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Kenya: Measure in Parliament to Stop Landlords from Auctioning Their Tenants’ Property

(Feb. 27, 2012) Kenya's Parliament is gearing up to begin debate on the Land Bill 2012, which, among other objectives, seeks to drastically change the landlord-tenant relationship in the country. If enacted in its current form, the bill would require landlords to seek termination of lease contracts in court to recover overdue rent. (Bill to Tame Auctioneers Runs into Opposition, DAILY NATION (Feb. 23, 2012).)

Currently, landlords are allowed to seize and sell belongings of defaulting tenants through auctioneers, to recover rent arrears. The Distress for Rent Act of 1938 makes this possible; it provides that “any person having any rent or rent service in arrear [sic] and due upon … a lease” has the right to a “remedy by distress for the recovery of that rent or rent service.” (The Distress for Rent Act, § 3(1), 6 LAWS OF KENYA, Cap. 293 (LexisNexis, rev. ed., 2009), KENYA LAW REPORTS.) The Act further states:

Where any goods or chattels are distrained for rent reserved and due upon a grant, demise, lease or contract, and the tenant or owner of the goods or chattels so distrained does not, within fourteen days after distress has been made, … pay the rent together with the costs of the distress, or replevy them, with sufficient security to be given to the licensed auctioneer according to law, the person distraining may lawfully sell on the premises or remove and sell the goods and chattels so distrained for the best price which can be obtained for them, towards satisfaction of the rent for which they are distrained, and of the charges of the distress, removal and sale, handing over the surplus (if any) to the owner. (Id. § 4(1).)

This current law places very few restrictions on landlords and/or auctioneers. Among the restrictions is the ban on distress between dusk and dawn. (Id. § 3(2).) The Act also exempts certain items from distress, including those “in actual use or occupation” of the tenant, clothing, and bedding, as well as tools of the tenant's trade whose value may not exceed US$1. (Id. § 16(1).)

Reaction to the bill has been mixed. Resident associations, including the Kenya Alliance of Resident Associations, whose chief executive recently accused auctioneers of brutality and thuggery, are pleased with the measure. (DAILY NATION, supra.) Others appear less than content with the bill; the Kenya Property Development Association (KPDA) expressed concern over the measure, but seems open to a compromise. Elizabeth Maina, KPDA's administrator, called for a mechanism that would fast-track court petitions for recovering unpaid rent to be put in place if the Distress for Rent Act is abolished. (Id.)

KPDA's concern is shared by the Land Development and Governance Institute (LDGI), a non-profit organization that claims not to be aligned with any of the parties on either side of the issue. (Id.; What Is LDGI?, LDGI website (last visited Feb. 23, 2012).) LDGI warned that the elimination of distress for rent, an important remedy on which landlords currently rely, may discourage investment in the real estate industry. (DAILY NATION, supra.) LDGI further noted that because the court system cannot be a reliable replacement for distress for rent, the Distress for Rent Act should remain in place and the focus should be on issuing tighter regulations to ensure that auctioneers' practices are humane. (Id.)

The average rate of default on rent payments today, according to the Institution of Surveyors of Kenya, is about 30%, although anecdotal evidence seems to suggest an even higher rate. (Id.)