Ask a Lawyer: Why Does the Registration of Lease Agreements Matter?

 
It is important to note that while the registration of leases is not a legal prerequisite for the recognition of a legal contract between a lessor and lessee, an unregistered lease may be valid between the parties but will offer no protection against third parties to the agreement.

The Land Registration Act, 2012, in S.36(2) essentially confirms that nothing shall be construed as preventing any unregistered instrument (lease) from operating as a contract. There is also legal precedent to support this position.

If the law does not demand the registration of leases, why should a lease be registered? A formal lease document is important for several reasons

Strengthening the Formal, Written Record Provides Legal Recognition of the Lease:
First, registering the written record of the agreement between the lessor and lessee provides irrefutable proof and evidence of the agreement. In the event of any dispute, it is easier to clarify the agreement and find a resolution.

Recognition and Protection of The Rights & Interests of Both Parties
Second, the formal registration of leases can help to protect the rights and interests of both the lessor and lessee. A registered lease confirms the agreement between the parties, and the rights and responsibilities of each party, as well as offering them protections they would otherwise be unable to claim. This can help ensure that both parties are treated fairly and their rights are respected, more so where third-party rights are entered against the property.

Protection Where Third-Party Rights Subsist
Third, registration of leases may not only facilitate transactions that may require collateral against property but also creates legal, evidentiary support proof of the agreement between the parties. The registration of a lease may also inform the parties to the agreement of any prior or superseding rights that may take precedence over the property. For example, the lease may include provisions that protect the landlord from liability if the tenant causes damage to the property or that protect the tenant from being evicted without cause. For the lessee, attempting to register the lease may expose an undeclared prior right over the property, for example, a charge or a preregistered encumbrance on the property.

Professionalism
Finally, the registration of leases can help in establishing or asserting good governance measures in the conduct of business affairs that may be necessary, especially in corporate setups. This can be beneficial for both parties, as it can help to ensure that the agreement is conducted in a smooth and orderly manner.

A simple illustration of the importance of registering lease agreements is that a registered lease creates an encumbrance on the property, the effect of which is that the lessee cannot, for example, sub-let, charge or part with possession of the land leased or any part thereof without the written consent of the lessor.

Likewise, the lessor cannot interfere with the lessee’s rights created under the registered lease. For example, the lessor cannot arbitrarily transfer ownership of the property to a third party where the encumbrance subsists.

To register a lease, the parties submit the relevant documents in the prescribed form identifying the parties to the agreement, the specific property that is the subject of the lease including information such as the tenure, size, location and any other pertinent details of the property, the duration or tenure for lease, the specified lease amount agreed upon and any other information as prescribed.

Upon registration, the lease becomes a matter of public record entered against the title deed of the property. Registering a lease helps to ensure that the lessors ownership rights are recognized and that the lessee’s rights to occupy the property are enforceable.

On determination on refund of security deposits by the Small Claims Court: The case of Muhanda v LP Holdings Ltd (Civil Appeal E256 of 2023) [2025] KEHC 393 (KLR)

The Small Claims Court (SCC) established under Section 4 of the Small Claims Court Act, CAP 10 A, as a specialized commercial court, has, in the past, been hesitant to entertain claims for security deposit refunds. The SCC previously declined jurisdiction in Nairobi Small Claims Court Case SCCOMM No. 5354 of 2023) judgment that it did not have jurisdiction over rental security deposit claims. However, a landmark decision by the High Court in Muhanda v LP Holdings Ltd (Civil Appeal E256 of 2023) [2025] KEHC 393 (KLR) (Commercial and Tax) (23 January 2025) has now clarified that the Small Claims Court has jurisdiction over such claims.

 

The High Court determined that refund of security deposits falls within the category of “a contract for money held and received” under Section 12(b) of the Small Claims Act (No. 2 of 2016). The judgment also noted that the matter had initially been declined by the Small Claims Court on jurisdictional grounds. However, Justice Helene R.  Namisi, after finding that the Small Claims Court has jurisdiction, referred the matter back to the SCC to be heard and determined on its merits by a different adjudicator.

 

This ruling is a significant relief for tenants as the Small Claims Court Act was specifically designed to simplify legal procedures and allow individuals, including those without legal representation, to file claims efficiently. Section 12 of the Act provides that the court has jurisdiction over claims for:

• Contracts for the sale and supply of goods or services.
• Contracts relating to money held and received.
• Compensation for personal injuries.
• Recovery of movable property.
• Liability in tort in respect of loss or damage caused to property.

One of the key advantages of the Small Claims Court is its pecuniary jurisdiction, which covers claims of up to Kshs 1,000,000, as provided under Section 12(3) of the Small Claims Act. Furthermore, the court is statutorily required to expeditiously resolve cases within 60 days from the date of filing the claim, making it a highly efficient option for tenants seeking a quick resolution to their disputes.

Section 4 of The Landlord and Tenant (Shops, Hotels and Catering Establishments) Act CAP 301: Termination of and alteration of terms and conditions in controlled tenancy

 (1) Notwithstanding the provisions of any other written law or anything contained in the terms and conditions of a controlled tenancy, no such tenancy shall terminate or be terminated, and no term or condition in, or right or service enjoyed by the tenant of, any such tenancy shall be altered, otherwise than in accordance with the following provisions of this Act.
(2) A landlord who wishes to terminate a controlled tenancy, or to alter, to the detriment of the tenant, any term or condition in, or right or service enjoyed by the tenant under, such a tenancy, shall give notice in that behalf to the tenant in the prescribed form.
(3) A tenant who wishes to obtain a reassessment of the rent of a controlled tenancy or the alteration of any term or condition in, or of any right or service enjoyed by him under, such a tenancy, shall give notice in that behalf to the landlord in the prescribed form.
(4) No tenancy notice shall take effect until such date, not being less than two months after the receipt thereof by the receiving party, as shall be specified therein:
Provided that—
(i) where notice is given of the termination of a controlled tenancy, the date of termination shall not be earlier than the earliest date on which, but for the provisions of this Act, the tenancy would have, or could have been, terminated;
(ii) where the terms and conditions of a controlled tenancy provide for a period of notice exceeding two months, that period shall be substituted for the said period of two months after the receipt of the tenancy notice;
(iii) the parties to the tenancy may agree in writing to any lesser period of notice.
(5) A tenancy notice shall not be effective for any of the purposes of this Act unless it specifies the grounds upon which the requesting party seeks the termination, alteration or reassessment concerned and requires the receiving party to notify the requesting party in writing, within one month after the date of receipt of the notice, whether or not he agrees to comply with the notice.
(6) A tenancy notice may be given to the receiving party by delivering it to him personally, or to an adult member of his family, or to any other servant residing within or employed in the premises concerned, or to his employer, or by sending it by prepaid registered post to his last known address, and any such notice shall be deemed to have been given on the date on which it was so delivered, or on the date of the postal receipt given by a person receiving the letter from the postal authorities, as the case may be.

Ask A Lawyer: How is an intestate estate distributed in cases where the deceased had no spouse(s) or children?

Response:

Section 39 of the Act provides that where the deceased is neither survived by a spouse nor children, his/her net intestate estate will devolve upon his/her blood relatives in the following order: father, or if dead; mother, or if dead; siblings and any of their children in equal shares, or if dead; half-siblings and any of their children in equal shares, or if none; any other relatives up to the sixth degree
of consanguinity.


It is important to note, however, that section 39 of the Act is among the provisions that were recently declared unconstitutional in the case of Ripples International v Attorney General & another; FIDA (Interested Party) (Constitutional Petition E017 of 2021) [2022] KEHC 13210 (KLR) (29 September 2022) (Judgment) for being discriminatory on the basis of gender.

Ask A Lawyer: How is an intestate estate distributed in cases where the deceased was polygamous?

Response:

Section 40 of the Act provides that in cases of polygamy, the deceased’s personal and household effects and the residue of the net intestate estate should be divided among the houses according to the number of children in each house but adding any wife as an additional unit to her children.
 

Such that if X had 2 wives, A and B, with A having 3 children and B having 4 children, the property would be distributed among a total of 9 units, taking into account the foregoing provisions, such that the ideal ratio would be 4:5. The rationale is that house A has a total of 4 units, while house B has a total of 5 units.
 

However, the Court of Appeal in the case of Rono v Rono (2005) eKLR noted that equity is not necessarily equality, such that the Court would consider each case on its facts, including the peculiar needs/positions of each child in each house, e.g. a young or yet-to-be educated child would probably require a greater share than a child who is well settled in life.

About the Small Claims Court

A Small Claims Court is a specialized commercial court created by statute with specific duties and powers designed to provide a judicial determination involving small amounts of money. World over, the courts are characterized by simplicity of procedure, cost effectiveness and speedy resolution of disputes thereby enhancing access to and expeditious delivery of justice.

In line with the Small Claims Court Act, 2016 the Judiciary has operationalized the Small Claims Courts (SCCs). The underpinning logic behind the establishment and subsequent operationalization of the Small Claims Courts is to enhance the access to and expeditious delivery of justice and to further provide a platform within the justice system where civil and commercial disputes whose value does not exceed Kshs 1 million are dealt with in a simple, efficient and cost-efficient manner. The establishment of the court was also part of a wider initiative to enhance the ease of doing business in the country, by creation of an enabling environment for the Small and Medium Enterprises SMEs to thrive by reducing the cost and time for enforcement of commercial disputes.

 

The operationalization of the SCCs is also aimed at the creation of a people centric approach to access to justice by affording the citizenry justice services that were accessible, inclusive, efficient, timely and responsive to specific access needs of particular groups likely to suffer from social and economic disadvantage. It had largely been observed that hefty court fees, complexity of procedures and delays in determination of cases contributed to barriers to access to justice more so to the marginalized, vulnerable and those with complex needs. The scale up access to justice as envisioned is then able to create and prioritize basic and community level justice. The operationalization of the SCCs is therefore designed to contribute towards achieving equality, poverty reduction and social inclusion by ensuring that all persons have equal access to fair and timely justice.

 

Courtesy of: The Judiciary of Kenya

Ask A Lawyer: Does section 7 of the Act apply to Oral Wills?

Response:

Yes, it does.

Section 7 of the Act deems void any Will that is created under fraud, coercion, importunity or mistake.

The definition of a Will under section 3 of the Act encompasses both Written and Oral Wills. 

As such, Oral Wills will also be voided upon proof of fraud, coercion, importunity or mistake.