The Rent Restriction Tribunal

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UNIVERSITY OF NAIROBI

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THE RENT RESTRICTION TRIBUNAL

The Declaration of Human Rights recognizes everyones right to a standard of living adequatefor the health and well-being of himself and of his family including.... housing and the necessarysocial services and the right to social security even in the event of...lack of livelihood in

circumstances beyond his control. 1 Adequate living premises entails more than having a roofover ones head . Such premises must consist of basic facilities, be secure and affordable for thelarger population. The right to a standard living is a derivative of the right to life and cantherefore not be underhanded or ignored. 2 These provision and concerns could be said to havebeen the basis for the establishment of certain Acts of parliament that govern the Housingsector including The Rent Restriction Act of Kenya 3, the Distress for Rent Act 4 and the Landlordand Tenants Act 5.

The Rent Restriction Act, which became operational in 01/10/1959, provides for the

establishment of Rent Tribunals by the Minister6, by notice in the Gazette, having jurisdictions

in such areas as he may think fit. 7The Act was intended to restrict the increase of rent, restrictthe right to possession, restrict execution of premiums and fix standard rents. The Tribunalprovides a platform through which provisions of the Act are effected. In this light, the RentRestriction Act forms the basis of the Rent Restriction Tribunal and would form a large part ofthis discussion.

COMPOSITION AND STRUCTURE OF THE TRIBUNAL

The Rent Tribunal Department has the following sections that ensure the competent running ofthe body:

1) The General Administration: harmonizes and co-ordinates the operation of othersections

1 Article 25 ;Universal Declaration of Human Rights, G.A. res. 217A (III), U.N. Doc A/810 at 71(1948)2 Governing Informal Settlements: On Whose Terms Charles A. Khamala: Lecturer KabarakUniversity School of Law, Ph. D. Candidate in Law (Criminal Sciences) (Universit de Pau et des

Pays de l'Adour) LL.M. (London) LL. B. (Nairobi); Advocate of the High Court of Kenya,[email protected]

3 CAP 296, Laws of Kenya4 CAP 293, Laws of Kenya5 CAP 301, Laws of Kenya 6 In the current context, this is the Cabinet Secretary of Lands, Housing and Urban Development7 The Rent Restriction Act, Section 4(1)


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2) The Valuation section: inspects and assesses dwelling premises so as to supply theTribunal with necessary for the determination of Standard Rents

3) The Inspectorate section: receives tenancy complaints, upon which the necessaryinvestigations can be carried out

4)

The Process section: serves all court documents including summons, hearing notices,notices to quit and court orders5) The Registry: documents and case files are stored here. Various applications are also

filed in the Registry.

There are 10 fully-fledged stations of the Rent Tribunal countywide. All these stations arepresided over by advocates of the High Court. They are:

1) Nairobi Rent Tribunal: serves the Nairobi, Kiambu, Machakos, Makueni, Kajiado,Maragua and Thika regions.

2) Mombasa Rent Tribunal: serves the Mombasa, Kwale, Malindi, Taita Taveta, Tana Riverand Kilifi regions.

3) Kisumu Rent Tribunal: serves the Kisumu, Siaya, Nyamira, Rachuonyo, Kisii, Homabay,Suba, Kuria and Migori areas.

4) Nakuru Rent Tribunal: serves the Nakuru, Baringo, Narok, Kericho, Samburu, Koibatek,Eldama-Ravine, Bomet and Trans-Mara areas.

5) Nyeri Rent Tribunal: serves the Nyeri, Muranga, Kirinyaga, Nyandarua and Laikipiaareas.

6) Kakamega Rent Tribunal: serves the Kakamega, Busia, Bungoma, Teso, Lugari, Vihiga,Butere/Mumias and Mt. Elgon areas.

7) Eldoret Rent Tribunal: serves the Uasin Gishu, West Pokot, Turkana, Elgeyo, Nandi,Trans Nzoia and Marakwet areas.

8) Embu Rent Tribunals: serves the Embu, Meru, Kitui, Isiolo, Marsabit, Nyambene,Mbeere, Mwingi and Tharaka Nithi areas.

9) Garissa Rent Tribunal: serves the Garisssa, Wajir and Mandera areas.10) Lamu Rent Tribunal: serves the Lamu area.

The Cabinet Secretary by notice in the Gazette has the mandate to appoint a Chairman and

Deputy Chairman of the tribunal.8To be qualified for either of these positions, one has to have

held qualifications specified in paragraphs (a), (b), (c) and (d) of subsection (1) of Section 12 of

8 Supra. Note 6, Section 4(2)


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the Advocates Act for a period of not less than 5 years. 9 These provisions are howevercontained in section 13 of the existing Advocates Act. They are:

1) A person shall be duly qualified if-a) Having passed the relevant examinations of any recognized university in Kenya

he holds, or has become eligible for the conferment of, a degree in law of thatuniversity; or

b) Having passed the relevant examinations of such university, university college orother institution as the Council of Legal Education may from time to timeapprove, he holds, or has become eligible for conferment of, a degree in law inthe grant of that university, university college or institution which the Councilmay in each particular case approve; and thereafter both

i. he has attended as a pupil and received from an advocate

of such class as may be prescribed, instruction in the properbusiness, practice and employment of an advocate, and hasattended such course or tuition as may be prescribed for aperiod which in the aggregate including such instruction,does not exceed eighteen months; and

ii. (ii) he has passed such examinations as the Council of LegalEducation may prescribe; or

c) He possesses any other qualifications which are acceptable to andrecognized by the Council of Legal Education.

d) He is an advocate of the High Court of Uganda or the High Court of Tanzania

The above are however not the only members of the Tribunal. The Minister also has amandate, through a notice in the Gazette, to appoint a panel of members of any number ashe may think fit for each tribunal. 10

For the purposes of this paper:

landlord means any person, other than the tenant in possession, who is or would but for the

provisions of the Rent Restriction Act, be entitled to possession of the premises, and any personfrom time to time deriving title under the original landlord

9 Ibid, section 4(3)10 Rent Restriction Act, Section 4(4)


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tenant includes a sub -tenant and any person from time to time deriving title under theoriginal tenant, and the widow of a tenant who was residing with him at the time of his death,or where a tenant leaves no widow or is a woman, such member of the tenants family soresiding as may be determined by the court not withstanding that the rights under the tenancy

may have passed, on the tenants death, to some other person.service tenancy a letting by the landlord to an employee in connexion with his employment

dwelling house any house or part of a house or room used as a dwelling place, or place ofresidence and includes the site of the house and the garden and other lands and buildings lettherewith, and not as a separate entity or source of profit

standard r ent is the fair rent assessed by the Rent Tribunal in accordance with the RentRestriction Act.

tribunal means a Rent Tribunal established under section 4 and, in relation to any particularpremises, means the Rent Tribunal having jurisdiction in the area wherein those premises aresituated

composite tenancy means a tenancy comprising more than one dwelling-house where thetenancy is expressed to be in respect of, or where a single rent is expressed to be payable inrespect of, all those dwelling-houses

Premises means a dwelling -house to which this Act applies

e xcepted dwelling- house dwelling douses which are the property of and let to the tenant bythe Government, Kenya Railways, the Kenya Ports Authority, The Kenya Posts and

Telecommunications Corporation or a Local Authority

FUNCTIONS OF THE TRIBUNAL

The Actual Exercise of functions by the Tribunal:

In the exercise of its functions under the Rent Restrictions Act, a tribunal shall be presided overby the Chairman or Deputy Chairman of the tribunal and shall consist of the person so presidingand two members selected by the Permanent Secretary 11 to the Ministry from the panel ofmembers appointed under subsection (4) by the Minister. 12 This constitutes a full sitting.

11 Now referred to as a principal secretary 12 Rent Restriction Act, Section 4(5)


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However, in some instances, a full sitting as mentioned above may not be possible wheremembers of the panel are unavailable. In such cases, the jurisdiction of the tribunal may beexercised by the Chairman or Deputy Chairman sitting either with one such member or alone. 13

The tribunal may at any given time be presided over by a Chairman or Deputy Chairman,

however, save in the exercise of its power under Section 5 (1) (a) 14, the jurisdiction of thetribunal presided over by a Deputy Chairman shall be limited to cases in which the standardrent of the premises in question does not exceed Kshs. 1500. 15 The determination of matters bythe Tribunal is usually hinged on the majority vote of the persons constituting the Tribunal atthe time. 16

The Chairman on the other hand, acting alone, has jurisdiction to deal with all interlocutoryapplications which are not of such nature as to effect a decision in any matter which is in issuebetween the parties. 17

Functions of the Tribunal:

The Act at Section 5 lays down the functions and powers of this Tribunal. These include:

1. Resolve disputes between landlords and tenants of controlled tenancies by establishingthe facts of each case and then applying the relevant legal rules to decide what thestatutory rights and entitlements of the aggrieved actually are. At times it may settledisputes between tenants, this may be in the determination of charges to beapportioned between tenants who enjoy services in common, for example water,conservancy, sweepers and watchmen.

2. The Tribunal has a mandate to fix rent payable in accordance with justice and apportionamounts of service payable. 18

3. The Tribunal has power to determine the rent payable for different premises includedin one composite tenancy. The principle of standard has the objective of ensuring that afair and economic rent is given to the landlord while guaranteeing the security of tenurein his rented premises. In so doing, the Rent Tribunal balances the interests of landlordsand those of tenants. This has a twofold effect:

a) Creating an environment that ensures continued investment in low-incomehouses by investors.

13 Ibid.14 To assess the standard rent of any premises either on application of any person interested or of its ownmotion 15 Ibid, note 11, Section 4(6)16 Ibid, Section 4(7)17 Ibid, Section 4(8)18 Ibid, Section 5(b)


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b) Safeguarding the rights of the tenant to have access to adequate housing.

4. Advice on all complaints recorded with the Rent Inspectors. Many disputes and requestsfor advice are dealt with administratively at the offices of the Rent Restriction

Department.5. Investigation of cases where the provisions of the Rent Restriction Act has been flouted.An assessment of the standard rent of any premises may be conducted either on theapplication of any person interested or on the motion of the Tribunal itself. It ishowever, worth to note that such investigations may only be conducted after thepayment of a certain set fee. The Inspectorate department is tasked with suchinvestigative operations of the Tribunal.

6. Govern vacant possession where a landlord seeks to repair the existent structure orerect additional buildings to add on to the existent. Public interest must always beconsidered regarding such erections. The landlord may also be compelled to undertakeany repairs deemed necessary where he has failed to do so on his own accord.

7. The Tribunal governs rent payable and instances when the rent may be increased. TheAct provides that rent can only be increased where the landlord has to pay increasedrates or where he has improved the premises. 19 However, the Act is still clear that evenin such instances, the alteration of terms can only be done through the Tribunal.

Thus in Devani and another V Patel 20 , the Tribunal assessed overpayment and reassessed anew tenancy rent at Kshs. 450 increased from pre-January 1965 rent of Kshs. 380 a month,instead of Kshs. 900 agreed by the parties. Simpson and Kneller JJ recognized that there is amark-up allowed if a landlord has effected structural improvements or alterations, which alterthe identity of the premises. 21

8. To administer oaths, order persons to attend and give evidence or to produce and givediscovery and inspection of documents, in the same manner as in proceedings in theHigh Court, and for that purpose to authorize the chairman to issue summonses tocompel the attendance of persons before the Tribunal.

9. The Tribunal has power to assess standard rent upon applica tion by either party orassess whether a controlled tenancy has been legally determined. 22

In Shah V Aggarwal 23 upon purchasing a maisonnette over the head of a sitting tenant, thelandlord gave notice to vacate. Potter JA held that a controlled tenancy must first be

19 Rent Restriction Act, Section 1120 [1974] EA 46521 Ibid, at note 1422 Rent Restriction Act, Section 13(1)23 [1983] KLR 476


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terminated before increase of rent can be recovered under the RRA. A recovery order forarrears and mesne profits may accompany an order for vacant possession. These powerssafeguard the tenants protection against arbitrary increases and provide security of tenure . 24

In summary, the Rent Restriction Tribunal has the mandate of restriction of the increase of rent,the right of possession, extraction of premiums and fixing standard rent in relation to dwellinghouses; that is, hearing and determining disputes filed by landlords and tenants of residentialpremises. 25

In many instances, landlord-tenant disputes mainly stem from the failure to honor duties,responsibilities and promises by both landlords and tenants. For landlords, these may be failureto conduct repairs on the property in question, which is a common grievance for many tenants,while for tenants on the other hand; it could be their failure to pay up rent on a timely basis.

Such disputes could be resolved effectively by the Rent Tribunal upon the application of eitherparty. The Rent Restriction Act provides that premises with monthly rent not exceeding Kshs.2,500 (US$34.57) as of January 1, 1981, are subject to the provisions of the Act and thus underthe jurisdiction of the Rent Tribunal. Coincidentally, such premises form the bulk of rentals forinformal housing units in the country, which are the largest portion of the rental market. 26

The amount provided for in the Act has however been rendered obsolete by the passing of timein many aspects. This Act was enacted in 1-10-1959, when the cost of living was quite lowcompared to recent times. Kshs. 2500 at that time was probably a lot of money, unlike today

when it is almost impossible to get good living premises going at this rate. Premises going atsuch rent may be found mostly in informal settlements that many citizens prefer to avoid.

To the aforementioned effect, proposals have been made to change this figure to Kshs. 15000 27 to accommodate the changing times and put more tenants under the protection of the Act andconsequently under the umbrella of the Rent Tribunal. This proposal is however yet to beeffected.

24 Exit the Rentier State: Legislating to Provide Affordable and Secure Tenure in Kenya, GoverningInformal Settlements: On Whose Terms by Charles A. Khamala; 31 May 2011

25 Ministry of Housing, Rent Restriction Department: 21 July 2011

26 TS03J - Task Force on Property and Housing I, 6193 ; Collins Kowuor; Controlled Tenancy: A curse orBlessing to Property Investment in Kenya27 The Proposed Kenyan Landlord and Tenant Bill(2007)


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The Tribunal has no jurisdiction to determine disputes relating to ownership of premises. Thiswas stated in the Civil Appeal case of Stephen Ronoh v Harun Cheboi .28 Here, the respondentwas the plaintiff in Rent Restriction Tribunal case number 12 of 2002. In his plaint, he averredthat he was the landlord and owner of the premises in question and the appellant was his

tenant at a monthly rent of Kshs 2000. He claimed against the appellant a sum of Kshs. 32000being arrears in rent. The appellant denied that the respondent was the landlord and that heowed him any arrears in rent. He further stated that he was the registered owner of the plot inquestion. An issue arose as to the true owner of the disputed premises which the chairman ofthe Tribunal gave judgment upon. The Court, on appeal, held that the chairman of the Tribunalacted without jurisdiction when she held that the respondent is the rightful owner of thestructure irregardless of where the defendant may for the time being believe it stands and he isthe one who is entitled to rents from this premises . It went on to state that the mandate of theRent Restriction Tribunal is defined in Sections 5 and 6 of the Rent Restriction Act and the samedoes not include the determination of property ownership.

THE SUBJECT OF RENT RESTRICTION

Rent restriction is basically a means of protecting tenants from high market rents that wouldotherwise result from shortages of rented accommodation. 29 Rent restriction preventslandlords from raising rents haphazardly and thus in the process protect tenants from rapidincreases in rents. The tenant enjoys protection since the landlord cannot unilaterally increaserent, without the authority of the Tribunal. However, not all tenants enjoy the protection of theTribunal.

Unprotected Tenants or Premises:

Protected tenants are, therefore, those who live in residential premises whose rent is belowKshs. 2500, or the standard rent as stipulated by the Act. However, this protection is subject toa number of exceptions. Tenants living in Government let premises do not fall under thisprotection. Desai v Shah , is a classic example of this exception. Here, tenants paying KShs. 2500per month did not automatically become protected tenants under the Act. The premises thatwere the question of this matter fell under the umbrella of service tenancies.

Premises whose rent goes beyond Kshs 2500 are also out of the scope of protection of the Actand Tribunal, whether such premises are furnished or unfurnished. To this effect, it isnoteworthy that premises may be let furnished or unfurnished. Thus in Sands v Mutual

28 (2006) eKLR29 Julia Le Grand, Carol Propper & Carol Robinson; The Economics of Social Problems (London,MacMillan Press (1976) 1982)


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Benefits Ltd 30 Chanaan Singh J dismissed claims that a cooker and refrigerator are substantialenough to constitute furnished lettings under the Rent Restriction Act.

Excepted dwelling houses which include property of and let to tenants by the Government, aLocal Authority, Kenya Railways, the Kenya Ports Authority or the Kenya Ports and

Telecommunications Corporation are also outside the scope of the Act and the Tribunal.

As stated earlier on in this paper, the Tribunal has power to fix rent to be paid in accordance to justice and fairness. 31 To this effect, it has been submitted that the process of determiningstandard rent be guided by expert valuation reports. This view could be attributed to the factthat such reports would in most instances be objective and accurate. The Rent RestrictionTribunal may however, determine the standard rent to be of a figure it considers fair havingregard to the rents of premises of the same nature as the one in question. 32 Independentvaluations conducted by the parties to the dispute more often than not contradict, as each

party seeks to attain a figure that fits their interests.

A tenant usually retains the right to request for a valuation. Here, the landlord may engage anassessor to determine the value of the premises in question. This assessment may however bedisputed by the tenant.

A case that illustrates the above is that of Musa Ibrahim Osman v Leila Khamis Shikely 33 , anappeal arising out of the judgment of the Rent Restriction Tribunal at Mombasa in respect ofassessment of rent of residential premises. The applicant had carried out an independentassessment of the rent of the premises that amounted to Kshs 865 on the other hand theTribunal s assessment officer made a different assessment, which the landlady relied upon, thatamounted to a sum of Kshs 4,750. The Tribunal made an average of the two valuations and seta valuation amount at Kshs 2807 per month. The applicant on appeal contested that thevaluation process adopted by the tribunal was wrong. This method of assessment was said tobe wrong under section 9 (2) (a) of the Rent Restriction Act which states that rent should bedetermined on the basis of open market rent. In the Tribunal case the tribunal had reached itsconclusion stating:

We have carefully considered the two reports. We are of the view that both reports aretoo much tilted in favor of the parties. We have taken the difference between the two reports

30 [1971] EA 156 p 160-162.31 Rent Restriction Act, section 5 (1) (b)32 Section 3(2) (b) of Rent Restriction Act33 Civil Appeal 55 of 1994, in The High Court of Kenya at Mombasa


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divided by two and then added the result to the rent recommended by tenant valuer. The

approximate rent is Kshs 5000.we assess new rent at Kshs 5000 per month

The court, on appeal held that the Tribunal had the power to assess to do what it could todetermine fair rent to the landlord. In the circumstances, the court found that the Tribunal hadnot failed to act within the law. In this regard the appeal was dismissed with costs to therespondent.

Applications to the Tribunal:

The procedure for settling of disputes shall be prescribed by the Civil Procedure Act as far aspracticable except as prescribed in the Act, and shall be as follows:-

1. The applicant is to make a formal application as prescribed by the tribunal 34 . Such anapplication must be signed either by the party or their advocate. The applicant would

also be required to pay the prescribed fees. 35 2. The notice of hearing should be served to all parties or their advocates and the date

fixed for hearing shall not be earlier than 10 days after the date of service. 36 3. The hearing shall be open to the public and the affected parties shall appear either in

person or by an advocate. 37

Orders of the Tribunal have the same force of effect as a court order or decree. This extends tothe execution and observance of such orders. Any party, who fails to carry out an order by thetribunal after the period of appeal lapses or the decision is upheld on appeal, is guilty of an

offence subject to a fine of not more than Kshs 2000 or imprisonment of 6months or less, orboth punishments. 38

REVIEWS AND APPEALS

An aggrieved party may apply to the tribunal for a review of its decision. 39 No appeal is howeverpossible from the decision of such a review. 40

34 The Rent Restriction Regulations, Section 4(1)35Schedule of Fees, Sections (1) and ( 2) respectively: For filing an application under Order XXVof the Civil Procedure Rules, Kshs 200; fo r filing all other applications, Kshs 100

36 The Rent Restriction Regulations, Section 637 Ibid. Section 8 38 The Rent Restriction Act, Section 739 Ibid, section 8(3)40 Ibid, section 8(4)


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In instances where the Chairman of a tribunal forms an opinion that a question arising in anyproceedings before the Tribunal involves a substantial question of law, he may, adjourn theproceedings and refer that question of law to the High Court for a decision on the matter. 41 TheAct goes on to state that a decision of the Tribunal is final and conclusive. 42 However there are

a number of exceptions set out in section 8 (2). An appeal shall lie to the High Court

o On a point of lawo On a matter where the premises whose standard rent exceeds Kshs 1000 a

month. In this case it may be a point of fact and law.o Where after review of a decision by the Tribunal, a party is still aggrieved by the

decision made by a person acting under delegated power

No further appeal(s) shall lie from the determination of an appeal on the above stated matters.

This was held in the case of H. Odongo & 6 others v. Loans and Savings Kenya Limited 43

wherea second appeal to question the jurisdiction of the High Court to hear appeal matters againstthe Rent Restriction Tribunal was quashed. It was held that the High Court has no jurisdiction toreview its appellate decisions under the Rent Restriction Act.

The appeal to the High Court should be made within 15 days of the making of the decisionwhich the applicant deems unfair or prejudicial.

The law requires that hearings of the Tribunal be conducted in public. 44 This is in line with therules of natural justice as one would be assured of a fair and just hearing. Decisions can also

only be made by persons who have been part of the hearing from the onset.45

This provisionwould also ensure that there is fairness and justice in the hearing of the matter.

In Rent Restriction Tribunal v Mayfair Bakeries Limited 46 , an application or an order ofcertiorari was made after the tribunal acted in excess of its powers by estimating the cost ofrepairs payable for the premises in question. Such a power would have to be expresslyconferred on the Tribunal by statute. In this instance the tribunal had no such powers.

41 Rent Restriction Act, Section 4(9)42 Ibid, section 8 (1) 43 44 Rent Restriction Regulations, Section 845 Ibid ,section 946


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The Rent Restriction Act also stipulates that for a member to participate in a decision of thetribunal, the individual must have been present throughout the entire hearing. 47 If a memberparticipates in a decision before the tribunal without being present through the entire sessionwhen the matter was being heard, a party to the proceedings may seek review of the decision.

A notice of the hearing shall be served by the Tribunal on the parties or their advocates; andthe date of hearing shall be fixed not to be earlier than10 days from the date of service of thenotice of hearing. 48 This provision is set to allow all the parties to prepare adequately for theproceedings, and are thus in line with the requirements of natural justice and fair hearing.

47 Rent Restriction Regulations, Section 948 Ibid, section 6

Documents

The Rent Restriction Tribunal