Evicting a commercial tenant in Kenya is rarely as simple as the lease makes it look. Many business tenancies are “controlled tenancies” under a special statute, and for those a landlord cannot rely on the lease alone. This guide explains when that regime applies, how to end a commercial tenancy lawfully, and why self-help eviction is a costly mistake.
This guide is for commercial landlords, property managers and business tenants who need to end, renew or defend a commercial tenancy. It focuses on business premises. If you are negotiating the lease itself, read it alongside our guide to commercial lease agreements in Kenya. If a dispute has already started, our dispute resolution team can act.
Kenyan law treats many business tenancies differently from ordinary contracts. The Landlord and Tenant (Shops, Hotels and Catering Establishments) Act (Cap 301) protects tenants of business premises from being turned out at short notice. Where it applies, the landlord’s freedom to end the tenancy is limited, and the tenant has security that the lease alone would not give.
The first question in any commercial eviction is therefore not “what does the lease say” but “is this a controlled tenancy”. The answer decides everything that follows.
Under section 2 of Cap 301, a tenancy of a shop, hotel or catering establishment is a controlled tenancy if any of the following is true: the tenancy has not been reduced to writing; or it is in writing but for a term of five years or less; or it is in writing but contains a provision allowing it to be ended within five years of its commencement. Premises of a class specified by the Cabinet Secretary are also caught.
The practical effect surprises many landlords. For example, a written five-year lease of a shop is a controlled tenancy. So is a lease with a break clause in year three. However, a written lease for a fixed term of more than five years, with no earlier break, falls outside the regime. Therefore, if the tenancy is controlled, the landlord must use the statute, whatever the lease says about notice or forfeiture.
| Tenancy | Controlled? |
|---|---|
| Oral or undocumented tenancy of a shop | Yes |
| Written lease of a shop for five years or less | Yes |
| Written lease with a break clause exercisable within five years | Yes |
| Written lease for a fixed term of more than five years, no earlier break | No |
| Premises that are not a shop, hotel or catering establishment | Outside Cap 301 (governed by the lease and the Land Act, 2012) |
To terminate a controlled tenancy, or to change its terms against the tenant, the landlord must serve a notice on the tenant in the prescribed form under section 4. The notice must give not less than two months before the date it is to take effect. In addition, it must state the ground on which the landlord relies. The grounds are set out in section 7. For example, they include rent arrears, breach of the tenant’s obligations such as repair, the landlord’s genuine need of the premises for its own occupation or reconstruction, and the availability of suitable alternative accommodation for the tenant.
The tenant then has one month to notify the landlord in writing whether it agrees to comply. However, if the tenant objects, the tenancy does not simply end. Instead, the matter is referred to the Tribunal, and the tenancy continues on its existing terms until the Tribunal decides. In our view, this is the single most misunderstood point in commercial property here: serving a defective notice, or no notice, leaves the tenancy running and the landlord exposed.
Cap 301 establishes a Tribunal, known in practice as the Business Premises Rent Tribunal, to decide disputes between landlords and tenants of controlled premises. It handles objections to termination notices, disputes over rent and terms, and claims for compensation. Its decisions bind the parties, subject to appeal. For a controlled tenancy, the Tribunal, not the ordinary courts, is the usual forum, and a landlord who ignores it and takes matters into its own hands will struggle to justify that later.
If the tenancy is not controlled, because the premises are not a shop, hotel or catering establishment, or because the lease is for a fixed term of more than five years, the position is governed by the lease and the Land Act, 2012. The landlord’s remedies then depend on the lease. A well-drafted commercial lease will contain a right of re-entry or forfeiture for breach, and the landlord may forfeit the lease and recover possession, subject to the tenant’s right to seek relief against forfeiture. A landlord may also distrain for rent arrears under the Distress for Rent Act (Cap 293), but only through a licensed auctioneer and without breaching the peace. Even here, the safe route to possession is a court process, not a lock-out.
The temptation, when a tenant stops paying, is to change the locks or remove the tenant’s goods over a weekend. However, that is unlawful eviction. As a result, it exposes the landlord to a claim for damages, including for the tenant’s lost business and goods, and a court can order the tenant back in. It also hands the tenant the moral and legal high ground in any later dispute. In short, the disciplined route, statutory notice or lease forfeiture followed by a proper process, is slower but far cheaper than the litigation that self-help invites.
Can I evict a shop tenant when the lease ends? Not automatically, if the tenancy is controlled. You must serve a statutory notice under Cap 301 and, if the tenant objects, go to the Tribunal.
My lease says I can re-enter on default. Can I just do that? Only if the tenancy is not controlled. For a controlled tenancy the statute overrides the lease, and you must use the section 4 notice.
How much notice must I give? For a controlled tenancy, not less than two months in the prescribed form, stating a permitted ground.
Can I lock out a tenant who has not paid rent? No. That is unlawful eviction and can cost you far more than the arrears.
What forum decides these disputes? The Business Premises Rent Tribunal for controlled tenancies; the Environment and Land Court or the ordinary courts for others.
The classic error is assuming the lease governs the eviction when the tenancy is in fact controlled by Cap 301. Next is a defective statutory notice, in the wrong form, with too little time, or with no ground stated, which leaves the tenancy running. Others resort to self-help lock-outs and turn a rent dispute into a damages claim. And some landlords miss that a break clause inside five years pulls even a longer-looking lease into the controlled regime.
Our real estate and dispute resolution teams act for commercial landlords and business tenants across the tenancy cycle, from drafting the lease to serving statutory notices, representing clients before the Business Premises Rent Tribunal, and recovering possession lawfully. We also defend tenants facing unlawful eviction. To discuss a commercial tenancy or an eviction, contact John Maina, Partner, at OLM Law Advocates LLP.
This article is a general guide only and is not legal advice. Please seek advice on your specific circumstances.
OLM Law Advocates LLP advises landlords, tenants, buyers, developers and investors on Kenyan property, from conveyancing and leases to titles and disputes.
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