[2025] KEBPRT 157 (KLR)

Mwangi v Njoki (Tribunal Case E564 of 2023) [2025] KEBPRT 157 (KLR) (14 March 2025) (Judgment)

Neutral citation: [2025] KEBPRT 157 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E564 of 2023

Gakuhi Chege, Chair & J Osodo, Member

March 14, 2025

Between

James Mwangi

Tenant

and

Kellen Njoki

Landlord

Judgment

A. Dispute Background 1. On 23rd May 2023, the landlord wrote a letter to Warleen Auctioneers instructing them to levy distress against the tenant’s business premises known as Oceanic Pub & Butchery for recovery of rent arrears amounting to Kshs 1,996,676/= by way of distress for the same under the Distress for Rent Act, Cap 293, Laws of Kenya.

2. The tenant being opposed to the distress moved to this Tribunal and obtained interim orders restraining the landlord and the Auctioneers from continuing with the distress.

3. In a ruling delivered on 19th October 2023, the interim orders of injunction were confirmed pending the hearing and determination of the reference. The tenant was directed to continue paying the monthly rent to the landlord and to clear any arrears arising from June 2023 on or before the 5th day of each month failing which the order of injunction would automatically lapse on 6th November 2023 and the landlord would be entitled to use lawful means to recover the same.

4. Both parties were directed to file and exchange their witnesses’ statements and rent account statements and all other documents in support of their respective cases within Twenty-one (21) days thereof failing which the hearing would proceed on the basis of documents already on record.

5. In compliance with the aforesaid directions, the landlord filed a witness statement and a further list of documents both dated 3rd November 2023 attaching the overall statement of rent account as at the date of filing, rent account statement for the period between June – November and replying affidavit dated 3rd October 2023 in Muranga CMCC No. 182 of 2020.

6. The rent account statement showed that the tenant owed a sum of Kshs 2,080,920/= made up as follows: Kshs 682,582/= being rent increment for the period 1st June 2016 to December 2019 as per the court ruling, Kshs 873,740/= being rent arrears for the period November 2019 to August 2021 & Kshs 524,598/=.

7. The landlord also filed a witness statement and supplementary statement by Charles Thigu Gachuhi together with a further list of documents dated 16th January 2024 with a current overall statement of rent accounts as at 15th January 2025 and another statement of rent accounts for the period between June -January.

8. The tenant on the other hand filed a witness statement and list of documents dated 27th November 2023 with Ten (10) documents which include a rent account statement from May to November, Expenses breakdown analysis for the period between January 2020 to September 2021, Billing statements from Kenya Power & MUWASCO, Rent Statements from January 2020 to April 2023, Receipt dated 25/09/2023, Receipt dated 14/10/2023, Receipt dated 6/11/2023, Bill of Quantities and Minutes of meeting held on 11th October 2021.

9. When the matter was finally fixed for hearing, both parties adopted their filed witnesses’ statements and documents already on record and were duly cross examined.

10. In his evidence before the Tribunal, the tenant produced his rent account statement together with expenses incurred in complying with Public Health requirements which led to closure of the business for 20 months between January 2020 to September 2021.

11. According to the tenant, the cost for renovating the hotel premises was Kshs 2. 3 Million as per the Ministry of Public Works Bill of Quantities produced as his exhibit 9.

12. He also produced minutes of a meeting held on 11th October 2021between him, the landlord and members of her family whereat, it was agreed that the tenant owed Kshs 1,491,322/=. The tenant agreed to pay the sum of Kshs 682,582/= on or before 31st December 2021 which was to be paid simultaneously with the current monthly rent of Kshs 80,874/= which was to be deposited separately for ease of accounting.

13. The renovation cost of Kshs 1. 1 Million as provided by the tenant was to be ascertained by the landlord who was to engage a professional to provide a bill of costs on the required repairs as per the County Health Office. The tenant was also to seek for a professional to provide a bill of costs for the same. The exercise was to be completed by 15th November 2021. The landlord and the tenant were thereafter to meet and agree on how the cost of repairs would be settled.

14. The amount of Kshs 808,704/= owing by the tenant would be discussed and modalities of payment agreed upon once the professional reports were available. The tenant was to give a receipt for the payment of December 2019 rent for confirmation with the bank statement. The minutes were signed by all those in attendance.

15. According to the tenant, the sum of Kshs 808,704/= reflected in the minutes related to the accrued rent during the period of closure of the business. After the said meeting and before the agreed period of one month was over, the landlord sent Auctioneers to the tenant’s business premises to recover the money which was yet to be agreed upon. The said action prompted the tenant to file the instant proceedings.

16. It is the tenant’s case that the cost of renovation of the premises was to be met by the landlord upon her undertaking an independent Bill of Quantities. In absence of the landlord’s Bill of Quantities, the tenant claims that she owes him Kshs 600,000/= in renovation costs. He denies being in rent arrears.

17. According to the tenant, the only period in rent dispute is January 2020 to May 2023 with the figure charged during the hotel closure being Kshs 40,437/= which according to him is not payable.

18. In cross examination, the tenant confirmed that from 1st June 2016, rent increased from Kshs 65,000/= to Kshs 80,874/=. He stated that by the time of the meeting held on 11th October 2021, the repair costs had already been incurred but was not agreed upon. The landlord was to meet the costs of the repairs.

19. It was the tenant’s evidence that between January 2020 and September 2021, he did not operate the hotel as it was under repairs. His accountant applied a figure of Kshs 80,000/= instead of Kshs 80,874/= creating a difference of Kshs 874/= for the period in dispute. The tenant’s rent account statement showed arrears of Kshs 282,043/=.

20. The tenant also admitted a sum of Kshs 682,582/= for the period 1st June 2016 to December 2019 at Kshs 15,000/= per month which was subject of the discussion at the meeting of 11th October 2021. The amount was to be offset by 15th November 2021 upon a second Bill of Quantities being undertaken by the landlord.

21. On her part, the landlord testified in material part that the tenant filed MURANGA BPRT NO. 3 OF 2017 protesting the increment of rent and in a judgement delivered on 4th December 2020, the rent payable was increased from Kshs 65,000/= to Kshs 80,874/= exclusive of VAT.

22. On 12th March 2024, both parties were directed to file and exchange their witnesses’ statements and documents in compliance with Order 11 of the Civil Procedure Rules. The tenant was to pay the outstanding arrears in six (6) months and in default, the landlord was allowed to distress without further orders of the Tribunal. The amount in arrears by then was Kshs 682,582/= being rent underpayments for the period between 1st June 2016 to December 2019. In a meeting attended by both parties, the tenant agreed to settle the arrears then standing at Kshs 1,491,322/= but failed to do so. The landlord relied on the minutes of 11th October 2021 which were produced by the tenant.

23. According to the landlord, the tenant accrued additional arrears of Kshs 1,398,338/= between November 2009 to 3rd November 2023. During a meeting held on 2nd February 2023, the tenant conceded arrears of Kshs 1,912,054/= and expressed his challenges in paying the same.

24. The landlord denied having given consent towards the renovations carried out by the tenant on the suit premises. She denied liability to meet the same saying that the tenant made structural changes to the building without the consent of the County Government.

25. The extensions resulting from the renovations were effected outside the lettable area as defined in the previous Tribunal proceedings. As at the date of the landlord’s statement, the tenant was in rent arrears of Kshs 2,080,920/=. In cross examination, the landlord confirmed that she had agreed with the tenant to pay half rent during the period of closure of the suit premises.

26. The landlord stated that she was paying for water and electricity for the suit premises. The landlord admitted that a sum of Kshs 682,582/= be setoff against the judgement entered against the tenant in the previous case. She stated that her son by name CHARLES THIGO maintains the rent accounts for the suit premises.

27. The landlord called her said son as LW2 in this matter. He relied on his filed witness statements. He is an accountant by profession and a registered member of the Chartered Institute of Accountants. He produced the landlord’s rent account statements dated 15th January 2023 and 20th November 2023. All rent payments are made through the bank account.

28. According to the said witness, the tenant owed Kshs 1,9994,676/= as at the date when the landlord sent Auctioneers to recover the same. A meeting was held on 11th October 2021 during which meeting it was agreed that Kshs 1,491,322/= was owing by the tenant as at August 2021. From September 2021 to the date of levying distress, a further sum of Kshs 438,354/= had accrued to make a total of Kshs 1,994,676/=. The said amount had not been paid by the date of hearing.

29. During the meeting of 11th October 2021, the tenant and the landlord agreed on payment of 50% rent during the Covid-19 pandemic which agreement was reflected in the minutes of the said meeting which were signed by all the parties.

30. The tenant did not pay rent for the period running from February 2020 to September 2021 though he was obligated to do so. The witness stated that the tenant was not entitled to a waiver of Kshs 35,600/= when the premises were closed. Security, water and electricity bills are not shared with the landlord.

31. According to the witness, the tenant claimed to have renovated the suit premises at a cost of Kshs 1,100,000/= which the landlord agreed to ascertain. The tenant did not provide documentation for the renovation costs. He said he had receipts but none were availed. It was the evidence of the landlord’s witness that no authority from her was sought nor granted for the said renovations.

32. According to the Bill of Quantities produced by the tenant, the renovation cost was Kshs 2,306,810/=. The said Bill was challenged on the basis that it is not letterheaded, it is not signed, does not indicate who prepared it and is headed “PROPOSED RENOVATION WORKS” and dated March 2020. The name of the tenderer is blank and the address and signature is blank. All details on the last page are missing/blank.

33. The closure notice from the County Government was addressed to the tenant. The closure was based on insanitary condition of the suit premises. It listed 8 items that required to be addressed. It is dated 3rd January 2020 and referred to an earlier notice dated 11th January 2019. An inspection report conducted on 16th August 2021recommended that the closure of the suit premises would continue until completion of the works. A subsequent letter dated 20th August 2021 cleared the suit premises for reopening with six items remaining to be accomplished.

34. In cross examination, the landlord’s witness stated that the landlord was not aware of the renovations carried out by the tenant as she was not then living in MURANGA. The costs thereof were claimed during the meeting of 11th October 2021. By that time, the renovations had been concluded and the meeting was held at the suit premises. The cost of the renovation was not ascertained and the landlord did not carry out her own Bill of Quantities. The cost of renovation according to the witness were not to be offset against the rent payable. It was his evidence that the renovations were carried out on the extension outside the lettable area and were not directed at addressing the insanitary conditions of the suit premises.

B. Issues for Determination 35. Based on the materials placed before the Tribunal, the following issues arise for determination: -a.Whether the tenant owed rent arrears to the landlord at the date of the proclamation for distress and as at the date of hearing of this case and if so, how much?b.Whether the tenant is entitled to offset the cost of renovation of the suit premises against the rent account.c.Who is liable to pay the costs of the suit?

C. Analysis and Determination Issue a) Whether the tenant owed rent arrears to the landlord at the date of the proclamation for distress and as at the date of hearing of this case and if so, how much? 36. On 23rd May 2023, the tenant was served with a proclamation of distress for rent dated 23rd May 2023 by Warleen Auctioneers (initial 2nd Respondent herein) on instructions of the landlord seeking to recover Kshs 1,994,676/l= being accumulated rent arrears.

37. The said distress happened long after the meeting of 11th October 2021 in which it was agreed that that the tenant owed Kshs 1,491,322/=. The tenant agreed to pay the sum of Kshs 682,582/= on or before 31st December 2021 which was to be paid simultaneously with the current monthly rent of Kshs 80,874/= which was to be deposited separately for ease of accounting.

38. The renovation cost of Kshs 1. 1 Million as provided by the tenant was to be ascertained by the landlord who was to engage a professional to provide a bill of costs on the required repairs as per the County Health Office. The tenant was also to seek for a professional to provide a bill of costs for the same. The exercise was to be completed by 15th November 2021. The landlord and the tenant were thereafter to meet and agree on how the cost of repairs would be settled.

39. The amount of Kshs 808,704/= owing by the tenant would be discussed and modalities of payment agreed upon once the professional reports were available. The tenant was to give a receipt for the payment of December 2019 rent for confirmation with the bank statement. The minutes were signed by all those in attendance.

40. According to the tenant, the sum of Kshs 808,704/= reflected in the minutes related to the accrued rent during the period of closure of the business. After the said meeting and before the agreed period of one month was over, the landlord sent Auctioneers to the tenant’s business premises to recover the money which was yet to be agreed upon. The said action prompted the tenant to file the instant proceedings.

41. It is the tenant’s case that the cost of renovation of the premises was to be met by the landlord upon her undertaking of an independent Bill of Quantities. In absence of the landlord’s Bill of Quantities, the tenant claims that she owes him Kshs 600,000/= in renovation costs. He denies being in rent arrears.

42. According to the tenant, the only period in rent dispute is January 2020 to May 2023 with the figure charged during the hotel closure being Kshs 40,437/= per month which according to him is not payable.

43. In cross examination, the tenant confirmed that from 1st June 2016, rent increased from Kshs 65,000/= to Kshs 80,874/=. He stated that by the time of the meeting held on 11th October 2021, the repair costs had already been incurred but was not agreed upon. The landlord was to meet the costs of the repairs.

44. It was the tenant’s evidence that between January 2020 and September 2021, he did not operate the hotel as it was under repairs. His accountant applied a figure of Kshs 80,000/= instead of Kshs 80,874/= creating a difference of Kshs 874/= for the period in dispute. The tenant’s rent account statement showed arrears of Kshs 282,043/=.

45. The tenant also admitted a sum of Kshs 682,582/= for the period 1st June 2016 to December 2019 at Kshs 15,000/= per month which was subject of the discussion at the meeting of 11th October 2021. The amount was to be offset by 15th November 2021 upon a second Bill of Quantities being undertaken by the landlord.

46. Having analyzed both parties’ cases, we are of the considered opinion that the tenant owed the sum of Kshs 1,994,676/= which the landlord sought to recover by way of distress. The tenant did not demonstrate by way of empirical evidence that he was up to date in his rent payments. The landlord was therefore right in seeking to recover the amount by way of distress pursuant to Section 3(1) of the Distress for Rent Act, Cap 293, Laws of Kenya.

Issue (b) Whether the tenant is entitled to offset the cost of renovation of the suit premises against the rent account. 47. In January 2020, the Kiharu Public Health Officer did an inspection of the suit premises and ordered its closure through a notice dated 3rd January 2020 addressed to the tenant on account of insanitary conditions which required to be addressed.

48. On 16th August 2021, another inspection was carried out by the Kiharu Sub-County Public Health Officer who recommended the continued closure thereof until completion of the renovation works. The premises were finally cleared for reopening the same month.

49. The tenant at the meeting of 11th October 2021 claimed to have used the sum of Kshs 1. 1 Million for the renovation of the suit premises which was to be verified independently by the landlord. The agreement was captured in the minutes of the said meeting. The landlord did not carry out the independent evaluation of the renovation works. The tenant at the hearing of this matter relied on a bill of Quantities which is not letterheaded, it is not signed, does not indicate who prepared it and is headed “Proposed Renovation Works” dated March 2020. The name of the tenderer is blank and the address and signature is blank. All details on the last page are missing/blank.

50. It is our considered opinion and we so find, that the document is not authentic nor capable of being relied upon to claim the cost of the repairs/renovations carried out in the suit premises. The tenant presented his cost of the renovations in the sum of Kshs 1. 1 Million during the meeting of 11th October 2021. The same was to be verified by both the landlord and tenant through independent professionals. The landlord disputed the said claim on the basis that the renovations were done without her consent outside the lettable area. The only amount agreed to be paid by the tenant was a sum of Kshs 682,582/= in rent arrears on or before 31st December 2021.

51. A further sum of Kshs 808,704/= owing by the tenant to the landlord was to be discussed and modalities for the payment thereof agreed upon once the professional report was available. The payment of December 2019 rent was to be confirmed through the bank statement.

52. In absence of the professional report by both the landlord and the tenant, we shall adopt the figure of Kshs 1. 1 Million as reflective of the costs of the repairs undertaken on the suit premises by the tenant. The issue of lack of the landlord’s consent was not raised at the meeting of 11th October 2021 whose minutes are signed by all those who were present including LW2 (CHARLES THIGU). It is our view that the closure of the suit premises by the Public Health Authorities and the renovations carried out was within the landlord’s notice and she is estopped by her conduct from denying that the renovations were carried out without her consent. She never moved to stop the same.

53. We also find that the nature of the said repairs/renovations were in respect of the suit premises and the argument that they were carried outside the lettable area is not reasonable. The closure notice speaks to major repairs being carried out within the hotel premises and outside which areas comprise the tenancy in question and the costs incurred are reasonable. They are improvements of the suit premises which will outlive the current tenancy and the landlord would escape with an unjust enrichment if she is not made to meet the costs thereof.

54. The cost of the repairs will therefore be deducted from the amount of rent owing by the tenant in the sum of Kshs 2,003,668. 00 as at 1st January 2024 to leave the balance owing by him to the landlord at Kshs 903,668/=. We shall enter judgement for the said balance in favour of the landlord.

Issue (c) Who shall bear the costs of the reference? 55. As regards costs, the same are in the Tribunal’s discretion under Section 12(1)(k) of Cap. 301, but always follow the event unless for good reasons otherwise ordered. Both parties have partially succeeded in their respective claims and as such, each party shall meet own costs of the suit.

D. Orders 56. In view of the above analysis, the final orders which commend to us are;a.The tenant is entitled to a sum of Kshs 1,100,000/= being compensation by the landlord towards the cost of repairs/renovations undertaken by him in the suit premises known as Oceanic Pub & butchery in Muranga Town.b.The landlord is entitled to a sum of Kshs 2,003,668. 00 being the rent arrears owing by the tenant to her as at 1st January 2024. c.The amount awarded to the tenant shall be offset against the rent account to leave the balance payable by him to the landlord at Kshs 903,668. 00. d.The landlord shall be entitled to use lawful means to recover the said sum of Kshs 903,668. 00 from the tenant if not paid.e.Each party shall bear own costs of the reference.f.There shall be a stay of execution of the judgement for a period of Thirty (30) days from the date hereof.It is so ordered.

JUDGEMENT DATED, SIGNED AND DELIVERED VIRTUALLY THIS 14TH DAY OF MARCH 2025. HON. GAKUHI CHEGE - (PANEL CHAIRPERSON)HON. JOYCE AKINYI OSODO - (MEMBER)BUSINESS PREMISES RENT TRIBUNALIn the presence of: -Njoroge for the tenantWaweru for the landlord