REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

VIEW PARK TOWERS 7^TH & 8^TH FLOOR

TRIBUNAL CASE NO. 986  OF 2019  (NAIROBI)

DERRICK JAMES KIMANI............................................TENANT/APPLICANT

VERSUS

KIONGA INVESTMENTS COMPANY.........LANDLORD/1^ST RESPONDENT

JANE NJOKI GICHURE................................LANDLORD/2^ND RESPONDENT

RULING

1.  The tenant herein filed a motion dated 4^th October 2019 seeking various reliefs.  Among the reliefs sought is an order to restrain the Respondents from interfering with the tenant’s peaceful possession and occupation of the business premises known as shop no. 5 Golden Mile Complex situate on L.R No. 209/4381, Ramesh Gautama Road, Ngara, Nairobi pending the hearing and determination of this cause.

2.  He further seeks for an order that he continues paying the agreed rent of Kshs.55,000/- to the landlord pending hearing and determination of the cause.

3.  It is not in dispute that the tenant entered into a lease agreement dated 20^th October 2015 with the 1^st Respondent for a period of 3 years at an agreed monthly rent of Kshs.55,000/-.

4.  The tenant deposes that he paid a deposit of Kshs.500,000/- on 21/10/2025 as a down payment to show commitment that he had the resources to take over the premises and renovate the same.

5.  He thereafter took possession and converted the premises into a carpentry and woodwork workshop from the previous use of a Bar and Restaurant.

6.  He started paying the agreed rent of Kshs.55,000/- but from April 2019, the tenant deposes that the 2^nd Respondent has been unlawfully coercing him into paying rent of Kshs.60,000/- every month by locking the premises and claiming the extra Kshs.5,000/- despite holding a deposit of Kshs.500,000/- since 2015.

7.  It is the tenant’s case that the illegal harassment by the 2^nd Respondent has put him into serious financial strain on account of excessive rent and extortion of Kshs.5,000/- every month which has brought the business to its knees.

8.  As a result of frequent disruptions of business through illegal closure, the customers are affected when they find the workshop closed and furniture not ready.

9.  The tenant complains of denial of access to clean and proper working toilets with running water resulting into a pungent smell of urine and fecal matter emanating therefrom.

10.  The landlord is said to have denied the tenant access to his deposit of Kshs.500,000/- or to apply it against rent despite the harsh economic times when his business is struggling.

11.  The tenant deposes that the sum of Kshs.500,000/-  alleged by the 2^nd Respondent to be goodwill  was not provided for in the tenancy agreement signed by her late husband on behalf of the 1^st Respondent.  The tenant states that he was threatened with eviction on account of refusal to sign a new lease that does not capture the sum of Kshs.500,000/- deposit.

12.  According to the tenant, no goodwill was payable as he was to do a different business from the one previously carried out in the premises and the sum of Kshs.500,000/- was a deposit meant to be used whenever the business would struggle to meet the rent.  The business would be his sole source of livelihood after leaving Stanbic Bank employment in 2017.

13.  The tenant therefore came to this Tribunal complaining that the Respondents were using extra ordinary means to forcibly increase rent and to deprive him of his deposit without any consideration for his plight.  He therefore seeks for refund of the said deposit or the same be applied towards rent.  In the alternative, he seeks that the deposit be refunded to enable him vacate the premises, if need be.

14.  He finally deposes that the rent payable  for the suit premises is excessively high for the location and wishes to obtain a reassessment of the rent payable for the same.

15.  The 2^nd Respondent swore and filed a replying affidavit on 12^th November 2019 admitting existence of the tenancy agreement dated 20^th October 2015.  A deposit of Kshs.50,000/- was paid as per the agreement but denies that Kshs.500,000/- was paid for any purpose and in any case was not captured in the tenancy agreement nor acknowledged by the landlord.

16.  The Respondent therefore deposes that the introduction of the said claim was fraudulently intended to deny it rent.  The tenancy agreement stipulated the rent payable and its escalation rate and that the current rent is Kshs.60,000/- for the last 6 months.

17.  The 2^nd Respondent denies ever closing the tenant’s business premises on any occasion or for any reason which explains why no evidence is displayed.

18.  The tenant was requested to sign a new lease agreement but refused to do so and has not been paying rent as required.  The landlord denies failing to maintain the premises and states that no other tenant complains about it.

19.  A notice to produce dated 15/12/2019 was served in respect of certified bank statement of the landlord’s account no. 0130262348026, Equity Bank Limited for the period between 20^th October 2015 and 20^th March 2016.

20.  In a supplementary affidavit sworn on 15^th December 2019, he has annexed a certified copy of bank statement evidencing proof of swift transfer.

21.  The tenant maintains that he has been paying Kshs.55,000/- as monthly rent except from April 2019 when the 2^nd Respondent started coercing him to pay Kshs.60,000/- by locking the premises claiming he had a balance of Kshs.5000/-.

22.  The tenant filed another affidavit sworn on 14^th June 2021 annexing a copy of Gazette notice dated 9^th April 2021 showing that the 2^nd Respondent had instituted succession proceedings in respect of her deceased husband one James Gichure Kionga who died on 19^th July 2019.  This according to the tenant is intended to show that the 2^nd Respondent has access to her deceased husband’s account where the sum of Kshs.500,000/- was deposited as down payment of rent as well as commitment that the tenant had resources to take over the premises and renovate the same.

23.  Both counsels filed submissions as directed by the Tribunal and I shall consider the same while addressing the issues arising from the pleadings.

24.  Based on the pleadings, the following issues have been identified for determination:-

(a) Whether the tenant paid a sum of Kshs.500,000/- towards rent deposit for the suit premises.

(b) What is the monthly rent payable for the suit premises?

(c) Is the tenant entitled to the reliefs sought in the application?

(d) Who is liable to pay costs of the application?.

25.  It is not in dispute that the tenant and the 1^st Respondent entered into a tenancy agreement dated 20^th October 2015 in respect of the suit premises.  The agreed monthly rent was Kshs.55,000/- payable on or before 5^th of every month.

26.  Clause 3 of the said agreement marked ‘DJK1’ provided that the tenant would “pay Kshs.50,000/- one month deposit be held by landlord as deposit for premises security over lease period which is refundable upon landlord/his agents approves demised premises structural condition as per initial state, whereby the deposit meets necessary repair costs and the balance paid to the moving out tenant by landlord next end month”.

27.  The lease was to commence on 1^st November 2015.  Rent according to clause 8 of the tenancy agreement was to escalate at a rate of 10% every 2 years within the lease period.  The initial increment according to the agreement was with effect “from January 2016 to 55000/-‘’.

28.  It is clear from the agreement that there was no mention of the payment of Kshs.500,000/- claimed by the tenant.  The tenant claims to have paid the said amount into the account of the late James Gichure Kionga who was the husband of 2^nd Respondent on 21/10/2015 in terms of annexture “DJK1” attached to the supplementary affidavit of the tenant sworn on 15^th December 2019.

29.  No other evidence has been tendered to contradict the contents of the said deposit evidence and I have no doubt that the same was a down payment of rent since the tenancy agreement provides for payment of Kshs.50,000/- as one month deposit whereas the payment made is Kshs.500,000/- one day after execution of the agreement.  This creates ambiguity in the written agreement thereby requiring secondary evidence to be adduced under section 98 of the Evidence Act which provides for parol evidence to contradict, vary, add to or subtract from its terms.

30.  Since the 2^nd Respondent’s husband is deceased, I have  no other person except the tenant to explain the payment of the sum of Kshs.500,000/-.  I find and hold that the said amount was a rent deposit and that the tenancy agreement has an ambiguity in that regard.

31.  In regard to the monthly rent payable in respect of the suit premises, the agreement provides that a sum of Kshs.55,000/- was payable every month and the same was to escalate by 10% after every two years within the lease period.  The lease was for 3 years according to clause 1 of the agreement and expired on 31^st October 2018.

32.  As the Tenant did not vacate from the suit premises, this created a periodic tenancy under section 60(2) of the Land Act, 2012.  By the time the lease expired, the agreed escalation of 10% had already taken effect on 1^st November 2017 thereby increasing rent to Kshs.60,500/- from that date.

33.  In the premises, I find and hold that the rent payable in respect of the suit premises is Kshs.60,500/- from 1^st November 2017.

34.  The next issue is whether the tenant is entitled to the orders sought in the application.  I have already found that the rent payable for the suit premises is Kshs.60,500/- with effect from 1^st November 2017 and as such prayer 3 of the application fails.

35.  I am however convinced that the tenant is entitled to peaceful enjoyment of the suit premises by continuing to pay Kshs.60,500/- to the landlord.  Any arrears so far incurred (if at all) shall be based on the determined rent.

36.  As the sum of Kshs.500,000/- deposited into the account  of the 2^nd Respondent’s late husband was security for occupation of the premises,  I find and hold that the same is only recoverable upon the tenant surrendering vacant possession and restoring the suit premises back to the initial state in terms of clause 3 of the tenancy agreement.  It cannot be converted into rent or defrayed against rent arrears.

37.  In this regard, I am fortified by the decision in the case of Dr. Koisagat Tea Estate Ltd – vs. Eritrea Orthodox Tewdo Church Ltd (2015) eKLR wherein the case of National Bank of Kenya Ltd – vs- Pipe Plastic Sarkolit (k) Ltd & Another CA 95/99 was cited as follows:-

“A court of Law cannot rewrite a contract with regard to interest as the parties are bound by the terms of their contract unless coercion, fraud or undue influence are pleaded”.

38.  In the premises, the following orders commend to me in this matter:-

(a) The tenant shall be entitled to continue enjoying peaceful and quiet possession of the demised premises being shop no. 5, Golden Mile complex situate on L.R NO. 209/4381, Ramesh Gautama Road, Ngara Nairobi.

(b) The landlord is entitled to receive Kshs.60,500/- being monthly rent for the demised premises with effect from 1^st November 2017.

(c) The tenant shall be entitled to a refund of Kshs.500,000/- upon termination of the tenancy subject to restoration of the demised premises back into its initial state in terms of clause 3 of the tenancy agreement dated 20^th October 2015 failing which the landlord shall use the same to do repairs and any balance arising therefrom shall be paid to the tenant.

(d) As all the issues raised in the Reference have been addressed through this ruling, the same is marked as compromised and settled.

(e) Each party shall bear own costs of the Reference.

It is so ordered.

DATED, SIGNED & DELIVERED THIS 12^TH DAY OF NOVEMBER 2021 VIRTUALLY.

HON. GAKUHI CHEGE

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL

Ruling delivered in the absence of parties.