Understanding the Kenyan law governing shop and stall tenants.

Landlord and Tenant (shops, Hotels and Catering Establishments) Act (Cap 301) as many may not be familiar with is an Act of parliament that governs the relationship between landlords and tenants letting owning shops, hotels and catering establishment must know. Section 4 of the Act provides that:

In summary of the above every tenant must know the following rules of the thumb in understanding what this law says about their tenancy:

1. The Act sets out tenancy standards below which voluntary agreements may not fall under.

2. The protection depends on the duration of the tenancy and the purpose for which the tenancy is created.

3. The protection accorded under the Act is for commercial premises and not residential

4. S.2(1) defines the term “controlled tenancy” as a shop, hotel or catering establishment:

a) Which has been reduced to writing;

b) Is for a period not exceeding five years; or

c) Contains a provision for termination, otherwise than for breach of covenant, within five years from the commencement thereof; or

d) Related to premises to which the Act has been extended by the Minister by notice in the Gazette.

How can a Shop or hotel owner terminate a controlled tenancy under the Act?

Controlled tenancy can only be terminated, or altered in accordance with the provisions of S.4 of the Act:

a) Landlord wishing to terminate or alter shall give notice in that behalf to the tenant in the prescribed form.

b) Tent wishing to obtain a reassessment of the rent of a controlled tenancy or the alteration of any term or condition in, or of any right or service enjoyed by him under such tenancy, shall give in that behalf notice to the landlord in the prescribed form.

c) No tenancy notice shall take effect until such date, not less than two months after receipt thereof by the receiving party. Provided that:

Date of termination shall not be earlier than the earliest date on which, but for the provisions of the Act, the tenancy would have or could have been terminated.
Where the period of notice under the Act provides for a notice period of less than two months, that period shall be substituted for the said period of two months after receipt of the notice.
The parties to the tenancy may agree in writing to any lesser period of notice.

Going by the limited nature of the Act, there a lot of issues that the law is silent on for example the aspects of goodwill that shop or stall owners pay before they take up the business space. This has left the shop and stall tenants at the risk of being exploited by the landlords and letting agent.

What every shop and stall owner must always remember is that where the law is silent then whatever is written in that lease or rental agreement he/she signed between them and the landlord will be the one used to govern their terms of renting or tenancy.

Having said that, it is important for every shop and stall tenant to read and review the rental and lease agreement thoroughly before they can sign the same.

If they are not in a place to understand the lease or specific clause please feel free to reach out to i-tenant who will help you break your lease into understandable language.

Before signing, ensure that the basic provisions of a Lease or a rental agreement include the following;

a) The rent amount, when, where and how it will be paid, security deposit amount, use and refund policy.

b) Make sure that you understand all the terms as stipulated in the agreement.

c) That the agreement covers every important detail that you may have orally discussed with your landlord and if not make sure the additional issues discussed have been written down in a letter of understanding to avoid future withdrawal by either party.

d) If while negotiating the agreement, the landlord agrees to omit a certain provision make sure you cross it out and that both of you have signed and date the changes.

e) Ensure both you and the landlord have signed the agreement at the same time and get a copy there and then to ensure that no changes can be made afterwards.

For the written leases and rental agreements to be effective and without controversy, they should be signed by the tenant and by the landlord or the landlord’s representative who in most cases is the property agent.

Witnesses to signing a lease or rental agreement are not necessary, but could be a valuable asset if one party to the agreement denies signing it.

Therefore, if you are sharing the space with a co-tenants or a roommate, both of you should sign the agreement to be equally bound by the terms of the agreement because a contravention by one roommate may lead to eviction of all of you.

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