Case Analysis on following legal procedures in tenancy disputes: The Case of Orchards Communications Limited v Suitable Hotels Limited (Tribunal Case E247 of 2023) [2024] KEBPRT 524 (KLR) (21 March 2024)

Case Overview

In this ruling, the Business Premises Rent Tribunal (BPRT) addressed an application by Suitable Hotels Limited (the "Landlord") seeking orders for the attachment of Orchards Communications Limited's (the "Tenant") property due to unpaid rent arrears amounting to Kshs. 3,561,037. The Landlord also sought eviction of the Tenant following the attachment.

Tribunal's Findings

1. Non-Compliance with Statutory Termination Procedures

The Tribunal emphasized that under Section 4(2) of the Landlord and Tenant (Shops, Hotels, and Catering Establishments) Act (Cap 301), a landlord wishing to terminate a controlled tenancy must issue a termination notice in the prescribed form. The Landlord failed to demonstrate compliance with this requirement, rendering the eviction application premature and legally untenable.

2. Rent Arrears and Payment Plan

The Tribunal acknowledged the Tenant's outstanding rent arrears of Kshs. 1,135,016.98. Considering the Tenant's financial situation, the Tribunal ordered that the arrears be cleared in three equal monthly installments, commencing in April 2024. Failure to adhere to this payment plan would grant the Landlord the liberty to levy distress for rent using a licensed auctioneer.

3. Costs of the Application

The Tribunal directed that the Tenant bear the costs of the application, reinforcing the principle that parties failing to meet their financial obligations may be held responsible for associated legal costs.

 

Legal Implications

• Statutory Compliance: The ruling underscores the necessity for landlords to adhere to statutory procedures when seeking to terminate a controlled tenancy.
• Payment Arrangements: The Tribunal's decision to allow a structured payment plan reflects a balanced approach, considering both the Tenant's obligations and financial capacity.
• Cost Allocation: The imposition of costs on the Tenant serves as a deterrent against non-payment and encourages adherence to legal obligations.

Conclusion

The Tribunal's ruling in this case highlights the importance of following legal procedures in tenancy disputes. While landlords are entitled to seek remedies for unpaid rent, they must ensure compliance with statutory requirements to avoid invalidation of their claims. Similarly, tenants are reminded of their obligations to meet rental payments promptly to avoid legal consequences.