Landlords have developed an array of techniques to hike rent and maximise their returns on rental properties, often triggered by the high cost of living.
These strategies often exploit the legal loopholes within the constitution and take advantage of the supply and demand dynamics allowing landlords to push the boundaries by charging prices that align with market rates.
This also calls for tenants to be well-versed in the law to ensure they avoid such scenarios, especially after moving in.
New amenities
Real estate developers are adopting several technologies including the soundproofing technique which shields tenants from excessive noise, especially in areas located near the Central Business District (CBD).
With the addition of new features, Collins Maroa Chacha, a realtor, revealed to Kenyans.co.ke that landlords often set higher rates to align with the quality of services.
"The soundproof technique is ideal for a house in close proximity to the CBD. In such cases, however, for a contractor to be given approval he needs to either install low-density polyethylene insulation for walls and ceilings or double-glazed windows," he stated.
By going beyond the standard amenities, landlords offer a range of services that provide conveniences such as in-unit laundry facilities, rooftop gardens, heated swimming pools, and an open bar space.
Some also provide extra services such as package delivery and pet-friendly facilities to enhance the overall quality of life for tenants and create a sense of community to foster loyalty.
"When a tenant moves in, you are issued with an inventory of the house essentials by the landlord but in other cases, some landlords opt to introduce these amenities at a reasonable hike in rent," he pointed out.
Legal Loophole
Unknown to many, a law enshrined in the constitution protects landlords from economic shocks allowing them to increase rent either annually or once in two years depending on the premises.
According to the Rent Restrictions Act, 2010, a landlord may increase rent once every 12 months for residential premises and once every 24 months for business premises provided they issue a written notice to the tenant 90 days prior.
Failure to give notice will render the hike invalid. Further, when a tenant fails to object to the notice within 30 days of receipt, they are deemed to have accepted the increase.
Inflation
The landlord can also increase the rent to cushion himself from inflation rates or a situation where land rates increase over time.
Maroa, however, indicated that structural repairs cannot be used as a basis for rent increments. Jason Katungi, who recently spoke to Kenyans.co.ke, revealed that landlords usually increase rent at a flat rate of 5 per cent annually.
“The Rent Tribunal gives us permission to increase the rate every year depending on inflation and repairs we make on the rentals. While the rent increase varies depending on the house owner, majorly we increase by 5 per cent every year,” he stated.
Rent in Dollars
Several residential buildings adopted the trend of setting rent prices in dollars and hiking the prices to accommodate the exchange rates. Maroa opined that the trend is also a strategic move to remain competitive and attract an international clientele.
According to the Knight Frank report titled Kenya Market Update published in February 2023, there was a growing preference from investors to have rent in dollars owing to inflationary pressures and weak shilling.
The current inflation rate stands at eight per cent, according to the Central Bank of Kenya (CBK) - a rise from the previous 7.9 per cent recorded in April 2023.
CBK attributed the increment to a rise in fuel prices which subsequently led to a hike in food prices.
