A landlord’s decision to increase monthly rent can alter a household’s budget, particularly when the new figure runs into thousands of shillings.
The Kenyan law does not prescribe a fixed percentage by which rent can be increased. Instead, whether an increase is lawful depends on the tenancy agreement, the law governing the tenancy and, in some cases, the courts or specialised tribunals.
“There is no general statutory cap expressed as a percentage for most ordinary residential tenancies in Kenya,” says Chris Gichangi, an advocate of the High Court of Kenya and partner at G.M. Gamma Advocates LLP.
“The starting point is the tenancy agreement, guided by the general law of contract. However, that does not mean a landlord can impose any increase whatsoever in every circumstance.”
According to Mr Gichangi, the legality of a rent increase depends on whether it complies with the tenancy agreement or the applicable law.
“Where a tenancy is governed by legislation such as the Rent Restriction Act or the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, rent increases are subject to statutory oversight and may be challenged before the relevant tribunal,” he says.
Court decisions over the years show how judges and tribunals have approached disputed rent reviews. While many of the recent decisions involve commercial premises governed by the Business Premises Rent Tribunal, they illustrate the factors courts consider when landlords and tenants disagree over rent increases.
One of the most striking disputes involved Milly Glass Works Limited v Kenya Railways Corporation, in which Kenya Railways sought to increase annual rent from Sh146,000 to Sh10.2 million under a lease signed in 1980.
Milly Glass Works challenged the increase, arguing that it was not authorised by the lease. The dispute eventually reached the Supreme Court, which struck out the appeal on jurisdictional grounds. However, the litigation underscored the importance of the terms of a lease in determining whether and when rent may be reviewed.
Another major dispute came before the Business Premises Rent Tribunal in Burger Chief Limited v APA Insurance Limited.
The landlord sought to increase monthly rent for commercial premises in Hurlingham from Sh41,000 to Sh192,840, arguing that the new figure reflected prevailing market rates. After considering valuation evidence from both sides, the Tribunal fixed the rent at Sh176,770 per month.
In Ngugi v Chege and another, a tenant who had paid Sh20,000 a month for about two decades challenged a proposed increase to Sh40,000.
The Tribunal upheld the new rent after considering that the rent had remained unchanged for about 20 years, prevailing market conditions and valuation evidence showing the property’s rental value. The case demonstrated that even a 100 per cent increase is not automatically unlawful if the evidence justifies it.
Other tribunal decisions have reached different conclusions.
In Said v Sulum, the Tribunal approved an increase from Sh35,000 to Sh60,000 a month, while in Miran v Edward, it reduced a landlord’s proposed increase from Sh26,000 to Sh22,500 after assessing the evidence.
In Jethwa v Janoowalla and another, landlords sought to increase rents from Sh3,354 to Sh55,000 for one tenant and from Sh2,528 to Sh35,000 for another, highlighting the significant differences that can arise where rents have remained unchanged for years.
Tribunals have also intervened where landlords failed to follow the required legal process.
In Samwel and another v David, the Business Premises Rent Tribunal restrained a landlord from illegally increasing rent and declared a termination notice invalid.
Similarly, in Fabian Investment Limited v Deveer Developers Limited, a tenant challenged an increase from Sh80,000 to Sh110,000, arguing that the landlord had not issued the required notice, while Machua v Mungai involved a challenge to an increase from Sh45,000 to Sh70,000 on procedural grounds.
While the outcomes differ, the cases point to a common principle: Kenyan courts and tribunals do not determine rent disputes by looking only at the percentage increase. They consider the tenancy agreement, applicable legislation, market evidence, valuation reports and whether the landlord followed the proper legal procedure.
According to Mr Gichangi, valuation evidence is often decisive where a rent increase is disputed.
“The tribunals have consistently examined whether the proposed rent reflects what would reasonably be obtained in the open market for comparable premises,” he says.
He adds that valuation reports and comparable market rates often carry significant weight, particularly in commercial tenancy disputes.
Even where a lease contains a rent-review clause, landlords are not given unlimited discretion to revise rent.
“A rent-review clause generally gives the landlord a contractual right to review rent, but it is not a licence for arbitrary increases. If the clause specifies timing, frequency, valuation methodology or a formula for calculating rent, those requirements must be complied with,” Mr Gichangi says.
Where a tenancy agreement is silent on rent reviews, he says, landlords cannot simply impose higher rent during an existing tenancy.
“If the tenancy is periodic, such as month-to-month, a landlord may ordinarily propose new rental terms upon giving proper notice.”
He also cautions landlords against relying solely on informal communication.
“For controlled tenancies, a landlord must issue the prescribed statutory notice. A WhatsApp message or SMS alone is unlikely to satisfy the statutory requirements where the law prescribes both the content and method of notice,” he says.
Tenants who believe a rent increase is unlawful should challenge it through the appropriate legal channels rather than simply withholding rent.
“If the increase is ultimately upheld, the tenant may become liable for rent arrears, interest, costs or even termination of the tenancy, depending on the circumstances.”
He advises tenants to first review their tenancy agreement, determine whether the tenancy is controlled, preserve all correspondence relating to the rent review and, where necessary, obtain valuation evidence before lodging a complaint with the appropriate tribunal or court.