[2022] KEBPRT 698 (KLR)

Mande v Mbiriri (Tribunal Case E064 of 2021) [2022] KEBPRT 698 (KLR) (Civ) (19 August 2022) (Ruling)

Neutral citation: [2022] KEBPRT 698 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Civil

Tribunal Case E064 of 2021

Gakuhi Chege, Vice Chair

August 19, 2022

Between

Robert Mande

Applicant

and

Peter G Mbiriri

Respondent

Ruling

1. Through a tenancy notice dated October 15, 2021, the landlord sought to terminate the tenant’s tenancy in respect of the business premises known as Makongeni ‘B’ Hotel in Busia Town with effect from January 1, 2022 on the grounds of Kshs.240,000/-. He also cited the ground that he wishes to use the business premises for own purpose.

2. Being opposed to the notice, the tenant filed a reference dated October 28, 2021. The reference was directed to be canvassed by way of written submissions after both parties complied with Order 11 of the Civil Procedure Rules, 2010.

3. The tenant filed his witness statement dated February 23, 2022 together with his list of documents of even date. The landlord also filed his witness statement and documents dated March 15, 2022.

4. Both parties also filed their written submissions which are dated May 27, 2022. I shall consider the submissions together with the following issues for determination:-a.Whether the landlord’s notice to terminate tenancy ought to be upheld or dismissed.b.Who is liable to pay costs of the reference?.

5. The Landlord avers in his witness statement that the tenant entered into unwritten tenancy agreement in April 2011 for a monthly rent of Kshs 15,000/-. The tenant refused to execute formal lease on January 14, 2012 marked exhibit 1 in his list of documents. Although the portion leased to the tenant comprised of a business room, kitchen and washing area, he added a Coca- Cola shed outside the premises which he roofed and used glass windows without the landlord’s permission.

6. A separate toilet was provided to the tenant and he has to pay for water and electricity for his hotel business.

7. On October 1, 2018, the landlord gave the tenant notice to terminate his tenancy to enable repairs which was to take effect on January 1, 2019 but the tenant opposed. The notice is marked exhibit 3.

8. The said notice became subject of tribunal case No 153/2013 (Kakamega) as per exhibit 3. The landlord was advised by the tribunal to issue a new lease to the tenant but upon doing so, the latter refused to sign.

9. From April 2020 up to November 2021, the tenant failed to pay rent to the landlord. As a result, the landlord issued a demand letter through his advocate for the rent arrears amounting to Kshs 120,000/- as at April 2021 vide exhibit 4.

10. As at the time of being issued with notice to terminate tenancy, the tenant was in rent arrears of Kshs 240,000/-. The said arrears were only paid pursuant to the Tribunal orders of December 16, 2021. He paid Kshs 100,000/- on December 15, 2021, Kshs 100,000/- on December 21, 2021 and Kshs 80,000/- on December 31, 2021 which cleared the arrears.

11. It is the landlord’s case that he intends to use the premises for personal business as he had grown up children who wants to put a business as they are jobless.

12. On the other hand, the tenant in his statement confirms that he entered into unwritten tenancy agreement with the landlord in April 2011 for a monthly rent of Kshs 15,000/- inclusive of water service charge.

13. The tenant states that his hotel is built on a road reserve and that he uses the landlord’s premises as a kitchen and washing area. He attaches a photograph marked exhibit ‘RM-1’.

14. The tenant avers that he always pays rent whenever it falls due despite the fact that the landlord never issues rent payment receipts. The tenant claims that he was denied water and use of toilets by the landlord despite the same being part of what he pays towards rent.

15. On June 11, 2020, the landlord served the tenant with a lease agreement for two (2) years with new rent being Kshs 25,000/- marked ‘RM-2’. According to the tenant, this did not amount to notice of alteration of terms of tenancy. The said notice was accompanied by threats of eviction and the landlord refused to accept Kshs 20,000/- as rent creating huge arrears which had since been cleared as per Mpesa statement marked ‘RM-3’. He denies having defaulted in rent payment. Instead, the tenant maintains that the landlord only accepted rent after the tribunal orders of December 11, 2021.

16. It is the tenant’s case that the landlord refused to issue rent receipts. The tenant states that he had conducted business in the suit premises for 12 years and established goodwill and shall be prejudiced if evicted therefrom.

17. Finally, the tenant states that the landlord has rented out the rest of his business premises and has never conducted hotel business similar to his since the beginning of the tenancy.

18. It is submitted on behalf of the tenant that the tenant had cleared the sum of Kshs 240,000/- rent arrears indicated on the tenancy notice pursuant to this tribunal’s order. It is submitted that the landlord refused to accept rent after increasing it to Kshs 25,000/- pursuant to the draft lease dated June 14, 2020. The said increment did not follow the proper procedure.

19. It is also submitted that the landlord failed to provide a copy of rent book or to keep one under section 3(5) of cap 301, Laws of Kenya. He further submits that the Landlord failed to provide a copy of rent book or to keep one under section 3(5) of cap 301 Laws of Kenya. He further submits that the landlord has not indicated for how long after termination of the tenancy he intends to carry out business in the suit premises. He has indicated that he intends to give the premises to his children to set up business which is against the provisions of the Act which only allow the ground on the basis of landlord’s own use and not third parties use. No business plans and account of funds for the intended business had been produced.

20. On the other hand, the landlord’s counsel submits that the tenant refused to pay rent from April 2020 until November 2021 until November 2021 despite a demand letter dated April 19, 2021 giving 14 days to pay a sum of Kshs 120,000/- which had accumulated by then. The tenant pays rent via Mpesa and there is no evidence of reversed payment to prove the alleged refusal by the landlord to accept rent.

21. It was only after the tribunal’s order of December 1, 2021 that the tenant cleared the rent arrears of over one (1) year. Even then, the said arrears was not paid in full as per the order by December 16, 2021. As such, it is submitted that the ground of termination on account of non – payment of rent under section 7(1) (g) of cap 301, Laws of Kenya is valid and lawful.

22. It is also submitted that the second ground of termination was proved and that there is no requirement that the tenancy notice uses the same language of the statute. It was sufficient that the landlord stated that he intended to set up his own business with children. The case of Fatma Ahmed AlMandley v Rahma Omar (2021) eKLR was cited in support of the submission.

23. I have considered the evidence tendered by both parties and their respective counsel’s submissions and note that it is not in dispute that by the time the tenant was issued with the impugned tenancy notice, the tenant was admittedly in arrears of Kshs 240,000/- which amounts to rent for a period of one (1) year.

24. The landlord issued a demand letter on April 19, 2021 giving the tenant 14 days to pay Kshs 120,000/- as at that date in rent arrears. There was no compliance nor a response to the said demand letter. It took this tribunal’s order of December 1, 2021 for the tenant to make the rent payment and even then, the same was not paid in full but in instalments.

25. According to the tenant, the rent arrears were occasioned by the landlord’s intention to increase monthly rent to Kshs 25,000/- through a draft lease marked ‘RM2’ annexed to the tenant’s list of documents. I have looked at the said draft lease and it indicates at clause 1(b) that the rent payable shall be Kshs 25,000/-. The same was however not executed neither is it complete.

26. There is no evidence of any correspondence exchanged between the parties on the issue. It is said to have been given to the tenant on June 1, 2020 to execute. By this time, the tenant had not paid rent for the months of April and May 2020. No complaint was filed before this tribunal over the alleged refusal to accept rent neither has the tenant exhibited any evidence of payment via Mpesa that was refunded by the landlord.

27. I have noted that the tenant’s application dated November 15, 2021 did not in any way address the alleged refusal to accept rent neither does the complaint dated November 15, 2021. I do not believe the tenant when he alleges that the purported rent increment occasioned his failure to pay rent.

28. In view of all the foregoing analysis, I am not convinced that the tenant’s failure to pay rent was occasioned by the landlord and find that the ground of non- payment of rent for over two months as stipulated under section 7(1) (g) has been established.

29. In regard to the landlord’s intended use of the premises, I note that no evidence to back this ground was tendered. The nature of business, availability of funds or even the business plan is lacking. The names of the landlord’s children with whom he intends to run the business are not disclosed and as such this ground fails.

30. As regards costs, the same are in this tribunal’s discretion under section 12(1) (k) of cap 301 but always follow the even unless for good reasons otherwise ordered. I have no reason to deny the landlord costs.

31. In conclusion therefore, the following final orders commend to me:-i.The tenancy notice issued by the landlord upon the tenant dated October 18, 2021 is hereby upheld under section 7(1) (g) and 9(1) (a) of cap 301, Laws of Kenya.ii.The tenant shall deliver vacant possession of the suit premises known as Makongeni ‘B’ Hotel Busia Town with immediate effect and in default shall be evicted therefrom by a licensed Auctioneer who shall be provided with security by the OCS, Busia Police Station.iii.The landlord is awarded costs of Kshs 50,000/-.It is so ordered.

RULING DATED, SIGNED AND DELIVERED VIRTUALLY THIS 19TH DAY OF AUGUST 2022. HON. GAKUHI CHEGEVICE CHAIRBUSINESS PREMISES RENT TRIBUNALIn the presence of:-Kamau for the LandlordIddi for the Tenant