Case ID:185409

Diana Maisie Osano Odero v National Housing Corportion & another [2021] eKLR

Case Metadata

Case Number:

Tribunal Case 991 of 2020

Parties:

Diana Maisie Osano Odero t/a Odero & Associates Advocates v National Housing Corportion & Keysian Auctioneers

Date Delivered:

29 Oct 2021

Case Class:

Civil

Court:

Business Premises Rent Tribunal

Case Action:

Ruling

Judge(s):

Hon. P. May Vice Chair

Citation:

Diana Maisie Osano Odero v National Housing Corportion & another [2021] eKLR

Court Division:

Tribunal

County:

Nairobi

Disclaimer:

The information contained in the above segment is not part of the judicial opinion delivered by the Court. The metadata has been prepared by Kenya Law as a guide in understanding the subject of the judicial opinion. Kenya Law makes no warranties as to the comprehensiveness or accuracy of the information

REPUBLIC OF KENYA

IN THE BUSINESS PREMISES RENT TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO. 991 OF 2020

DIANA MAISIE OSANO ODERO T/A

ODERO AND ASSOCIATES ADVOCATES.....................................TENANT/APPLICANT

-VERSUS-

NATIONAL HOUSING CORPORTION.........................LANDLORD/ 1

ST

RESPONDENT

KEYSIAN AUCTIONEERS..........................................AUCTIONEER/2

ND

RESPONDENT

RULING

A.

Parties and Their Representatives

1. The Tenant/Applicant,

Diana Maisie Osano Odero T/A Odero and Associates Advocates

(hereinafter referred to as the “Tenant”)

2. The Firm of Odero & Associates Advocates represent the Tenant/Applicant. (

odero.associates@gmail.com

)

3. The Landlord/ 1

st

Respondent,

NATIONAL HOUSING CORPORATION

(hereinafter referred to as the “Landlord”) is the registered owner and Landlord of the Premises rented out to the Tenant/Applicant.

4. The 2

nd

Respondent

KEYSIAN AUCTIONEERS

(hereinafter referred to as “Auctioneer”) was authorized by the Landlord/1

st

Respondent to act for them in distressing for rent from the Tenant/Applicant.

5. The Firm of Kariuki & Kayika Advocates represent the Landlord.

(

info@kariyukikayika.co.ke

)

B.

The Background of The Dispute

6. The Tenant has been in occupation of the Landlord’s premises located at NHC House on 2

nd

Floor along Aga Khan Walk in Nairobi since the year 2014. The Tenancy offer was made through a letter of offer dated

31

st

March 2014

, and which was executed by the Tenant. The commencement date of the tenancy in the letter of offer was

1

5

th

April 2014. The Tenant avers that on the commencement date, the premises were not tenantable for use, and that the Landlord failed/ neglected to repair the premises after the Tenant made several written requests to the Landlord. The Tenant through its own undertaking made some repairs to the premises and entered the premises on

1

6

th

June 2014.

7. Subsequently, the Landlord issued the Tenant with demand for rent for the quarter commencing in

July 2014.

The Tenant in response to the demand stated that they entered the premises two months after the commencement date, and incurred their own expenses in repairing the premises, and therefore rent from the previous quarter had been partially used, and ought to be carried forward to the next quarter. The Tenant also averred that during the tenancy period, the Landlord increased the service charge unlawfully.

8.

On

4

th

December 2020

, the Landlord authorized the 2

nd

Defendant, Keysian Auctioneers to proclaim properties belonging to the Tenant in satisfaction of a total amount of

KShs. 96

5, 051.40

which was claimed by the Landlord as rent arrears that accrued for the entire period of the tenancy, since

April 2014.

The proclamation notice was to expire on

18

th

December 2020.

9.

On the

14

th

December 2020

the tenant moved this tribunal by way of reference dated

14

th

December 2020

and notice of motion under certificate of urgency filed on

14

th

December 2020

under

section 12(4) of the Landlords and Tenants (Shops, Hotels and Catering) Establishments Act Cap 301.

The tenant was seeking amongst other orders that the Tribunal be pleased to restrain the respondents from either by themselves, or by their servants, employees, agents and/or assigns from removing , attaching, impounding and/or selling the plaintiff’s goods pending the hearing and determination of the application.

10. On

14

th

December 2020

the Tribunal gave orders restraining the respondents from either by themselves, or by their servants, employees, agents and/or assigns from removing, attaching, impounding and/or selling the plaintiff’s goods pending the hearing and determination of the application.

11. On

24

th

February 2021

The Landlord filed a Notice of Preliminary Objection dated

24

th

February 2021

on grounds that this Honourable Tribunal lacks the jurisdiction to hear and determine this matter based on the provisions of

section 2(1) (a) of the Landlord Tenants (Shops, Hotels and Catering Establishments) Act Cap 301 Laws of Kenya.

The Court directed that the same be dispensed with by way of submissions.

12. On

13

th

August 2021

the Tribunal issued a ruling on the Preliminary objection and gave orders that dismissed the same and ordered that the reference and notice of motion application be set down for hearing together.

C. Jurisdiction

13. The jurisdiction of this Tribunal is not in dispute

D. The Tenant’s Claim

14. The tenant filed a reference dated

14

th

December 2020

together with a Notice of Motion application under certificate of urgency and supporting affidavit dated

14

th

December 2020

which pleadings form the basis of this claim.

15. The Tenant also annexed several correspondences between them and the Landlord where they had raised complaints on the physical condition of the premises, the date of commencement of the tenancy relationship and error in the rent arrears claimed by the Landlord, and which correspondences were not responded to by the Landlord, and therefore this Honourable Tribunal had the jurisdiction to hear and determine the matter.

16. The tenant obtained restraining orders as against the landlord on

14

th

December 2020

and to date the Landlord is still restrained from either by themselves, or by their servants, employees, agents and/or assigns from removing, attaching, impounding and/or selling the plaintiff’s goods pending the hearing and determination of the application

E. Landlord’s Claim

17. The 1st Respondent filed a replying affidavit dated

6

th

January 2021

and sworn by the General Manager of the 1

st

Respondent’s Corporation as well as a further affidavit dated

24

th

February 2021.

18. The Respondent filed a preliminary objection on

24

th

February 2021

to which the Tribunal delivered a ruling on

13

th

August 2021

.

19. Parties filed written submissions and the matter was fixed for ruling on

29

th

October 2021

.

F. List of Issues for Determination

It is the contention of this Tribunal that the issue raised for determination is as follows;

a) Determination of the commencement date of the tenancy between the landlord and the tenant

b) Whether there are rent arrears owed to the landlord and if so how much?

G. Analysis and Determination

Determination of the commencement date of the tenancy between the landlord and the tenant

20.

Having established as per the ruling delivered on

13

th

August 2021

with regards to the respondent’s preliminary objection that this Tribunal is clothed with jurisdiction, it is not in question that the relationship that exists between the landlord and the tenant is a controlled tenancy as per the provisions of

Section 2(a) of the Landlord and Tenant (Shops, Hotels and Catering Establishment) Act CAP 301 Laws of Kenya.

21. The Tribunal also established in its ruling dated

13

th

August 2021

that the respondents in their replying had only annexed one letter of offer dated

31

st

March 2014

which had lapsed. Further the letter dated

1

st

April 2020

was not duly executed and could not be deemed a valid contract due to this. As a result, there was no valid written agreement between the parties.

22. In

Section 2

of the

Landlord and Tenant (Shops, Hotels and Catering Establishment) Act CAP 301 Laws of Kenya

,

a tenancy is defined as:

“tenancy” means a tenancy created by a lease or underlease, by an agreement for a lease or underlease by a tenancy agreement or by operation of law, and includes a sub-tenancy but does not include any relationship between a mortgagor and mortgagee as such

23. In the case of

Rogan-Kamper v Robert Grosvenor No. 2 [1977] eKLR

it was stated that

“The actual tenancy created by possession and payment of rent is an unwritten tenancy, and is therefore controlled, because the definition of tenancy includes “tenancy agreements” and tenancies created by “operation of law”.

24. In this case the relationship between the landlord and the tenant qualifies as a tenancy created by operation of the law. This is by virtue of the fact that the nature and terms of the relationship have not been reduced into writing but have been provided for in law

under section 2(1) (a) of the Landlord and Tenant (Shops, Hotels and Catering Establishment) Act CAP 301 Laws of Kenya

25. From the case above it is also stated that this kind of a tenancy is created through the conduct of the parties by creating possession as well as payment of rent.

26. From the lapsed letter of offer dated

31

st

March 2014

the respondents had provided the date of commencement of the agreement as

15

th

April 2014

however the tenant in their supporting affidavit stated that at that time the premises were not tenantable and it was upon the 1

st

respondent to carry out the necessary repairs to make the premises tenantable

27. From the correspondences attached by the tenant in their application it is noteworthy that the tenant made efforts to inform the 1

st

respondent of the condition of the premises and the need for repairs of the same which the respondents have not disputed

28. The 1

st

respondent avers that the tenancy commenced on

15

th

April 2014

as per the letter of offer while the Tenant contends that the tenancy commenced when they took possession of the premises on

16

th

June 2014

after conducting repairs to make the premises tenantable.

29. The element of possession and payment of rent are both essential in determining the commencement date of the tenancy. In this case the two requirements occurred at different times whereby the tenant made payment for the first quarter’s rent and service charge as well as security deposit legal cost deposit and VAT on

2

nd

April 2014

but did not move into the premises until

16

th

June 2014.

30. The tenant alleges that the aspect of the premises not being tenantable is what prevented them from taking possession of the premises on the agreed commencement date. The tenant in their letter to the 1

st

respondent dated

21

st

October 2014

informed the Respondent of the necessary repairs to the floor as well as requested for authority to undertake the repairs after which the amounts that they would incur would be offset from the rent.

31. It is evident that failure by the landlord to carry out the necessary repairs is what delayed the entry of the tenant into the premises.as a result it is the contention of this Tribunal that the commencement should be from the time when the tenant took possession of the premises which was

16

th

June 2014.

32. Any rental obligations owed to the landlord should be deemed to have started accruing from the said date and not from the commencement date provided in the letter of offer,

15

th

April 2014.

Whether the service charge and rent by the landlord was lawful?

33.

On

18

th

June 2020

the 1

st

Respondent wrote a letter to the tenant informing them that they had conducted an audit of the service charge for the years ended

30

th

June 2016

and

30

th

June 2017

and from the report the tenant had to pay

Kshs. 88,241

which amount was debited to the account of each tenant. The amount was to be paid with effect from

1

st

July 2020.

34. In the tenants written submissions they also state that they received an invoice in

August 2020

with the words,

“Gross Additional Rent 200,202/20 VAT on Add Rent 24,850/20”

to which they responded to through the annexed letter dated

26

th

August 2020

and informed the landlord that the increase had no basis in law.

35.

Section 4 (2) of the Landlords and Tenants (Shops, Hotels and Catering) Establishments Act Cap 301 Laws of Kenya

provides that

A landlord who wishes to terminate a controlled tenancy, or to alter, to the detriment of the tenant, any term or condition in, or right or service enjoyed by the tenant under, such a tenancy, shall give notice in that behalf to the tenant in the prescribed form.

36.

By requiring the tenant to pay an increased amount on the usual service charge as well as increasing the rent the landlord was altering the terms of the tenancy to the detriment of the tenant

as per the provisions of

section 4(2) of the Landlords and Tenants (Shops, Hotels and Catering) Establishments Act Cap 301 Laws of Kenya.

The Act requires that the landlord send a notice to the tenant before making such alterations.

37.

Based on the foregoing, I find that the alterations in the rent and service charge amounts

did not meet the requirements under the Act since they required the tenant to comply within less than the stipulated period of two months.

H.

Orders

a) The upshot is that the tenant’s reference dated

14

th

December 2020

and application dated

14

th

December 2020

are upheld under the following terms;

b) Landlord to prepare a revised statement of accounts from the month of

June 2014

and not

April 2014

up to the current quarter for any arrears owed at the normal agreed rent and service charge rates and issue the same to the tenant within 14 days.

c) Tenant to make a proposal in 7 days after receipt of the revised statement of accounts on how they intend to offset the arrears and landlord to respond in 7 days.

d) Matter to be mentioned in the next 30 days to make a finding on rent arrears and Instalments amount per month.

e) Tenant to keep paying rent at the rate of

Kshs 131,040/-

and service charge of

Kshs. 40,320/-

payable quarterly as per the agreement.in default of which the landlord is at liberty to distress.

f) Each party shall bear their own costs.

HON A. MUMA

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL

RULING DATED, SIGNED AND DELIVERED VIRTUALLY BY HON P. MAY THIS 29TH DAY OF OCTOBER, 2021 IN THE ABSENCE OF THE PARTIES.

HON P. MAY

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL