Guide · Tenancy law

Controlled tenancies and the Business Premises Rent Tribunal

If you let a shop, a bar, a restaurant or a guest house in Kenya, there is a good chance the tenancy is controlled — and that you cannot end it, or raise the rent, by doing what your lease says. The statute overrides the agreement, and tribunals apply it strictly.

This catches out experienced landlords constantly, because nothing about a controlled tenancy looks different from an ordinary one. There is no register to check and no stamp on the lease. Whether the protection applies is a question of what kind of premises it is and how the tenancy is written — and if it applies, a notice that ignores the Act is simply void.

What makes a tenancy "controlled"

Section 2 of the Act defines it. A tenancy of a shop, hotel or catering establishment is controlled where any of the following is true:

• it has not been put in writing at all; or
• it is in writing but runs for five years or less; or
• it is in writing and contains a way of ending it, other than for breach, within five years of when it started; or
• it falls within a class the Cabinet Secretary has declared controlled by notice in the Gazette.

There is one carve-out worth knowing: where the Government, the Community or a local authority is a party — as landlord or as tenant — the tenancy is not controlled.

Two consequences follow that people miss. The first is that an oral tenancy of a shop is automatically controlled, however long it has run and however informal the arrangement felt. The second is that a five-year written lease with a break clause is still controlled, because the break is a means of termination within five years. Drafting a lease for exactly five years does not by itself take you outside the Act if you have also given yourself an early exit.

"Shop" is defined broadly — premises used wholly or mainly for retail or wholesale trade, or for providing services for money. That reaches further than the word suggests. A salon, a cyber café, a workshop taking paying customers: all plausibly shops.

Which tribunal, and why filing in the wrong one costs you

There are two, and they do not overlap.

The residential threshold under Cap 296 is a standard rent not exceeding KES 2,500 a month. That figure has not moved with the market, so in practice the overwhelming majority of residential lettings in Kenya today fall outside rent restriction altogether and are governed by the lease and the general law rather than by a protective statute.

Which is worth stating plainly, because it is the opposite of what most landlords assume: your residential block is probably not controlled, and your small shop probably is.

Ending a controlled tenancy: the notice is the whole thing

Section 4 governs termination, and it is unforgiving. A landlord who wants to end a controlled tenancy — or to change any term, right or service to the tenant's detriment — must serve notice in the prescribed form. In practice that is Form A.

The timing rule sits in section 4(4). The notice cannot take effect earlier than two months after the receiving party got it. Three refinements apply:

• the termination date cannot be earlier than the date the tenancy could otherwise have ended anyway;
• if the tenancy itself provides for a longer notice period, that longer period applies instead of two months;
• the parties may agree in writing to a shorter period — but it must be in writing and agreed, not assumed.

You must state your grounds, and only stated grounds count

The notice has to say why. Section 7 sets out the permitted grounds, and a landlord may later rely only on grounds actually stated in the notice — you cannot serve a bare notice and produce a reason at the hearing. The commonly used ones include:

• Rent arrears — the tenant has defaulted for two months after rent became due, or has persistently paid late;
• Other substantial breach — of the tenant's obligations, or a reason connected with how they use or manage the premises;
• Demolition or reconstruction — the landlord intends to demolish, reconstruct or carry out substantial construction, and could not reasonably do so with the tenant in place.

What the tenant can do about it

The notice must also tell the tenant about their right to respond. The tenant has a window — one month from the notice — to tell the landlord whether they intend to comply or to oppose it. A tenant who notifies opposition can refer the matter to the tribunal, and where they do, the notice has no effect until the tribunal has determined the reference.

That is the practical reality behind "two months' notice": two months is the floor, not the timetable. A contested reference sets the real duration, and it is measured in months.

Raising the rent on a controlled tenancy

The same machinery applies. A rent increase alters a term to the tenant's detriment, so it goes through the prescribed notice and the same minimum period, and the tenant has the same right to object. A unilateral increase — a letter announcing a new figure from next month — is not enforceable against a controlled tenant, and demanding it can put you in the wrong.

The tribunal can also assess and fix the rent where the parties disagree about what is reasonable.

Four expensive mistakes

1. Assuming a written lease takes you outside the Act. It does not, unless it exceeds five years and has no early termination provision.
2. Self-help. Changing locks, removing a roof, cutting water or power. These are unlawful regardless of how much rent is owed, and they convert a straightforward arrears case into a harassment claim against you.
3. Levying distress without authority. The tribunal has power to permit distress for rent in controlled tenancies. Seizing goods without going through it is a different thing entirely.
4. Filing in the wrong forum. A residential dispute in the BPRT, or a shop dispute in the RRT, costs you the filing fee and the time — and time is what the tenant has.