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ELCDismissedEnvironment and Land Court Appeal arising from Business Premises Rent Tribunal Number 40 of 2017· [2021] KEELC 1070 (KLR)

NV Lunar Park Mamba Village v Beatrice Muriithi t/a Redrock Pizzera [2021] KEELC 1070 (KLR)

Environment and Land Court
9 November 2021
2,370 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Mombasa court ruled that Kenyan landlords who lock out tenants without proper notice lose their claims and must refund deposits.

What this practically means

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Executive summary

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NV Lunar Park Mamba Village (landlord) appealed to the Environment and Land Court at Mombasa against the judgment of the Chairman of the Business Premises Rent Tribunal, Honourable Mr. Mbichi Mboroki, delivered on 16th November 2018 in BPRT No. 40 of 2017, which ordered the landlord to refund the tenant, Beatrice Muriithi T/A Red Rock Pizzeria, Kshs.250,000/= paid at the commencement of the tenancy and to pay costs of the reference assessed at Kshs.50,000/=. The landlord advanced thirteen grounds, contending that the payment was for renovations, that the tenant remained liable for rent, service charge and electricity arrears totalling Kshs.800,000/= for sixteen months until vacant possession was handed over on 14th November 2018, and that the costs award was excessive. The respondent maintained the payment was refundable goodwill, that the landlord's locking of the premises in March 2017 was unlawful, and that the electricity and service charges were unilaterally levied. The court, N.A. Matheka J, concurred that the unwritten tenancy was a controlled tenancy under section 2(1) of Cap 301, obliging the landlord to follow sections 4(1), (2), (4) and (5) before terminating or altering it. The arrears claim failed as the sums were unproven and the landlord had locked out the tenant without notice. The Kshs.250,000/= was treated as a refundable deposit since no evidence showed it was used for renovations. The costs assessment was undisturbed as no error was demonstrated. The appeal was dismissed with costs to the respondent.

Key legal issues

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01

Whether the tenancy was a controlled tenancy

Holding

The court concurred with the Tribunal that the oral tenancy was a controlled tenancy under section 2(1) of Cap 301

Reasoning

The tenancy was never reduced into writing. Section 2(1) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act defines a controlled tenancy to include one which has not been reduced into writing. The Tribunal had so held in its ruling of 27th July 2018 and the court agreed with that finding, which obliged the landlord to follow the statutory termination procedure.

p. 3
02

Whether the landlord could claim rent, service charge and electricity arrears

Holding

The claim failed; the landlord had locked out the tenant without the statutory notice, and the service charge and electricity figures were unproven

Reasoning

The agreement being oral, it was difficult to determine what was payable as service charge and electricity; the charges were also said to be unilaterally levied. The landlord had locked the premises and denied the tenant entry without notice to vacate, having initiated no legal process to alter or terminate the controlled tenancy, so the tenant was entitled to quiet enjoyment.

p. 3
03

Whether the refund of Kshs.250,000/= was justified

Holding

The Tribunal's order was upheld; the appellant did not prove the money was for renovations, so it was a refundable deposit

Reasoning

The appellant claimed the Kshs.250,000/= was used to partition the space but adduced no evidence. The respondent maintained it was goodwill, relying on section 12(1)(l) of the Act empowering the Tribunal to award compensation on termination of a controlled tenancy in respect of goodwill, and adduced documentary proof of her own renovations.

p. 3
04

Whether the costs assessment of Kshs.50,000/= should be disturbed

Holding

The assessment was left undisturbed as no error was demonstrated

Reasoning

The appellant did not identify the error made by the Chairman nor propose a correct amount nor cite any contradicting law. The court could not interfere with the Chairman's exercise of discretion absent demonstration of error or unfairness.

p. 4

Legal principles established

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  • Where a tenancy is a controlled tenancy, a landlord must comply with the termination and alteration prerequisites in sections 4(1), (2), (4) and (5) of Cap 301
  • In the absence of evidence that a sum paid at the commencement of a tenancy was for a specific purpose (e.g. renovation), it is treated as a refundable deposit

Court orders

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  1. 1.The appeal is dismissed
  2. 2.Costs of the appeal to the Respondent
  3. 3.The Tribunal's orders of 16th November 2018 (refund of Kshs.250,000/= and costs of the reference assessed at Kshs.50,000/=) stand

Authorities

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Legislation

  • Landlord and Tenant (Shops, Hotels and Catering Establishments) Act (Cap 301)Section 2(1) (definition of controlled tenancy)
  • Landlord and Tenant (Shops, Hotels and Catering Establishments) Act (Cap 301)Section 4(1), (2), (4) and (5)
  • Landlord and Tenant (Shops, Hotels and Catering Establishments) Act (Cap 301)Section 12(1)(l) (tribunal's power to award compensation for goodwill)
  • Landlord and Tenant (Shops, Hotels and Catering Establishments) Act (Cap 301)Section 14(1) (execution)

Cases cited (2)

  • Alfred Kihoro v Joseph Gitau Gacheru & Another
    (2017) eKLR
  • Raichand Khimji & Co. vs Attorney General
    (1997) EA. 536
On appeal from
Business Premises Rent Tribunal
Business Premises Rent Tribunal Number 40 of 2017 (Beatrice Muriithi T/a Red Rock Pizzeria v NV Lunar Park Mamba Village)
Jurisdiction invoked
Appeal from the Business Premises Rent Tribunal under the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act (Cap 301)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "NV Lunar Park Mamba Village v Beatrice Muriithi t/a Redrock Pizzera [2021] KEELC 1070 (KLR)", Case Analysis (2021). Environment and Land Court Appeal arising from Business Premises Rent Tribunal Number 40 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/1070/eng@2021-11-09

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.