The Sunbird Lodge in Elementaita on the Nakuru-Nairobi highway has been closed.
Lodge director Richard Corcoran in a statement dated April 15 said the closure was due to a judgment in which a 99-year lease was declared invalid.
He said an appeal was submitted and approved but the landowner obtained an eviction order pending the appeal.
"It is with great sorrow, regret, and a heavy heart that I inform you that Sunbird Lodge as we know it will close for good today. We are investigating a number of possibilities in the area to redeploy our assets and we will keep the industry informed," Corcoran said.
He informed Travel Trade Partners that the situation he termed terrible has no effect on Secluded Africa's other properties.
"Secluded Africa continues to grow from strength to strength and whilst this is a draw-back and huge disappointment, each property is financially independent and all remain unaffected," Corcoran said.
He added that their staff in the Nairobi office will be happy to assist in securing an alternative accommodation for bookings registered at Sunbird Lodge.
Sunbird Lodge Limited approached Joseph Ng'era in 2005 with a request to be leased land to develop a lodge and entered an agreement in 2007. Ng'era was to contribute the land while Sunbird Lodge was to contribute the cost of construction.
The cost of land was deemed to be 40 per cent while that of the construction was to amount to 60 per cent of the investment. Upon the recovery of the investment cost in the land, Ng'era, the agreement indicated, would be entitled to the 40 per cent levy on the net profits.
Ng'era said that to enable the lodge to recoup the capital investment it was agreed that for a period of five years, Sunbird was to take all the profits but was to pay him a token per bed per night.
He says Sunbird ran the business without involving him as agreed. The five-year initial period provided for in the agreement, he said, had already expired and it was time he was involved in the running of the business.
Ng'era said the lease giving rights to the lodge was nullity as it was not registered as required.
The late Ng'era said in a bid to conceal income from the business, Sunbird refused to cooperate with him and as such he could not apply for Land Control Board consent and or apply for change or extension of the user from agricultural to commercial.
Ng'era who passed on midway through the hearing of the case initiated a suit at the Environment and Lands Court in Nakuru, citing a breach of contract by Sunbird.
He wanted the court to issue a declaration that the lease agreement was nullity for lack of consent of the Land Control Board and non-registration. Ng'era then sought an order of eviction against the lodge. He also wanted in the alternative the court order that the Lodge was a joint venture.
He also wanted the court to issue a declaration that he was entitled to 40 per cent of the net income from the lodge business from 2010. Ng'era said he remains the registered owner of the land where the lodge was situated.
Sunbird admitted the land was registered in the name of Ng'era but disputed that it was a joint venture. They said Ng'era remained a landlord who has been receiving rent.
Justice Mwangi Njoroge said the lease between the parties became void for all purposes at the expiry of six months from the date of execution for reasons that no land control board consent had been obtained.