[2021] KEBPRT 73 (KLR)
The Tribunal determined that neither party's valuation was entirely persuasive given the unique circumstances of the canteen's operation—restricted hours, limited clientele, and closure during school holidays. The Tribunal exercised its discretion to fix the rent at Kshs.40,000 per month, a figure between the...
Source-derived case information.
- Citation
- [2021] KEBPRT 73 (KLR)
- Parties
- Applicant: Patos Trading Company Limited; Respondent: Light International School
- Court
- Business Premises Rent Tribunal
- Jurisdiction
- Kenya
- Case Number
- Tribunal Case 945 of 2020
- Procedural Posture
- Rent Determination / Judgment
- Outcome
- rent fixed and offset ordered
- Legal Topics
- Rent Assessment, Landlord Tenant Disputes, Commercial Premises Lease, Advance Rent Offset
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Patos Trading Company Limited
Applicant
Light International School
Respondent
Procedural Posture
Rent Determination / Judgment
Legal Issues
- 1 What is the fair monthly rent payable for the canteen premises within Light International School.
- 2 How should the Kshs.700,000/- contributed by the tenant be treated in relation to rent arrears.
- 3 Whether the rent should be adjusted for periods when the school is closed.
Ratio Decidendi
The Tribunal determined that neither party's valuation was entirely persuasive given the unique circumstances of the canteen's operation—restricted hours, limited clientele, and closure during school holidays. The Tribunal exercised its discretion to fix the rent at Kshs.40,000 per month, a figure between the parties' proposals and reflective of both market comparables and the operational limitations. The Kshs.700,000 paid by the tenant was to be applied towards rent arrears, and the rent would only be payable during periods when the school is operational, excluding holidays and government closures. Each party was ordered to bear its own costs.
Court Disposition
rent fixed and offset ordered
Orders
- The rent payable by the tenant for the canteen within Light International School is fixed at Kshs.40,000 per month, excluding school holidays and government closures.
- The rent applies from 8th November 2016 when the tenant took possession.
Full Case Text
Judgment text and source record
42 paragraphs
REPUBLIC OF KENYA
BUSINESS PREMISES RENT TRIBUNAL
VIEW PARK TOWERS 7TH & 8TH FLOOR
TRIBUNAL CASE NO. 945 OF 2020 (NAIROBI)
PATOS TRADING COMPANY LIMITED.......................................APPLICANT/TENANT
VERSUS
LIGHT NTERNATIONAL SCHOOL.......................................RESPONDENT/LANDLORD
JUDGMENT
1. Around January 2017, the parties herein entered into an oral arrangement regarding operations of one of the canteens within the Landlord’s institution.
2. At that time, the canteen was a temporary structure and the landlord being desirous of a permanent development entered into an agreement with the tenant to contribute Kshs.700,000/- which could then be offset against future rent.
3. A dispute arose after the new canteen was constructed and the tenant took possession thereof as parties could not agree on the amount payable as rent for the new canteen premises.
4. On 6th August 2021, this Tribunal directed that parties file rent assessment reports by qualified valuers to assist it determine the fair rent in respect of the demised premises in line with Section 12 (1) (b) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act Cap. 301, Laws of Kenya.
5. The landlord’s report was complied by Index-Africa Limited Registered Valuers whose recommended monthly rental estimate is Kshs.51,600. 00 at the rate of 112. 00 per square feet and service charge of Kshs.8. 00 per square feet. The subject floor area is 430 square feet.
6. On the other hand, the tenant’s report was compiled by Hossano Valuers Ltd which recommends monthly rent of Kshs.26,040 exclusive of service charge for the school canteen. The lettable area considered is 417 sq feet or 38. 75 square metres.
7. The tenant’s report has taken into consideration 4 other comparables as follows:-
(a) Canteen next to Catholic University of East Africa (CUEA) along Bogani Eastlane, off Bogani road with a total lettable area of 5. 95 sq metres whose monthly rent is Kshs.12,000/- translating to Kshs.2,016. 81 per square metre.
(b) Canteen at the Catholic University Law School with a lettable area of 18. 6 square metres whose monthly rent is Kshs.12,500 translating to Kshs.672 per square metre.
(c) Shop No. S11 Liberty Centre along Langata Road opposite Silanga Road with a total lettable area of 14. 76 suare metres whose monthly rent is Kshs.25,000/- translating to Kshs.1693. 77 per square metre.
(d) Shop no. 1 at Langata, diagonally opposite Langata South Road with a total lettable area of 31. 50 square metres whose monthly rent is Kshs.50,000. 00 translating to Kshs.1,587. 30 per square metre.
8. The justification given by the tenant’s valuer for the proposed fair rent are that this is a school canteen situated in Light Academy compound selling snacks with its operating hours being stipulated to be:-
“Morning: 10. 00-1025a.m.
Lunch: 1. 00-2. 00p.m
Evening: 6. 00-7. 00p.m.
9. The canteen is located within the school and only open to students and staff. The operating time is restricted in terms of hours of the day with breaks in between. It only operates when schools are open and remain closed during holidays i.e approximately 4 months in a year.
10. The canteen customers are the students whose purchase power is limited and only those from the school are served.
11. In view of the foregoing, the valuer for the tenant considered compressed flow of customers, secluded location and limited hours of operation to enable them arrive at the figure quoted.
12. I have noted from the record that as early as the year 2018, the tenant had offered to pay Kshs.35,000/- against the landlord’s proposal of Kshs.45,000/-. This proposal is contained in a letter dated 20th November 2018 which is on record.
13. Secondly, if one was to use the same comparables given by the tenant’s valuers vis-a vis the lettable area, the rent would be far much in excess of the amount recommended by the landlord’s valuers.
14. In the premises, I shall use my discretion to fix the monthly rent payable at Kshs.40,000/- per month with effect from 8th November 2016 when the new canteen was handed over by the landlord’s head teacher as per document’s on record.
15. In conclusion therefore, the following final orders commend to me:-
(a) The rent payable by the tenant in respect of the suit premises being the canteen within Light International School is Kshs.40,000/- per month excluding school holidays and government closures.
(b) The said rent shall apply from 8th November 2016 when the tenant took possession.
(c) The amount of Kshs.700,000/- paid as advance rent shall be applied towards defraying part of arrears that have accrued in respect of the suit premises todate.
(d) Each party shall bear own costs of the suit.
It is so ordered.
JUDGMENT DATED, SIGNED AND DELIVERED VIRTUALLY THIS 17TH DAY OF DECEMBER 2021.
HON. GAKUHI CHEGE
VICE CHAIR
BUSINESS PREMISES RENT TRIBUNAL
In the presence of:-
Oyugi for Tenant
Miss Mangla for the Landlord