REPUBLIC OF KENYA
BUSINESS PREMISES RENT TRIBUNAL
VIEW PARK TOWERS 7TH & 8TH FLOOR
TRIBUNAL CASE NO. 163 OF 2020 (MOMBASA)
SAMUEL NJERU DAVID...........................................................APPLICANT
VERSUS
IJARA ESTATE AGENCY LTD..........................................RESPONDENTS
ISLAM ALI INVESTMENTS LTD
JUDGMENT
1. By a tenancy notice dated 27th February 2020, the landlord seeks to increase the current monthly rent of Kshs.5000/- to Kshs.19,500/- on grounds that the same was very low and the premises were likely to fetch the said new rent in the open market.
2. The said notice was expressed to take effect on 1st May 2020 and complies with Section 4(2) of the Landlord and Tenant (Shops, Hotels and Catering establishments Act, Cap. 301.
3. The tenant filed a reference dated 29th June 2020 contending that he had been served with an illegal notice of increment of rent contrary to Cap. 301, Laws of Kenya and sought to stop the increment.
4. Both parties filed valuation reports with the landlord’s report by Maina Chege & Co. Valuers and Property Consultants recommending the fair market rent in respect of the suit premises at Kshs.19,500/- per month. The report contains 4 comparables as follows:-
(a) Hamid Jewelers situate on plot no. MSA Block XXXIX/15 which is in the same building as the suit premises attracting rent of Kshs.1,112/75 per square metre with a lettable area of 55.82m2 located at Langoni/Kericho roads junction.
(b) Promode situate on plot no. MSA/Block XXVII/107 attracting a rent of Kshs.703.80 per square metre with a lettable area of 30.78 metre squared located on Langoni Road.
(c) Shamshu Sons MSA (XXXVII/26 attracting rent of Kshs.897.06 per square metre with a lettable area of 16.72m2. It is situate along old Kilindini Road.
(d) Elyas Abdul Kader Bagha T/A Elyas Emporium situate on plot no. MSA/XXXVII/46 located along Langoni Road attracting rent of 757.58 per square metre per month with a lettable area of 23.10m2.
5. According to the landlord’s valuers, the average market rental rate from the above comparables is Kshs.867.80 for shops. The assessed rent is exclusive of services and VAT.
6. On the other hand, the tenant’s valuer’s M/S Wesco Property Consultants recommends a monthly rent of Kshs.10,000/- using 4 comparables as follows:-
(i) Plot no. MSA/Block XXX1/46 Langoni attracting a rent of 649.35 per metre squared with a lettable area of 20.0 metre squared.
(ii) Plot no. MSA/BLOCK XXX1/46 Langoni attracting a rent of 649.35 per metre squared with a lettable area of 23.10 metre squared.
(iii) Plot no. MSA/BLOCK XXXIX/13 Mackinon attracting a rent of 500.00 per M2 with a lettable area of 40.0 metre squared.
(iv) Plot no. MSA/Block XXXIX/13 Market street attracting a rent of 545.45 per metre squared with a lettable area of 40.0 metre squared.
7. According to the tenant’s valuer, the average monthly rent of the said comparables drawn from the same neighbourhood is Kshs.505.70 per metre squared. This is what was applied in arriving at the proposed rent of Kshs.10,000/-
8. The landlord’s and tenant’s valuers reports agree on the lettable area of the suit premises to be 21.06 metre squared.
9. I have decided to consider all the 8 properties used by the two valuers as comparables and have come up with an average of 733.25 per square metre as the average monthly rent in the area. This translates to Kshs.15,442/- in respect of the suit premises and I am ready to use my discretion to set the rent at Kshs.15,000/- all inclusive.
10. In the premises, the rent payable for the suit premises is Kshs.15,000/- per month which shall take effect from 1st January 2022 in view of the fact that the same is 3 fold the current rent.
11. I direct that each party meets own cost of the case.
It is so ordered.
DATED, SIGNED AND DELIVERED VIRTUALLY THIS 17TH DAY OF DECEMBER 2021.
HON. GAKUHI CHEGE
VICE CHAIR
BUSINESS PREMISES RENT TRIBUNAL
MISS ONDIEKI HOLDING BRIEF FOR OMWENGA FOR THE LANDLORD
TENANT ABSENT