News and Analysis
November 21, 2024
Following the highly publicised and heartbreaking evictions over non-payment of rent during the pandemic, the National Assembly is in the process of approving a Bill that is aimed at levelling the playing field when it comes to landlord-tenant relationships.
The current laws that the Landlord and Tenant Bill 2021 seeks to repeal were enacted as early as the 1950s, and have been often tagged as archaic, as cases of harassment and non-refunding of deposits are countless.
This begs the question, why do tenants choose to stay under such circumstances? Do most tenants even know their rights under the current Landlord-Tenant laws?
Information is key, which is why we will take a deep dive into the current laws concerning tenants and landlords, proposed changes of this particular law, tenant rights, as well as a few tips on what to look out for in tenancy agreements at the very end.
In Kenya, controlled tenancy applies to two types of property uses: residential and commercial.
The Rent Restriction Act (RRA) applies to residential users, while the Landlord and Tenant (Shops, Hotels, and Catering Establishments) Act applies to commercial users.
The RRA came into force in the year 1959, while The Landlord and Tenant Act came into force six years later.
Some of the key clauses under the current laws governing tenants and Landlords are detailed below.
Kenya has a Distress for Rent Act. It is the law that gives property owners the mandate to seize or cause a seizure of goods from a tenant that owes rent.
Under the current law, if you are in arrears of more than a month, your landlord will use this act to try and sell your goods to recover the money owed. In this case, a property owner does not have to seek a court order to recover rent.
However, the law requires landlords to use licensed auctioneers to conduct the process.
Currently, a landlord cannot increase your house’s rent without notice unless stated in a tenancy agreement. Typically, such increments happen when a person is renewing their lease agreement.
The law states that a tenant must receive a formal letter clearly indicating when the landlord will increase rent.
The letter or written notice must give one at least one month's notice of the intended hike in rent, with the landlord currently not obliged to give a reason for increment.
On the other hand, tenants still have the right to object to an increment, as the law provides a 30-day window in which one can make a formal objection to the planned changes in rental demand.
The Urban Tenants Association is one of the legal bodies one can use to lodge rental increment objections.
Prior to occupancy, tenants normally pay a month’s or so rent in advance as security deposit. The deposit is refunded if the property is returned in its original condition at the end of the contract.
However, countless testimonies reveal that the deposit held as security is rarely refunded.
As it stands, the duration for a refund of rent deposit depends on what is stated on the tenancy agreement.
The terms set out in the tenancy agreement are legally binding which means you must always read or have a competent person go through your tenancy agreement before signing it.
In some cases, it is usually within 30 days following the end of a lease agreement. Should one move before the end of the agreement, the landlord can wait until the expiry of the lease before refunding the deposit.
It is important to understand that the landlord is also protected. There are situations where you will not get back the full amount. These include:
• Non-payment of rent
• Damage to the property
• Unpaid utilities such as electricity and water
The Landlord and Tenant Bill dated February 12, 2021 was introduced at the National Assembly with the aim of consolidating the laws relating to the renting of business and residential premises.
There are several proposed changes worth noting detailed below:-
The rent payable will be agreed upon by both parties. If there is no mutual agreement, a tribunal will determine the rent based on comparable premises in the area.
Section 18 of the Bill outlines the permitted procedure that the landlord must follow in order to increase the tenant's rent.
A rent increase must be justified by one of the following factors:
• The landlord incurring a capital expenditure
• Economic inflation effect
• For the provision of an additional service to the premises
• Where land rates payable increases or becomes chargeable
In the proposed changes, the landlord must give the tenant written notice of their intention to raise the rent at least 90 days in advance. Failure to do so invalidates the rent increase.
Also, if a tenant does not object to the increase within 30 days of receiving it, they are deemed to have accepted it.
Under the proposal, landlords may raise the rent once every 12 months when it comes to residential properties, and once every 24 months for commercial properties.
The landlord may also reduce rent if they cease to provide any of the prescribed services to the tenant. The decrease must be proportional to the reduction in services provided.
The Bill requires the landlord to give the tenant written notice of their intention to terminate the tenancy agreement.
This notice must:
• Provide the termination date
• Be signed by the landlord or their agent
• Provide the cause(s) for termination.
The notice period for commercial tenancies is 24 months, while for residential tenancies it is 12 months.
The tenant may also terminate the tenancy by giving the landlord notice at least one month before the end of the term for residential tenancies, and at least two months before the end of a commercial tenancy.
Under Sections 28 and 29, the landlord may terminate the tenancy if they require possession of the premises for their own occupation, intend to demolish the premises, convert the use of the property, or carry out extensive renovations on the property.
In such a scenario, the landlord is to issue a notice to the tenant specifying these reasons for termination: at least 60 days after the date of the notice (where the landlord intends to occupy the premises); and at least 120 days (where they are carrying out works or changing the user of the property).
Additionally, the Landlord and Tenant Bill 2021, permits landlords to give tenants just one month's notice to vacate their premises in case of failure to pay rent.
This means that a landlord would have the right to evict a tenant who fails to pay rent for just one month.
However, a landlord will not be permitted to seize a tenant's property without legal process if the tenant fails to pay rent or breaches any other obligation.
“No landlord shall, without legal process, seize a tenant’s property for default in the payment of rent or for the breach of any other obligation of the tenant,” reads an excerpt from the Bill.
The new law also addresses any conflicts that may arise involving a defaulting tenant. If passed, landlords will be prohibited from changing locks, installing deadbolts, removing doors, or doing anything else to prevent defaulting tenants from accessing their homes.
They will also not be allowed to shut off utilities in an effort to push tenants to pay their dues.
“No landlord shall, without legal process, seize a tenant’s property for default in the payment of rent or for the breach of any other obligation of the tenant,” the proposed law states.
The committee has proposed that prior to any deductions from security deposits, departing tenants must be given receipts for any repairs undertaken.
“A landlord shall provide a tenant with receipts for reasonable expenses incurred for repairing premises that the landlord proposes to deduct from any security deposit held,” the proposal reads in part.
Under current law, the Rent Tribunal and the Business Premises Rent Tribunal have the jurisdiction to decide on disputes surrounding tenancies. These tribunals were established by the Cabinet Secretary Trade, Industrialization and Enterprise Development.
However, under the new proposal, the power to create these tribunals would move to the office of the Chief Justice.
Such tribunals would then be empowered to grant injunctions, enforce its own orders and punish for contempt as any court of law.
Also, the tribunals are required to determine disputes within three months from the date in which the dispute was lodged.
Overall, the introduction of the Bill is a welcome improvement because it promises ease of access to tenancy laws in Kenya. Furthermore, the tribunals' expanded powers would facilitate and expedite access to justice in cases of dispute.
By the time of publishing, The Landlord and Tenant Bill 2021 (Bill) has since been passed by the National Assembly and is currently being considered by the Senate.
Most tenants are usually unaware of their rights which often results in them being taken advantage of and harassed by their landlords.
A good number of Nairobi residents usually choose to stay and ‘suffer’ due to the scarcity of good quality and affordable houses in the city.
Below are the basic rights you need to know as a tenant when moving into a house anywhere in Kenya.
Regardless of how stressful it has been to find your dream home, you should never enter into a legally binding contract lightly. It is important to take your time and address any concerns or questions before signing on any dotted line.
So here’s a simple checklist to go through when looking to rent a house:
Background check on the Landlord/Agency: It is always prudent to run a thorough background check on the landlord to ensure the property is his, or is a legitimate agent who has been contracted by the owner to lease the property on his behalf.
Renovations: Apart from commercial properties, most leases do not agree on renovations in the property. If they do agree on house renovations, one must know who will pay for them and the specific terms of the renovations.
Special clauses: Go through this with a fine comb, or seek expert counsel if needed. Is the landlord, for example, strict about pets or smoking in their rental properties?
Deposit: The tenancy agreement should detail scenarios in which a deposit can be partly or wholly withheld (i.e. repair the damage you've caused during the tenancy). One needs to understand this prior to signing.
Decorations and minor repairs: A proper tenancy tenancy agreement should outline this in detail. In some cases, landlords will allow tenants to do their own DIY; in others, they will prefer to do it themselves or have the letting agent or property management company arrange repairs for them.
Subletting: Subletting is a frequently grey area in the world of tenancies. The tenancy agreement should state whether or not one is permitted to sublet the rental. Once again, this is a very personal decision for each landlord.
Giving notice: The tenancy agreement should also specify how much notice one must provide if they wish to terminate the tenancy. Unless the landlord agrees to end the tenancy early or there is a break clause in the tenancy agreement, a tenant is usually obligated to pay rent for the duration of their stay.
This is yet another reason to carefully read through a tenancy agreement in order to understand one’s rights and obligations.
In case of any questions about the terms of the tenancy agreement, contacting the letting agent or landlord is highly recommended.
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