Kenya: Salient Provisions of the Landlord and Tenant bill

The Bill also applies to business premises whose tenancies have not been reduced into writing or those which, despite having been reduced into writing, contains a provision for termination otherwise than for breach of a covenant within 5 years from the commencement thereof.

The current law on residential premises is the Rent Restriction Act which only applies to dwelling houses whose standard rent does not exceed two thousand, five hundred shillings per month. Business premises are governed under the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act as controlled tenancies which have not been reduced into writing, or, if reduced into writing, are for a period not exceeding five years or contains a provision for termination within 5 years from the commencement of the tenancy.

The Bill provides for the establishment of Tribunals by the Chief Justice under Section 4, which shall have jurisdiction in such areas as the CJ shall consider necessary. Each Tribunal comprises of a Chairperson, a Deputy Chairperson and three other members, one of whom shall have expert knowledge on matters relating to the valuation of premises. The Tribunals will have such powers as, inter alia, assessment and apportionment of rent payable in respect of any premises, fixing the amount of service charge, making orders for the recovery or possession of rent arrears and mesne profits, order landlords to make necessary repairs in their premises, reinstate a wrongfully evicted tenant, grant injunctions, and award compensation for loss suffered by either the landlord or tenant.

Rent Tribunals as formulated under Section 4 of the Rent Restriction Act are established by the Minister in charge of housing, who also appoints the chairman of each tribunal. This is also the case with the Business Premises Rent Tribunal (BPRT), which are established by the Minister in accordance with Section 11 of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act.

As per Section 7(2) of the Bill, an appeal lies from the decision of a Tribunal to the High Court only on points of law.

Section 8 of the Rent Restriction Act provides that an appeal lies from the decision of the Rent Tribunal to the Environmental and Land Court only in the case of a point of law or, where the standard rent exceeds one thousand shillings a month, on any point of mixed fact and law. The Landlord and Tenant (Shops, Hotels and Catering Establishments) Act under Section 15 also provides for appeals to the Environment and Land Court on any decision of the BPRT, which appeal shall be final and not subject to further appeal. 

Section 17 of the Bill provides that the rent payable for any premises shall be determined by mutual agreement of the parties to the tenancy agreement. A landlord cannot increase rent payable unless he/she gives the tenant at least ninety days written notice of the intention to do so, failure to which such increase shall be void. If the tenant does not oppose the notice of increase of rent within 30 days, he/she is deemed to have accepted the rent increase. A rent increase can be justified if the landlord carries out specified capital expenditure, provides a new or additional service or takes into account inflationary trends in the economy based on the Consumer Price Index. A decrease in services in the alternative warrants a decrease in rent payable. Section 20 of the Act requires that rent increases for residential premises may only be allowed after at least twelve months whereas a minimum of 24 months is required for business premises.

The 1959 Rent Restriction Act sets certain restrictions or arbitrary rent increments, but this restriction only covers dwelling houses with a standard rent of Ksh 2500 a month. A landlord who demands or accepts any rent which exceeds the standard rent commits an offence and is liable to a fine of Ksh 4000 and excess rent repaid to the tenant. Standard rent is subject to assessment by the Rent Tribunal as under Section 5 (a) of the Rent Restriction Act and if found to exceed the statutory maximum of Ksh 2500, the premises are automatically decontrolled. The Landlord and Tenant (Shops, Hotels and Catering Establishments) Act does not impose a rent cap but considers ‘rent as any sum paid as valuable consideration for the occupation of any premises.’ The Business Premises Rent Tribunal nevertheless has powers to determine or vary the rent to be payable in respect of any controlled tenancy, having regard to all the circumstances thereof;

Section 19 of the Bill requires that a notice of termination of the tenancy given by either the landlord or tenant should be in the prescribed form and should identify the premises, state the termination date and be signed by the person giving the notice or their agent. Section 25 requires a termination notice given by a landlord without reference to the Tribunal with respect to a business premises to be not less than 24 months, whilst for a residential premises, the notice should not be less than 12 months. A tenant may give notice of the termination of the tenancy at the end of the period of the tenancy which, in the case of residential premises, should be one month before the termination of the tenancy, and two months’ notice of termination in the case of a business premises.

Section 15 of the Rent Restriction Act requires that notices to quit be in writing and to be not less than one month. Section 4 of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act allows for the termination of the tenancy by giving two months’ notice.

Section 34 (2) of the Bill allows a landlord who wishes to alter any term or condition or right or service enjoyed by the tenant under a tenancy to the detriment of the tenant to give notice thereof to the tenant. A tenant who wishes to obtain a reassessment of the rent of a tenancy or the alteration of any term or condition under the tenancy may also give notice to the landlord in that respect.

Section 11 of the Rent Restriction Act permits an increase of rent by the landlord by notice only in instances where rates payable by the landlord have increased since the premises were let to the tenant. The Landlord and Tenant (Shops, Hotels and Catering Establishments) Act allows for the giving of two months’ notice with respect to the alteration of any terms and condition of the tenancy by either the landlord and tenant to the other party.

The Landlord and Tenant Bill, if passed, will repeal the Distress for Rent Act, Rent Restriction Act and the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act.

Section 66 of the Bill provides that proceedings filed under the Rent Restriction or Landlord and Tenant (Shops, Hotels and Catering Establishment) Acts shall be settled and orders made by the Tribunal in accordance with this Bill.