City Landlords Rush to Sue & Auction Property After Tenants Vanish With Arrears

Auctioneers seize property at a past raid in Kenya.
Auctioneers seize property during a past raid in Kenya.

Landlords in Nairobi, Nakuru, Mombasa and Kisumu city are rushing to sue tenants and auction their property following a surge in defaults.

On Thursday, March 23, a Nakuru-based landlord indicated that other property owners are lodging legal battles following a new scheme where tenants disappear with accrued rent arrears.

He argued that auctioning property and taking legal action was the  only way to recoup the debts.

A block of apartments in Nairobi, Kenya.
A block of apartments in Nairobi, Kenya.
Photo/ Rent Kenya

Failing to Honour Goodwill

The landlord, who lamented over losing a substantial amount of money, indicated that some tenants had failed to honour goodwill, forcing him to file a legal suit.

A high default rate also pushed him to enter a deal with auctioneers to help him recover rent and avoid further losses.

"The work of pursuing these rent defaulters is not easy especially when you live far away from them. They (defaulters) take this advantage to disappear with our money," he stated.

"Some of them don’t honour the goodwill they enjoy from us,” he added.

In Kisumu City, a landlord was compelled to auction a tenant's undergarments to recover part of the unpaid rent.

Through the Nyaluonyo Auctioneers, the landlord placed an advertisement in a local daily planning to sell four ladies’ underwear, four men’s underwear, two hip enlargements, two kids bags, and three eye adhesives at a public auction on February 7, 2023.

Reports indicated the tenant had accrued Ksh120,000 in rent arrears.

In 2022, Environment and Land Court saved a landlord in Karen estate from refunding a tenant Ksh27 million he spent on repairs of a posh mansion.

The tenant sought to buy the house at Ksh85 million, but the deal flopped, forcing him to sue the landlord. In court, it was established that the landlord had terminated his lease agreement.

"He is not lawfully in occupation of the premise as a tenant after the landlord terminated his lease agreement. He must vacate within 90 days, failure to which the landlord will be at liberty to apply for an eviction order," the court ruled.

Handing Over Management to Real Estate Agents

A file footage of residential houses
A file footage of residential houses in Nairobi.

Due to default and instances of tenants vanishing with rent arrears, a section of city landlords resolved to hand over property management to real estate agents.

Nakuru landlady, Wambui Kiama noted that real estate agents had helped them navigate legal battles with tenants and even recover rent money through auctions.

"It gives me an easier time as the role of chasing rogue tenants has been left to the private agencies," Kiama stated.

"When the tenants occupy our houses in the initial stages, we hardly know their characters, but after a certain period is when we come into terms with the realities from them (tenants)," she added.

Bill Protecting Tenants

However, the Landlord and Tenant Bill of 2021 was tabled, requiring landlords to file a case at the Rent Tribunal and get a ruling ahead of the auction.

"No landlord shall, without legal process, seize a tenant's property for default in the payment of rent or for the breach of any other obligation of the tenant," the Bill read in part.

It was expected to repel the Distress for Rent Act which empowered landlords to auction rent defaulters after issuing a 14-day notice.