RENT RESTRICTION ACT

As per our short discussion in class on the effect and meaning of “Kshs. 2,500/=” under the Rent
Restriction Act (“the Act”), the following is for consideration.

The Rent Restriction Act does not refer to a rent of Kshs. 2,500/=. Instead, it refers to a “standard rent”
of Kshs. 2,500/=. The difference is critical.

Section 2(1)(c) provides that the Act does not apply to “dwelling-houses which have a standard rent
exceeding two thousand five hundred shillings per month, furnished or unfurnished.” (Emphasis added)

Section 3 on interpretation of “standard rent” defines it to mean:

(a) in relation to an unfurnished dwelling-house—

(i) if on the 1st January, 1981, it was let unfurnished, the rent at which it was lawfully so let, the
landlord paying all outgoings;

...

(iii) if on the 1st January, 1981, it was not let, or not erected, or the tribunal is unable to
determine whether or not it was on that date let or erected, a rent to be assessed by the
tribunal at a monthly rate of not less than one and one-quarter and not more than one and one-
half percent of the cost of construction and the market value of the land, the landlord paying all
outgoings;

Where a matter is before the Rent Restriction Tribunal (“Tribunal”), it is irrelevant what the rent being
charged is, notwithstanding any tenancy agreement or lease execution. That rent is not equivalent to
“standard rent” which can only be determined and certified as such standard rent by the tribunal.

As regards the Kshs. 2,500/= standard rent therefore, this means the rent as at January 1981 or as
determined by the Tribunal (not landlords).

Section 5(1) of the Act on powers of the Rent Tribunal:

“The tribunal shall have power to do all things which it is required or empowered to do by or
under the provisions of this Act, and in particular shall have power— (a) to assess the standard
rent of any premises either on the application of any person interested or of its own motion;”

A challenge to the jurisdiction of the tribunal based on rent amounts outside of the tribunal fails since
only the tribunal can ascertain “standard rent’. Judicial review of decisions by the Tribunal will first
require exhaustion of appeal mechanisms of the Tribunal.

This is as was held in Registered Trustees, Kenya Railways Staff Retirement Benefits Scheme v
Chairman, Rent Restriction Tribunal & 99 others [2018] eKLR where the ELC held that “[t]he applicant
in this case has neither exhausted the review mechanism in Section 5(1) (m) of the Rent Restriction Act
nor moved this court for an exemption order under Section 9(4) of the Fair Administrative Action Act.
The net result is that the present application for leave is premature.”
The Tribunal is of the view that they have jurisdiction over any dwelling houses if the “standard rent”
does not exceed Kshs. 2,500, that only the Tribunal can determine “standard rent”, and that Landlords
would have to prove “standard rent” or seek assessment of “standard rent” if they are to succeed in
challenging the Tribunal’s jurisdiction. Agreed rent, according to the Tribunal does not oust their
jurisdiction. This is despite the holding by Majanja J in Republic v Chairman Rent Restriction Tribunal &
another Ex-Parte Ezekiel Machogu & 3 others [2013] eKLR.

This is ostensibly because the provisions of the Fair Administrative Actions Act, 2015 require a stringent
review mechanism that gives more protection to the Tribunal decisions. Majanja J in the above case did
not deal with those restrictions in his judgment.

In Republic v Rent Restriction Tribunal & 2 others Ex Parte Evans Nyahoro,Paul Kinuthia Kilundi,
decided on 16th March, 2018, Odunga J held that “In my view the issue whether or not the premises in
issue were standardised or not ought to have been determined by the Respondent.” And further that “In
other words the finding on jurisdiction will depend on the factual determination of the issue of whether
the premises ought to attract standard rent or not, a matter which is still at large. These are matters
which ought to be taken up before the Respondent at the inter partes hearing of the application. This
Court cannot usurp that jurisdiction and stop the Respondent in its tracks before it hears the parties on
the issue.”

In the end:

- agreed rent is not “standard rent”.

- Standard rent is the rent in January 1981 or as assessed by the Tribunal.
- The jurisdiction of the Tribunal to determine standard rent cannot be challenged before the
Tribunal makes the determination.

This then affords tenants paying rents higher than Kshs. 2,500/= protection since the Tribunal can give
them ex-parte orders that are not easily short-circuited by the Landlords running to the ELC or High
Court. The Tribunal may very well assess the rent as above Kshs. 2,500/= but the Landlord must await
that determination. Agreed rent before determination is irrelevant.

NB: I am awaiting a case listing from the Tribunal on their decisions on the meaning of standard rent.