Controlled Tenancies in Kenya: The Business Lease Rule Many People Miss.

Picture this. You rent a shop, salon, restaurant or office space. Business is running well. Then one day you receive a notice from the landlord asking you to vacate or informing you that rent will double next month.

Most people assume the landlord can do this freely. In many cases in Kenya, that is not true.

A large number of commercial leases fall under what the law calls a controlled tenancy. These tenancies are governed by the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act (Cap 301) and disputes are handled by the Business Premises Rent Tribunal (BPRT).

So What Exactly Is a Controlled Tenancy?

A tenancy is usually considered controlled if any of the following applies:

• The agreement is not written down
• The lease is for five years or less
• The lease allows termination within five years

This surprises many landlords and tenants. Even a simple agreement or a handshake arrangement can fall under these rules.

Why the Law Treats These Tenancies Differently

The law recognises that business premises are not the same as ordinary housing. A tenant running a business may have invested in equipment, stock, branding and loyal customers tied to that location.

Because of this, landlords cannot simply wake up and terminate the tenancy or increase rent without following the proper legal process.

What Must a Landlord Do?

If a landlord wants to terminate a controlled tenancy or change its terms, they must issue a formal statutory notice in the prescribed form.

Once that notice is issued, the tenant has the right to challenge it before the Business Premises Rent Tribunal.

The tribunal then determines whether the termination or rent increase is justified.

Where Many Disputes Start

In practice, many conflicts arise because one party does not realise the tenancy is controlled.

A landlord may attempt eviction without following the statutory process. A tenant may refuse to comply with a lawful notice. By the time lawyers become involved, the situation has already escalated.

The Smart Move

If you receive a notice affecting your business premises or you are a landlord considering changes to a tenancy, it helps to understand your legal position early.

Getting the right advice at the right time can save significant time, money and disruption to your business.

Our firm regularly advises both landlords and tenants on commercial tenancy matters and representation before the Business Premises Rent Tribunal.