- The Business Premises Rent Tribunal has put brakes on the plan by Moi Teaching & Referral Hospital Staff Pension Scheme to build a ultra modern shopping complex in Eldoret.
- The scheme wanted to evict its tenant, Fredrick Kipngetich Rono, from the one-acre piece of land to create space for the intended multi-million shilling project.
The Business Premises Rent Tribunal has put brakes on the plan by Moi Teaching & Referral Hospital Staff Pension Scheme to build a ultra modern shopping complex in Eldoret.
The scheme wanted to evict its tenant, Fredrick Kipngetich Rono, from the one-acre piece of land to create space for the intended multi-million shilling project.
It sought to terminate the lease agreement on grounds that at a board meeting held in February 2021, the scheme trustees resolved to construct the ultra modern shopping complex on the suit premises and hence the move to terminate the lease with Mr Rono.
But the tribunal, while ruling on a complaint filed by the tenant challenging the planed termination and eviction, said whatever the value of the investment put up by the tenant, there is need to preserve the same in the pendency of hearing his complaint.
In the ruling rendered by the tribunal's vice chairman, Gakuhi Chege, the tribunal said no board resolution was shown to the tribunal to prove the intention of the proposed construction of a shopping complex on the suit premises.
Mr Chege said the tenant, in challenging the planned termination, had demonstrated that he has a valid lease agreement which expires on September 30, 2022. The tenant had also demonstrated that he is in possession of the suit premises and has invested money in the suit premises and sublet to other tenants who would have been affected by any termination in the pendency of the complaint.
"The tenant has contended that the suit premises is his source of livelihood and that he has legitimate expectation to remain on the suit premises until September 30, 2022," said Mr Chege.
He further noted that the landlord, in its opposition to the application filed by Mr Rono, at one point said the tenant is in rent arrears of Sh570,000 and at another point said its Sh110,000.
The dispute started after the Landlord issued the tenant with a notice dated March 31, 2021 to terminate terms of tenancy with effect from June 30.
As a result, the tenant was threatened with eviction which precipitated the filing of the case at the tribunal.
The relationship between the parties began in September 2019 and was renewed by a fresh lease agreement for a period of three years upto September 30, 2022.
The tenant, Mr Rono, developed the said plot where he put up a number of business premises on what was initially an open space measuring approximately one acre. This was financed through a loan from a bank which the tenant was still repaying.
Mr Rono contends that he has spent about Sh20 million in construction costs which he is yet to recoup.
According to the tenant, if the Landlord was allowed to evict him and his tenants during the current hard economic times, they will suffer irreparable harm and loss which includes the substantial developments done on the suit premises before recouping the investment
The Landlord through Solomon Koros, the chairperson of the Scheme, admits existence of the Landlord/Tenant relationship with Mr Rono. He also admits issuance of notice to terminate tenancy.
The grounds upon which termination is sought is that the Landlord intends to carry out substantial works of construction and renovation which cannot be carried out without obtaining vacant possession of the premises. The project plan was attached in the replying affidavit.
According to the Landlord, no good reasons have been advanced by the tenant to oppose the notice of termination of tenancy and he has not disputed the reasons given for termination of tenancy.
The tribunal heard that the tenant is in rent arrears of Sh570,000.
The Landlord stated that the two permanent houses and toilet on the suit property belong to it and it is therefore not true that the tenant has invested over Sh20 million.
It is the Landlord's case that the tenant illegally constructed the temporary mabati structures valued at no more than Sh1 million.
Further, that the lease agreement provided that the tenant should not make alterations to the premises without the consent of the Landlord and as such any structure erected on the suit premises ought to be demolished and the tenant surrender vacant possession.
The tribunal heard that the said structures are unauthorized as no approval was sought from the County Government of Uasin Gishu.
However, Mr Rono denied being in rent arrears and undertook to continue paying rent. He said that the distress for rent action was occasioned by the Landlord’s renege on agreed 30 per cent discount during the Covid-19 pandemic lockdown.
Mr Rono stated that the structures referred to as illegal by the Landlord were constructed in the currency of the first lease but the Landlord still renewed the lease for a further term of three years.
All the developments were done with the consent of the Landlord or its agent and all approvals were obtained from the county Government of Uasin Gishu.
Mr Chege directed both parties to file and exchange witnesses’ statements and documents in support of their respective cases within 14 days.
The tenant will continue paying the reserved rent as and when the same falls due and payable, the tribunal ruled. The complaint will be mentioned on September 21.