[2022] KEBPRT 100 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

AT NAIROBI

TRIBUNAL CASE NO. E335 OF 2021

WILFRED KAMAU NDUNG’U.......LANDLORD/APPLICANT

VERSUS

BERYL MATE......................................TENANT/RESPONDENT

RULING

A. Parties and Representatives

1. The Applicant Wilfred Kamau is the Landlord and the proprietor of the suit property situated within Kamiti Road Jacaranda Estate (hereinafter known as the ‘Landlord’).

2. The firm of Faith Akoth Oketch & Co. Advocates represent the Applicant/Landlord in this matter. faithoketchadvocates@gmail.com

3. The Respondent Beryl Mate is the Tenant and rented space for the business in the suit property situated within Kamiti Road Jacaranda Estate (hereinafter known as the ‘Tenant’)

4. The firm of MJM Law LLP represent the Respondent/Tenant in this matter. info@mjmlaw.co.ke

B. The Dispute Background

5. The Landlord and the Tenant entered into an agreement for the renting out of a car wash space where the Tenant would pay Kshs. 20,000/- as the monthly rent.

6. On 5th July 2021 the Landlord wrote a demand letter to the Tenant claiming a sum of Kshs. 90,000/- being outstanding indebtedness owing as per their agreement.

7. In response the Tenant also issued a demand letter to the Landlord claiming a sum of Kshs. 185,000/-

8. The Landlord/Applicant has since moved this Tribunal by way of reference and a notice of motion application dated 23rd July 2021 under section 12(4) of the Landlords and Tenants (Shops, Hotels and Catering) Establishments Act Cap 301. The landlord was seeking amongst other orders that pending the hearing and determination of the reference that the Tribunal be pleased to give orders allowing the landlord to acquire vacant possession of the premises as well as orders compelling the tenant to pay Kshs. 90,000 /- being outstanding indebtedness and Kshs. 20,000/- being rent for the month of July 2021.

9. The Landlord filed a reference and notice of motion Application dated 23rd July 2021 which pleadings form the basis of this claim. The Landlord has also filed a further affidavit dated 9th September 2021.

10. The Tenant has filed a replying affidavit dated 20th August as well as a further affidavit dated 23rd September 2021.

11. Parties have filed submissions and the matter was fixed for ruling

C. List of Issues for Determination

12. It is the contention of this Tribunal that the issues raised for determination are as follows;

Main issue is whether the contract entered into was breached and if so by who?

What is the consequences of the said breach?

D. Analysis and Findings

Whether the Tenant is in breach of the oral agreement entered into between themselves and the Landlord.

13. It is clear that in exercising the powers conferred under the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, this Honourable Court must restrict itself to the powers conferred to it under Section 12 of the said Act.The jurisdiction of this Tribunal as espoused under the provisions of Section 12 limits the jurisdiction of this Tribunal to dealing with disputes emanating from controlled tenancies.

14. Section 2 of CAP 301 defines a controlled tenancy as follows

“Controlled tenancy” means a tenancy of a shop, hotel or catering establishment—

(a) which has not been reduced into writing; or

(b) which has been reduced into writing and which—

(i) is for a period not exceeding five years; or

(ii) contains provision for termination, otherwise than for breach of covenant, within five years from the commencement thereof;

15. In this case the Landlord annexed a tenancy agreement in their supporting affidavit which from the observation of this Tribunal has not been executed by either of the parties. As a result, the Tribunal cannot construe a tenancy relationship from the annexed document. However, this Tribunal establishes that there was an oral agreement between the parties, a fact that both parties have agreed to in their supporting affidavits. The said oral agreement falls within the definition cited under Section 2(a) above.

16. Having established that there was an agreement that suffices as a controlled tenancy, the Tribunal will then proceed to establish whether either of the parties was in breach of the terms of the agreement.

17. The Landlord has averred in their application that the Tenant has arrears amounting to Kshs. 90,000/- being outstanding indebtedness and Kshs. 20,000/- being rent for the month of July. The Landlord further claims that the Tenant had abandoned the premises and further her obligation under the agreement and obligations in a tenancy to pay monthly rent.

18. The Tenant avers that the Landlord is entitled to refund her Kshs. 185,000/- for costs incurred in making the premises viable for commercial use as well as the rent deposit and rent for the month of June. The Tenant claims this amount since she alleges that the lease agreement between the parties was terminated when the Tenant found out that the premises was not fit for purpose as a car wash.

19. Section 12(g) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act provides that;

(g) where the Landlord fails to carry out any repairs for which he is liable-

(i) to have the required repairs carried out at the cost of the Landlord and, if the Landlord fails to pay the cost of such repairs, to recover the cost thereof by requiring the Tenant to pay rent to the Tribunal for such period as may be required to defray the cost of such repairs, and so that the receipt of the Tribunal shall be a good discharge for any rent so paid;

(ii) to authorize the tenant to carry out the required repairs, and to deduct the cost of such repairs from the rent payable to the Landlord;

20. The above provision grants the Tribunal powers to give orders in a situation where there are repairs to be carried out by the Landlord and the landlord fails to uphold this obligation. In this case, the Tenant has provided that at the time of entering into the agreement the car wash did not have an adequate supply of water. The Landlord is not in opposition of this fact as he states that he informed the Tenant of the same.

21. The Tribunal is of the opinion that this was a condition that fell under the responsibilities of the Landlord in pursuit of making the space fit for use by the Tenant prior to occupation and use by the Tenant more so because the condition came to light before the parties entered into an agreement and before the Tenant occupied the space.

22. As a result of the above it is the considered view of this Tribunal that the repairs should have been done at the cost of the Landlord. In this case, the Tenant claims and the Tribunal agrees with her cause of the attached proof of the same in their replying affidavit that she sent Kshs. 70,000/- and a further Kshs 115,000/- being goodwill and other charges as consideration for entering into the contract.

23. In this case, the Tenant had already carried out the repairs to deepen the borehole and have an access road, which were done at their own costs. The Tribunal is then persuaded to agree with the Tenant that the same amount should be refunded in form of having it deducted from the monthly rent payable to the Landlord. But is this a possibility.

24. The Tenant occupied the space for one month only to realize the water was not of merchantable quality as had been promised by the Landlord and the said business being a carwash the situation was not tenable and they had to move out. As such the relationship ended prematurely.

25. The Tenant alleges that upon occupation of the car wash space, she realized that the water supply was still inadequate despite having been assured by the Landlord that the same had been sorted. She informed the Landlord of this and the Landlord informed her that she needed to apply for water connection from Nairobi Water. The Tenant requested for a written agreement before investing more money in the premises to which the Landlord refused.

26. As a result of the above the Tenant has stated in their replying and further affidavit that they thereafter left the premises due to the fact that they could not effectively run the business. The Landlord has admitted to this fact in their further affidavit by alleging that the Tenant abandoned the premises.

27. From the foregoing, the Tribunal finds that the Landlord took back his premises and cannot claim any arrears from the month of July 2021. In addition, the Landlord must refund the Tenant monies paid on the onset as the breach emanated from his end as keeping the same would amount to unjust enrichment. The rent for the one month will not be refunded as the Tenant did some business albeit low.

E. Orders

a. The upshot is that the Landlord’s application dated 23rd July 2021 and reference dated 23rd July 2021 are hereby dismissed in the following terms;

b. The Landlord’s shall refund to the Tenant Kshs. 70,000/- being costs of deepening the borehole and construction of the access road and Kshs. 115,000/- being other charges paid by the tenant within 30 days.

c. The Landlord shall have vacant possession of the premises. Tenant at liberty to collect any items of his still at the premises.

d. Tenant shall have costs.

HON A. MUMA

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL

Ruling dated, signed and delivered virtually by Hon A. Muma this 31stday ofJanuary, 2022 in the presence of Mainaholding brief forOketchfor theLandlordand in the absence of theTenant.

HON A. MUMA

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL