Landlords to lose powers over rent

By Kenfrey Kiberenge

Your landlord will now have to give you a three-month written notice before increasing the rent, if the proposed Landlords and Tenants Bill is enacted into law.

At the same time, the revised law will cover majority of Kenyans as opposed to the old ones that addressed issues of people living in houses where rent was Sh2,500 and below.

The new law removes the ceiling leaving the discretion to the Housing minister to determine the houses to be covered. Housing Minister Soita Shitanda said the Bill had increased the ceiling to Sh16,000 but was struck off by Cabinet following arguments that unscrupulous landlords could increase their rent above Sh16,000 "to escape the laws dragnet".

Landlords will have to issue a three-month notice before raising house rent. Photo: Jacob Otieno/Standard

The Bill will herald a new beginning for ordinary Kenyans who have for many years been left at the mercy of landlords who increase rents at will.

Says the Bill: "A landlord shall not increase the rent charged to a tenant for a rented premises without giving the tenant at least ninety days notice of intention to do so."

Clear formula

Managing director of Regent Valuers International, who was involved in the drafting, says the new three-month notice is important to shield tenants. "It is okay and I totally agree with it," he told The Standard on Saturday.

The Bill outlines a clear formula that will be followed before increasing the rent, such as where the landlord has provided new services to the tenant or renovated the premises or taken into account inflationary trends in the country.

"A landlord may increase rent if the landlord has carried out or undertakes to carry out a specified capital expenditure in exchange for the rent increase, provided or undertakes to provide a new or additional service in exchange for the rent increase of taken into account inflationary trends in the economy," states the proposed law. The minister said that previously, landlords who charged above Sh2,500 were at liberty to increase the rent since the laws did not cover them.

Rent increment

In provisions that seek to discourage the haphazard increment of rent, the Bill adds that the capital expenditure is only eligible if it is necessary to protect the physical integrity of the premises, install provision of a plumbing, electrical, ventilation or air conditioning system, provide access to persons with disability, promote energy or water conservation or improve security.

At the same time, the inflation of the economy shall be based on the figures that will be provided by the Kenya National Bureau of Statistics. Presently, landlords increase rent with a short one-month notice even in instances where the house has not been renovated.

It further bars landlords from confiscating a tenant’s property for default of payment of rent, without following the legal process. Instead, it proposes that the landlord issue an eviction order and seeks the assistance of the tribunal to recoup the money, which Shitanda says shields the landlords from defaulting tenants. Currently, residents who default rent always have their property seized by the landlord as compensation.

Shitanda has defended the Bill against claims that it seeks to protect rogue tenants. "It seeks to streamline the operations of the tenants/landlord relationship. It also seeks to take into consideration the rights of each party," said Shitanda.

And if the landlord withholds some of the services that should be provided as per the tenancy agreement, the law decrees that the rent must come down. The Bill has a 12-month rule that prohibits landlords from increasing rent before a year is over since the last increase and the tenant rented the premises.

In addition, the Bill will rein in dishonest landlords, especially within the central business district, who set unjustifiable rent for their premises. The proposed law has established "fair rent" which will be determined by mutual agreement between the landlord and tenant, failure to which a government tribunal will step in and determine.

It says: "A tribunal shall determine fair rent for any premises based on the depreciated replacement cost of the premises and the market value of the land."

In downtown Nairobi, landlords are having a field day charging exorbitant rent and goodwill. In some buildings, the goodwill is as high as Sh3 million besides a monthly rent of Sh60,000.

Mr Maina Kirori, a member of the Business Premises Rent Tribunal (BPRT), says the tribunal can only watch since the current law empowers them to intervene when there is an existing tenant-landlord relationship. The goodwill is usually asked before that relationship is established.

Landlord-tenant relations

The Bill, which consolidates all laws dealing with rent matters namely Rent Restriction Act, Landlord and Tenant (shops, hotels and catering establishments) Act and the Distress for Rent Act, will regulate rents in both commercial and residential areas.

It says that when the landlord-tenant relationship becomes sour before the tenancy period expires, the owner cannot order the occupant out immediately, but must write a signed notice, complete with the reasons for terminating the tenancy.

And when the tenant refuses to vacate the house as per the notice, the owner can force them out through the tribunal. The Bill requires that the tenant gets a two-month notice.

It is also harsh on landlords who switch off lights where the electricity meter is shared to save on the power bill.

They risk a fine of Sh10,000 or spend six months in prison, or both. "No landlord shall, except with the prior consent of the tribunal, deprive any tenant of water, light, conservancy, sweeper or other service," declares the Bill.

The Bill has been drafted by the Housing Ministry and is scheduled to be debated when Parliament resumes next month.

It criminalises eviction of a tenant without the authority the tribunal as well as using crude means to indirectly force the renter to pay higher rental fee.

But according to Nairobi Central Business District Association chairman Timothy Muriuki, the Government should not come up with rental controls because it is not in-charge of supply. He argues that the state should leave the forces of demand and supply to balance the equilibrium.

Shitanda said the Bill is intended to bring some form of sanity in the sector.