Are you a landlord or tenant? This Bill affects your finances

Arbitrary rent increments will be curbed and landlords also compelled to reduce fees charged tenants should they cease to provide a prescribed service if a new Bill is enacted.

The government-backed Bill compels landlords to give a 90-day notice to a tenant before any rent increment and provides the raise can only be effected once every 12 months for residential and 24 months for business premises.

And The Landlord and Tenant Bill, 2021, seeks to control the margin of increment in rent, for instance, explaining that should a landlord cite inflation, then the additional fee should reflect the percentage change reported monthly by the Kenya National Bureau of Statistics.

To ensure landlords only increase rent when it’s absolutely necessary, the Bill seeks to criminalise false justification in the notice to the tenant.

“If a notice served under section 18 (which permits increments) contains any statement or representation which is false or misleading in any material respect, the landlord commits an offence and is liable, upon conviction to a fine not exceeding twenty thousand shillings,” states the Bill sponsored by Majority Leader Amos KImunya.

The proposed law which governs the relationship between landlords and their tenants, requires sets timelines when rent increments can be effected to curb arbitrary hikes.

“A landlord who is lawfully entitled to increase the rent charged to a tenant for premises may do so only if at least twelve months, in the case of residential premises and twenty four months, in the case of business premises have elapsed since the date— (a) of the last rent increase for that tenant in the rental premises, if there has been a previous increase; or (b) the premises were first rented to that tenant,” the Bill states.

It adds: “A landlord shall not increase the rent payable by a tenant for rented premises unless the landlord gives the tenant at least ninety days written notice of the intention to do so. “

Any rent increase implemented without observing this requirement will be deemed void.

The Bill spells out instances when a landlord is entitled to ask tenants to pay more.

Among them is where he/she has or intends to upgrade the premise, or provide a new service.

These include structurally altering the premises, redecorating, repairs, and new installations, measures to promote water or energy conservation and security of the premises.

“An increase based on inflation shall be based on the percentage change from year to year in the Consumer Price Index for prices of goods and services as reported monthly by the Kenya National Bureau of Statistics, averaged over the twelve-month period that ends at the end of December of the previous calendar year, rounded to the first decimal point,” the Bill stipulates.

A tenant who does not oppose increase of rent within 30 days of receiving the notice is deemed to have accepted the new fees.

Rent reduction

On the flipside, a landlord shall be compelled to decrease the rent if he/she ceases to provide any prescribed service to the tenant.

This is with respect to the tenant’s occupancy of the premises. Such a decrease in rent will be proportionate to the decrease of the service, the Bill states.

If the need to terminate tenancy arises, a landlord shall give reason for such and the date on which the termination will take effect.

The termination notice that shall be signed by the landlord or his agent gives the tenant at least four months.

“The date of termination specified in the notice shall be at least one hundred and twenty days after the notice is given and shall be the day the period the tenancy ends…where the tenancy is for a fixed term, the end of the term,” reads the bill.

The Bill explains a tenant who receives a notice of termination has an option to terminate the tenancy himself at any time before the date when the termination would have taken effect.       

 “If the tenant does not vacate the premises, the landlord may apply to the Tribunal for an order to terminate the tenancy and to evict the tenant,” it states.

However, a landlord is entitled to evict a tenant without consulting the Tribunal if, without a prior written consent by the landlord, the tenant sublets the premises,  or defaults in rent payment for three consecutive months, following the last date when the rent was due to be paid.

However, while pursuing defaulters, landlords who seize a tenant's property without following the legal process risk six months in prison or a fine equivalent to two months of the rent of the premises.

Some of the reasons a landlord can invoke to terminate tenancy are if a tenant breaches the agreement, an offer to the tenant of alternative accommodation and the intention to demolish the premises.

A landlord may also terminate a tenancy to allow his spouse, child or parent to possess the premises.

Also if the landlord intends to move into the premises, either for more than a year to conduct business, or as a permanent residence.

Another ground to terminate tenancy is if the tenant’s rent is paid by their employer and the tenant loses his/her job.

The landlord can also terminate the tenancy if the tenant commits an illegal act or carries on an illegal trade, or causes damage, wilfully or negligently to the rented premises.

A tenant can also be served a termination notice if his conduct interferes with the rights, interest and privileges of the landlord or other tenants.

Tenancy can also be terminated if it was a collateral to the sale of a premise, and the sale has been terminated.

Additionally, if the number of persons occupying the premise on a continuing basis contravenes health, housing and safety standards as required by law, the tenancy will be halted.

The Bill dated February 12, this year, is before the National Assembly.