[2023] KEBPRT 1321 (KLR)
The Tribunal found that the landlord's valuation report was more reliable, as it provided comparables and an average market rent per square foot. The tenant's valuation report was disregarded because it was based on the incorrect assumption that the leasehold interest had expired, whereas the certificate of lease...
Source-derived case information.
- Citation
- [2023] KEBPRT 1321 (KLR)
- Parties
- Applicant: Adiel Mate Thomas; Respondent: Muranga Highway Pub; Respondent: Markie Investment
- Court
- Business Premises Rent Tribunal
- Jurisdiction
- Kenya
- Case Number
- Tribunal Case E540 of 2022
- Procedural Posture
- Miscellaneous Application / Ruling on Reference Against Landlord's Notice to Alter Terms of Tenancy
- Outcome
- Tenant's reference dismissed. Landlord's notice to alter terms of tenancy approved.
- Judges
- CN Mugambi
- Legal Topics
- Controlled Tenancy, Rent Increase Dispute, Valuation Reports, Business Premises, Market Rent Assessment
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Adiel Mate Thomas
Applicant
Muranga Highway Pub
Respondent
Markie Investment
Respondent
Procedural Posture
Miscellaneous Application / Ruling on Reference Against Landlord's Notice to Alter Terms of Tenancy
Legal Issues
- 1 Whether the landlord's notice to increase rent to Kshs. 6,000 per month is justified under the relevant tenancy laws.
- 2 Whether the tenant's objection to the rent increase based on the alleged expiry of the leasehold interest is valid.
- 3 Which valuation report should be adopted in determining the fair market rent for the premises.
Ratio Decidendi
The Tribunal found that the landlord's valuation report was more reliable, as it provided comparables and an average market rent per square foot. The tenant's valuation report was disregarded because it was based on the incorrect assumption that the leasehold interest had expired, whereas the certificate of lease showed a 99-year term from 1983, still in force. The Tribunal concluded that the proposed rent increase to Kshs. 6,000 per month was justified, being below the calculated market rent of Kshs. 12,888 per month for the tenant's shop. The landlord's notice to alter the terms of tenancy was approved, and the tenant's reference was dismissed with costs to the landlord.
Court Disposition
Tenant's reference dismissed. Landlord's notice to alter terms of tenancy approved.
Orders
- The landlord's notice to alter the terms of tenancy is approved.
- The new rent shall be Kshs. 6,000 per month effective 1.6.2023.
Full Case Text
Judgment text and source record
45 paragraphs
Thomas v Muranga Highway Pub & another (Tribunal Case E540 of 2022) [2023] KEBPRT 1321 (KLR) (31 May 2023) (Ruling)
Neutral citation: [2023] KEBPRT 1321 (KLR)
Republic of Kenya
In the Business Premises Rent Tribunal
Tribunal Case E540 of 2022
CN Mugambi, Chair
May 31, 2023
Between
Adiel Mate Thomas
Applicant
and
Muranga Highway Pub
1st Respondent
Markie Investment
2nd Respondent
Ruling
1. The landlords notice to alter terms of tenancy is the one dated 17. 5.2022. it seeks to increase rent up to Kshs. 6,000/= with effect from 1. 8.2022. The grounds upon which rent is sought to be increased are that the rent paid by the tenants is far much below the market rates.
2. By a reference to the Tribunal dated 23. 6.2027, the tenant has objected to the alteration notice and hence these proceedings.
3. Both parties have filed their respective valuation reports and which I summarize as follows hereunder.
The Landlord’s Valuation Report 4. The landlords valuation report is the one prepared by upcountry valuers. The report has the following comparables;-Plot No. Lettable area Sq. ft Rent per sq. foot (Kshs.) Monthly rent (Kshs.)
a. Block 2/101 130 177 10,000/=
b. Block 2/103 139 36 5,000/=
c. Block 2/93 130 115 15,000/=
d. Block 2/529 123 53 6,500/=
e. Block 2/106 308 39 12,000/=
f. Block 2/93 116 60 7,000/=
g. Block 2/93 204 50 5,000/=
h. Block 2/101 277 36 10,000/=
i. Block 2/101 204 49 10,000/=
j. Block 2/529 120 29 3,500/=
k. Block 2/101 179 112 20,000/=
l. Block 2/94 1000 90 90,000/=
m. Block 2/47 350 69 24,000
n. Block 2/106 561 36 20,000/=
o. Block 2/107 352 57 20,000/=
p. Block 2/ 286 70 20,000/=
5. The average rent per square foot as from the report is Kshs. 72/= per square foot per month.
The Tenant’s Valuation Report 6. The tenant’s valuation report is the one prepared by Metropole Realtors. The report on its last page has the following remarks;a.As noted earlier in the report, application for an official title search was unsuccessful since the previous leasehold interest of the plot has expired meaning the previous registered owners have currently no existing interest in the plot.b.Market and rental market values are based on the interest that one has in any particular property. We therefore cannot put any value in the property until the lease has been renewed. We have not been given any proof that this has been achieved yet.c.Subject to our terms of reference, limiting conditions and general remarks, we are not able to value L.R. No. Murang’a Municipality Block 11/102 due to lack of an existing interest.
7. It is clear from the conclusion reached by the tenant’s valuers that; no market rates were assessed by the said valuers.
8. I have seen the certificate of lease for Murang’a Municipality/Block 11/102. The term of the lease is 99 years from 1. 1.1983 and the certificate of lease was issued on 12. 2.1997. clearly, the lease has not expired as suggested by the tenants valuers.
9. The tenant occupies shop No. A3 in L.R. No. Murang’a Municipality/Block 11/102 and according to the tenant’s letter dated 16. 6.2022, the tenant pays a monthly rent of Kshs. 4,060/=. The tenant’s shop occupies 179 square feet, which according to the average adopted by the landlords valuers translates to a monthly rent of Kshs. (179 x 72) 12,888/=.
10. Faced with the two valuation reports and for the purposes of determining this reference, I will adopt the valuation report by the landlord’s valuers as the better report.
11. Consequently, I approve the landlord’s notice to alter the terms of tenancy and order that the new rent shall be Kshs. 6,000/= per month. The effective date shall be 1. 6.2023.
12. The tenant’s reference is dismissed with costs to the landlord assessed at Kshs. 30,000/=.
RULING DATED, SIGNED & DELIVERED VIRTUALLY THIS 31ST DAY OF MAY, 2023HON. CYPRIAN MUGAMBICHAIR PERSON31. 5.2023In the presence of;-No appearance of parties