SH11,500

MUNENE MUTWIRI: Court order to landlord to refund tenant's deposit laudable

This set a new precedent on the grey area of how tenants should recover their security deposit

In Summary

•It also highlighted the agony that the majority of Kenyans have faced in the hands of rogue landlords.

•The issue of homeownership and affordable housing has never been more relevant than now.

Gavel
Gavel
Image: THE STAR

The ruling by the court ordering a landlord to refund a tenant’s deposit of Sh11,500 is commendable.

This sets a precedent on the grey area of how tenants should recover their security deposit and how landlords can legally retain the security deposit.

It also highlighted the agony that the majority of Kenyans have faced in the hands of rogue landlords.

The issue of homeownership and affordable housing has never been more relevant than now.

In this case, FK had sued the landlord (JM) and a private company.

FK became a JM's tenant in November last year and after five months, he issued notice to terminate the tenancy, but the landlord refused to refund the deposit.

The landlord told the court that FK upon the termination of the tenancy did not return the premises in the condition he found it; therefore, the repairs were met by his deposit money.

From the ruling delivered by Magistrate Judith Omollo a few notable issues stand out. 

Omollo noted that claims by the landlord that he incurred expenses to do repairs on the house are not reason enough to withhold the deposit money.

The court further said that the repairs carried out could not be said to restore the house to the state it was before occupation and hence the tenant cannot be held liable.

It should be noted that rental houses are business investments and for the houses to attract customers and remain competitive constant repairs are a norm and these repairs at times run into millions.

But also, in any investment, the investor should take into account the depreciation criteria of their investment.

I think the ruling should have outlined what constitutes normal wear and tear and normal depreciation of a rented unit in which case the landlord caters for the expenses and in what situation it shifts to poor usage of the unit and the restoration to the original state now shifts to the tenant.

The common belief is that all one needs to do as a landlord is building, get tenants and wait for rental income each month.

The reality is that owning rental units is a business and a portion of rental income should be ploughed back into the buildings to keep them in good condition.

Often, misunderstanding arises between landlord and tenants over who is responsible for maintaining the premises.

The best way to preempt such conflicts is through a rental agreement to be signed by each tenant when moving in.

Apart from the usual clauses about paying on time, notice to vacate and the handling of deposits, the rental agreement should specify who between tenant and landlord is responsible for minor and major repairs, regular painting of interior and exterior walls and restoring the premises to their original state when the tenant moves out.

With the rental agreement signed, it can be assumed that the tenant now understands his or her rights and responsibilities.

However, a court case between Africa’s biggest supermarket and its former landlord, The Waterfront Karen Mall, exposed the prevalent lack of exit clauses in lease agreements between retailers and mall landlords, in this case, the lack of a clear exit clause between a tenant and the landlord.

This case has also brought to the limelight the need for the government to implement the Big 4 pillars on affordable housing to increase the number of homeowners in Kenya.

The 2019 population and census results indicate that, out of 47.6 million Kenyans, 7,379,485 Kenyans own their homes. This is 15.4 per cent of the total population.

According to figures from the National Housing Corporation, Kenya has a housing deficit of two million units which grows by 200,000 units annually.

According to the Central Bank, Kenya has only about 27,000 mortgages, while 61 per cent of Kenyans own their homes, only three per cent of those homeowners actually bought the houses.

While 93 per cent of homeowners built their own houses and three per cent inherited them and the vast majority of the owned homes are in the countryside, according to the Kenya National Bureau of Statistics.

Therefore, homeownership in urban areas countrywide stands at 21.3 per cent implying that more than 78.7 per cent of the urban population are renters

While I commend the government on the affordable housing initiative, the aspect of homeownership should be at the core of this initiative.

Kenyans can only be liberated if they are owners but not tenants in their ‘homes’.

Media analyst 

 

Edited by Kiilu Damaris