribunal is not in dispute.

Issue for Determination

I. Whether the Termination Notice was Valid?

II. Are there any arrears and Electricity bills?

III. License vs Tenancy Agreement?

Tenant’s Submissions

12. The Tenant submitted on two issues; whether the Notices on record issued by the Respondents are illegal and that on the issue on License to Let vis-a-viz Tenancy Agreement. On the first issue, the Tenant submitted that the Landlord’s notice did not meet the statutory threshold and therefore the notice was invalid.

13. On the second issue, the Tenant submitted that the parties were operating on a Tenancy Agreement until when the Landlord introduced a document called a Licence to Let that the Tenant declined to execute and the threats and harassment began. The Tenant contended that a shift from a controlled Tenancy to Licence introduces unpredictability which is extremely dangerous for the operation and conduct of a law firm.

14. On Arrears and bills it was submitted that the same have been cleared and electricity bills paid as and when landlord availed the same and the said issue stands resolved.

Landlords/Respondents’ Submissions

15. The Landlord filed a Replying Affidavit sworn by Margaret Munyua dated 10th February 2020 and submissions dated 27th May 2021. The Landlord cited Clause 4 of the Tenancy Agreement which gave the Landlord the right to terminate the Tenancy Agreement. The Landlord offered to enter into a license agreement with the Tenant but the Tenant vide letter dated 22nd July 2019, expressed her intention not to take up the offer and instead expressed her interest to purchase the premises. In response, the Landlord forwarded an offer letter for the Tenant to purchase the premises which letter the Tenant has not executed.

16. The landlord submitted that they proceeded to issue a termination notice under Clause 4 of the Tenancy Agreement. It was further submitted that the Tenant accepted the Termination Notice vide letter dated 3rd October 2019 and even called for a joint inspection of the premises. The Landlord submitted that the Tenant did not oppose the Notice and that the Tenant filed the Reference after the Notice took effect on 1st November 2019 in accordance with section 1 and 6 of the Landlord and Tenant (shops, Hotels and catering establishment) Act. Consequently, it was submitted that the Tenant could not raise issues on legality of the Notice after it had previously accepted the said Notice.

17. The Landlord submitted that the Tenant was in arrears of rent in breach of her obligation as a Tenant in the Tenancy Agreement. the landlord further submitted that the Tenant had an obligation to pay the electricity bills consumed in the premises that she occupies, to pay rent and service charge and cannot hide under the guise of being harassed to circumvent the Landlord’s right to enforce the Tenancy Agreement in recovery of rent. As such the Landlord concluded that the Reference file by the Tenant is incompetent and therefore the Application and Reference be dismissed with costs.

Analysis and Determination

18. I have carefully considered the documents submissions of the parties together with all the documents filed in this Tribunal for consideration and come to the following analysis and determination on the issues in dispute.

Whether the Termination Notice was Valid

19. The main issue for determination in this case is whether the Termination Notice issued by the Landlord was valid or not. I am guided by Clause 4(ii) and (iv) and section 4(2) of the of the Landlord and Tenant (shops, Hotels and Catering Establishment) Act.

It is not in dispute that the Landlord issued a notice to vacatedated 1st October 2019whose contents read in part as follows:

“We wish to notify you that the Landlord (KMPL) intention to transfer the ownership of the above referred apartment, we hereby give you one (1) months’ Notice to vacate the above referenced premises. The landlord wishes to repossess the premises for other purposes”

20. Clause 4(ii)allows the Landlord to terminate the tenancy agreement at any time during the lease period when the Tenant is in arrears whether legally demanded or not or if the Tenant shall omit to perform or to observe any of the Covenants in the Tenancy Agreement. However, the same Clause requires the Landlord to give the Tenant a seven days’ notice of the breach and proposed redress which if not complied with by the Tenant within seven days, then the Landlord may take without further notice to the Tenant whatever action he thinks fit to recover the arrears of rent and /or obtain the redress required. Further sub clause (iv) requires that either party shall give a one-month notice in writing or one month’s rent in lieu to terminate the Tenancy Agreement.

21. It is my finding that the Landlord contravened Clause 4 of the Tenancy Agreement. There was no7 days’ notice of breach and proposed redress before the issuance of a termination Notice. It is trite law that parties are bound by their own Agreement and therefore failure by the Landlord to comply with the Tenancy Agreement renders the termination notice invalid.

22. In addition, this must be read together with Cap 301 so in addition to a notice of breach the provisions of the law must be followed. This position of the law on the issue of a termination notice is now settled as can be seen in the cases which are cited below. In the case of Manaver N. Alibhai t/a Diani Boutique vs. South Coast Fitness & Sports Centre Limited, Civil Appeal No. 203 of 1994, the court 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.”

23. In Lall vs. Jeypee Investments Ltd Nairobi HCCA No. 120 of 1971 (1972) EA 512 the court stated as follows:-

“The Landlord and Tenant (Shops, Hotels and Catering Establishments) Act is an especially enacted piece of legislation which creates a privileged class of tenants for the purpose of affording them the protection specified by its provisions against ravages of predatory landlords. Such protection can only be fully enjoyed if the provisions of Act are observed to the letter otherwise the clearly indicated intention of the legislature would be defeated. In order to be effective in this fashion the Act must be construed strictly no matter how harsh the result... The Landlord and Tenant Act laid down a code which Parliament intended to be followed and if a landlord does not give notice of termination as prescribed, the notice will be ineffectual. This may seem a technical and unmeritorious defence, but there is no doubt that the court has no power to dispense with these time limits if the defendant chooses to object at the proper time. This is an Act which requires, insofar as the giving of the notice is concerned, absolute and complete not merely substantive compliance with its peremptory provisions.”

24. Section 4 of theof the of the Landlord and Tenant (shops, Hotels and Catering Establishment) Act is the Principal Act governing termination notices in Landlord-Tenant relationship. As seen in the above cases, Section 4(2) requires that the Termination Notice shall be in the prescribed form. In this case, The Notice to vacate dated 1st October 2019 issued by the Landlord does not meet the statutory requirement since it is not in the prescribed. Section 4(4) further provides that “No tenancy notice shall take effect until such date, not being less than two months after the receipt thereof by the receiving party…” For a notice seeking termination or variation of a controlled tenancy to be effective, section 4(4) of the Act requires the same to be not less than two months unless parties agree in writing to a lesser notice period after the notice is issued. The notice shall not take effect earlier than 2 months from the date of receipt thereof by the tenant. In addition to the above finding, the Notice by the Landlord failed to meet the threshold set under Section 4(4)since the notice dated 1st October 2019 gave a one-month notice instead of the statutory minimum period of two months.

25. On the issue of electricity bills and arrears parties do not seem to be clear on the same whilst the tenant says no arrears exist the landlord contends there are arrears and neither party has produced any evidence of receipts or statement of accounts evidencing the same in the absence of the same I am unable to pronounce myself on the issue.

26. Finally, on the issue of Tenancy Vs License. A license to my knowledge is official permission to do something and is therefore granted over and above a lease or a tenancy agreement say to use a parking space, or a veranda in a common area and in most cases can hardly stand alone I am persuaded that a Tenancy agreement ought to be the right document to be signed by parties under Cap 301 if they so wish and where it is not in existence the act allows this tribunal to govern oral tenancy agreements.

27. In view of the above findings, I hereby make the following orders and directions:

i. The Tenants Reference dated 8th November 2019 is hereby allowed in the following terms.

ii. The Landlord is hereby ordered to reconnect the electricity. the Landlord/Respondents either by themselves, their officers, servants, agents or otherwise howsoever be restrained from harassing, evicting, levying distress, intimidating, closing the suit premises or threatening to evict the Tenant and/or in any other manner whatsoever interfering with the Tenant’s quiet possession and lawful enjoyment of the suit premises;

iii. The Landlord by themselves, their officers, servants, agents or otherwise howsoever be restrained from harassing, evicting, levying distress, intimidating, closing the suit premises or threatening to evict the Tenant and/or in any other manner whatsoever interfering with the Tenant’s quiet possession and lawful enjoyment of the suit premises;

iv. The Tenant to pay rent as agreed in the last valid Tenancy Agreement on or before the 10th Day of each month or earlier and to give proposals on how to clear any arrears or pending electricity bills in the next 30 days’ failure to which the landlord will be at liberty to apply.

v. OCS Capitol Hill Police Statin to enforce compliance;

vi. Each party shall bear its costs.

HON. A. MUMA

VICE CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL

Judgementdated, signed and delivered virtually by Hon A. Muma this 8th day of September 2021 in the presence of Mbindyo for the Landlords and Kiranga for the Tenant.

HON. A. MUMA

VICE CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL