{"id":14385,"date":"2025-04-28T08:33:24","date_gmt":"2025-04-28T08:33:24","guid":{"rendered":"https:\/\/property254.co.ke\/blogs\/?p=14385"},"modified":"2025-04-28T08:53:58","modified_gmt":"2025-04-28T08:53:58","slug":"supreme-court-clarifies-on-lease-termination","status":"publish","type":"post","link":"https:\/\/property254.co.ke\/blogs\/supreme-court-clarifies-on-lease-termination\/","title":{"rendered":"Supreme Court Clarifies Tenant\u2019s and Landlord&#8217;s Rights on Lease Termination"},"content":{"rendered":"\n<p>Several years ago, lawyers and property experts started raising concerns about Kenya\u2019s outdated law governing commercial leases \u2014 the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act. Although this law was meant to protect tenants, smart lease drafting and rigid interpretations by landlords often made it very difficult for tenants to exit leases, even in genuine cases of hardship.<\/p>\n\n\n\n<p>A recent Supreme Court decision in <strong>Kwanza Estates Limited v Jomo Kenyatta University of Agriculture and Technology (JKUAT)<\/strong>, delivered in December 2024, now provides clarity \u2014 and some important lessons \u2014 for both landlords and tenants.<\/p>\n\n\n\n<div data-wp-interactive=\"core\/file\" class=\"wp-block-file\"><object data-wp-bind--hidden=\"!state.hasPdfPreview\" hidden class=\"wp-block-file__embed\" data=\"https:\/\/property254.co.ke\/blogs\/wp-content\/uploads\/2025\/04\/Kwanza-Estates-Limited-v-Jomo-Kenyatta-University-of-Agriculture-and-Technology-Petition-E001of2024-2024KESC74KLR-6December2024-Judgment.pdf\" type=\"application\/pdf\" style=\"width:100%;height:600px\" aria-label=\"Embed of Kwanza Estates Limited v Jomo Kenyatta University of Agriculture and Technology (Petition E001of2024) 2024KESC74(KLR) (6December2024) (Judgment).\"><\/object><a id=\"wp-block-file--media-ff5de7e4-798a-4a11-829a-d896fab3e07d\" href=\"https:\/\/property254.co.ke\/blogs\/wp-content\/uploads\/2025\/04\/Kwanza-Estates-Limited-v-Jomo-Kenyatta-University-of-Agriculture-and-Technology-Petition-E001of2024-2024KESC74KLR-6December2024-Judgment.pdf\">Kwanza Estates Limited v Jomo Kenyatta University of Agriculture and Technology (Petition E001of2024) 2024KESC74(KLR) (6December2024) (Judgment)<\/a><a href=\"https:\/\/property254.co.ke\/blogs\/wp-content\/uploads\/2025\/04\/Kwanza-Estates-Limited-v-Jomo-Kenyatta-University-of-Agriculture-and-Technology-Petition-E001of2024-2024KESC74KLR-6December2024-Judgment.pdf\" class=\"wp-block-file__button wp-element-button\" download aria-describedby=\"wp-block-file--media-ff5de7e4-798a-4a11-829a-d896fab3e07d\">Download<\/a><\/div>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">What Happened?<\/h2>\n\n\n\n<p>In 2016, Kwanza Estates (the landlord) and JKUAT (the tenant) entered into a <strong>six-year lease<\/strong>. The rent started at <strong>Kshs. 45.5 million<\/strong> per year and would increase over time. The lease was <strong>not registered<\/strong> and <strong>had no break clause<\/strong> (meaning there was no easy way to end it early).<\/p>\n\n\n\n<p>In 2021, after COVID-19 hit hard and new government policies reduced JKUAT&#8217;s income, the university decided that running its Nakuru campus was no longer financially sustainable. JKUAT gave the landlord a <strong>three-month notice<\/strong> and <strong>tried to vacate<\/strong> the premises.<\/p>\n\n\n\n<p>But Kwanza Estates refused to accept the termination. They blocked JKUAT\u2019s attempts to move out, issued fresh rent invoices, and even sent auctioneers after the university to recover unpaid rent \u2014 arguing that the lease was still in force until April 2022.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><a href=\"https:\/\/property254.co.ke\/blogs\/vat-on-sale-of-commercial-buildings\/\" data-type=\"link\" data-id=\"https:\/\/property254.co.ke\/blogs\/vat-on-sale-of-commercial-buildings\/\">Court of Appeal clarifies\u00a0on VAT on sale of commercial buildings<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What the Courts Said<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The <strong>Environment and Land Court (ELC)<\/strong> sided with the landlord, saying the lease had no break clause and JKUAT must pay rent until the lease expired.<\/li>\n\n\n\n<li>The <strong>Court of Appeal<\/strong> overturned that, finding that COVID-19 and other unforeseen changes had frustrated the lease, and the phrase &#8220;sooner determination&#8221; in the lease allowed early exit. They ordered JKUAT to pay <strong>Kshs. 40 million<\/strong> to fix any damages to the premises but freed them from paying future rent.<\/li>\n\n\n\n<li>The <strong>Supreme Court<\/strong>, however, disagreed with the Court of Appeal and mostly agreed with the original trial court \u2014 but with important clarifications:\n<ul class=\"wp-block-list\">\n<li><strong>Force majeure<\/strong> (unforeseen major events like pandemics) can only apply if it\u2019s written in the contract \u2014 and it wasn&#8217;t in this lease.<\/li>\n\n\n\n<li><strong>Frustration<\/strong> (when unexpected events make it impossible to perform a contract) applies only in very rare cases \u2014 and COVID-19 restrictions had already been lifted when JKUAT tried to exit.<\/li>\n\n\n\n<li>The lease <strong>had no valid early termination clause<\/strong>.<\/li>\n\n\n\n<li>JKUAT\u2019s attempt to leave early <strong>was a breach of contract<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p>The Supreme Court ruled that landlords <strong>cannot force tenants<\/strong> to stay on a property they want to vacate, but they <strong>can claim damages<\/strong> for the early breach. In this case, <strong>damages \u2014 not future rent \u2014 were the correct remedy<\/strong>.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">Why This Decision Matters<\/h2>\n\n\n\n<p>The Supreme Court\u2019s ruling clears up several big questions for anyone entering a lease:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Fixed-term leases without termination clauses are risky<\/strong> for tenants. Exiting early can expose tenants to heavy damages claims.<\/li>\n\n\n\n<li><strong>Force majeure needs to be clearly stated<\/strong> in the contract. Without it, tenants cannot easily argue that events like a pandemic justify ending a lease.<\/li>\n\n\n\n<li><strong>Landlords must try to mitigate their losses<\/strong>. If a tenant leaves early, landlords should look for a new tenant rather than simply claiming full rent for the remainder of the term.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><a href=\"https:\/\/property254.co.ke\/blogs\/kra-introduces-new-system-landlords-and-property-owners\/\" data-type=\"link\" data-id=\"https:\/\/property254.co.ke\/blogs\/kra-introduces-new-system-landlords-and-property-owners\/\">KRA Introduces New System to file and pay taxes<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Practical Lessons<\/h2>\n\n\n\n<p><strong>For Landlords:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Always draft leases carefully \u2014 including provisions for early termination and penalties.<\/li>\n\n\n\n<li>If a tenant leaves early, focus on finding a replacement quickly. Courts expect landlords to <strong>minimize losses<\/strong>, not sit back and demand full rent.<\/li>\n\n\n\n<li>Understand that damages, not continued rent, are the main legal remedy if a tenant breaches a lease.<\/li>\n<\/ul>\n\n\n\n<p><strong>For Tenants:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Never assume you can walk away from a lease, even in tough times, unless the lease allows it or you can prove true frustration.<\/li>\n\n\n\n<li>If you want protection against events like pandemics or economic crises, <strong>insist on a strong force majeure clause<\/strong> when negotiating your lease.<\/li>\n\n\n\n<li>Know that you bear the burden of proving frustration \u2014 and courts apply it very strictly.<\/li>\n<\/ul>\n\n\n\n<p><a href=\"https:\/\/property254.co.ke\/blogs\/big-win-for-off-plan-investors\/\" data-type=\"link\" data-id=\"https:\/\/property254.co.ke\/blogs\/big-win-for-off-plan-investors\/\">High Court Ruling is a win for Off-Plan Property Buyers<\/a><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">Final Thought<\/h2>\n\n\n\n<p>The Supreme Court\u2019s decision in Kwanza Estates v JKUAT is a wake-up call: both landlords and tenants must be deliberate and cautious when entering lease agreements. Old tricks like drafting long leases without exit options may no longer guarantee landlords rent security. On the other hand, tenants must understand that hardship alone doesn\u2019t automatically release them from their lease obligations.<\/p>\n\n\n\n<p>Clear contracts, clear expectations, and clear remedies \u2014 that\u2019s the way forward.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"Here\u2019s EXACTLY How to Register as a Real Estate Agent in Kenya\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/KeWTZAFIwbE?start=97&#038;feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>Several years ago, lawyers and property experts started raising concerns about Kenya\u2019s outdated law governing commercial leases \u2014 the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act. Although this law was meant to protect tenants, smart lease drafting and rigid interpretations by landlords often made it very difficult for tenants to exit leases, even [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24],"tags":[],"class_list":["post-14385","post","type-post","status-publish","format-standard","hentry","category-buyer-guides"],"_links":{"self":[{"href":"https:\/\/property254.co.ke\/blogs\/wp-json\/wp\/v2\/posts\/14385","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/property254.co.ke\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/property254.co.ke\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/property254.co.ke\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/property254.co.ke\/blogs\/wp-json\/wp\/v2\/comments?post=14385"}],"version-history":[{"count":2,"href":"https:\/\/property254.co.ke\/blogs\/wp-json\/wp\/v2\/posts\/14385\/revisions"}],"predecessor-version":[{"id":14390,"href":"https:\/\/property254.co.ke\/blogs\/wp-json\/wp\/v2\/posts\/14385\/revisions\/14390"}],"wp:attachment":[{"href":"https:\/\/property254.co.ke\/blogs\/wp-json\/wp\/v2\/media?parent=14385"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/property254.co.ke\/blogs\/wp-json\/wp\/v2\/categories?post=14385"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/property254.co.ke\/blogs\/wp-json\/wp\/v2\/tags?post=14385"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}