Tenants struggling with rent are also being encouraged to alert their landlords that if they see us delaying with the rent, they can switch on their television to hear the President ask for the one year extension to deliver.
When Dr Michelle Muhanda decided to move from her rented house in one of Nairobi's upmarket estates, Woodlands Grove Villas, she contacted the development manager to ask for her deposit.
She expected the process to be seamless, having been a tenant for seven years without any problems or confrontations with the development manager, LP Holdings Ltd.
However, things did not turn out as she had expected. The manager refused to give in to her demands for a refund of the Sh230,000 deposit.
Instead, to her shock, the management responded through a letter dated May 10, 2023, with a bill of quantities totaling Sh271,857, which was supposed to cover repair works in the house that Dr Muhanda had occupied from February 2015 to October 2022.
Dr Muhanda argued that the house was in good condition when she left and that the company ignored her request to conduct a joint inspection by then to determine if there were any damages before leaving.
Her deposit requests were unsuccessful, forcing her to file a case before the Small Claims Court seeking a refund of her deposit, punitive and exemplary damages under the Consumer Protection Act, and damages for breach of contract for the company's allegedly outrageous and oppressive conduct.
The Small Claims Court dismissed the case on jurisdictional grounds, but she did not give up. She filed the case at the High Court through Human Rights and Consumer Protection Advocate, Joseph Mwai.
On January 23, 2025, Justice Helene Namisi of the High Court at Milimani Commercial and Tax Division ruled against LP Holdings Ltd, overturning a previous decision by the Small Claims Court.
Justice Namisi stated that the Small Claims Court (SCC) has jurisdiction to hear cases involving the refund of rent deposits, as such claims fall under Section 12(1)(b) of the Small Claims Court Act, which covers "contracts relating to money held and received."
In the court papers, LP Holdings Ltd had responded that the claims related to rental deposit by the tenant were outside the jurisdiction of the court as contemplated under section 12 of the Small Claims Court Act.
“Contrary to section 12 (3) of the Small Claims Court Act, the Claimant seeks Sh1,030,000 which exceeds the pecuniary jurisdiction of the Court limited to Sh1,000,000. The suit is incompetent, an abuse of court process, and ought to be dismissed with costs to the Respondent,” LP Holdings Ltd told the court.
But Justice Namisi reiterated that the SCC is an appropriate forum for post-tenancy disputes, including claims for the return of rent deposits and various damages against landlords who withhold refunding of rent deposits.
“The Appellant’s claim was for breach of contract, relating to the rent deposit paid by the Appellant to the Respondent. In my view, the Appellant’s claim falls squarely within the provisions of section 12 (1) (b) of the Act, being a contract for money held and received. It is, therefore, the finding of this Court that the trial court has requisite jurisdiction,” Justice Namisi ruled.
The ruling has cleared the way for tenants to take landlords to the Small Claims Court and claim their deposits upon relocating, and all proceedings shall be heard and determined on the same day or on a day-to-day basis until final determination of the matter, which shall be within 60 days from the date of filing the claim.
The ruling has been hailed by advocate Mwai, stating that going forward, tenants in Nairobi and other parts of the country should demand their deposits and file cases in case landlords fail to refund.
He says that the judgment serves as a wake-up call for landlords, real estate agents and companies to ensure fair and transparent practices when dealing with tenants, especially regarding rent deposits.
“The judgment also underscores the importance of consumer protection, which is a guaranteed right under Article 46 of the Constitution of Kenya,” Mr Mwai said.
“Article 46 ensures that consumers have the right to fair treatment, including the right to goods and services of reasonable quality, the right to information about products and services, the right to have their economic rights protected and compensation for loss or injury arising from defects in goods or services.”
