TENANTS RIGHTS
TENANT? WHAT ARE YOUR RIGHTS!
The recent High Court decision in Muhanda v LP Holdings Ltd [2025] KEHC 393 (KLR) marks a significant turning point in Kenyan tenancy law. This landmark decision delivered on January 23, 2025 by Justice Helene Namisi. extended jurisdiction of the Small Claims Court on tenancy-related matters. Muhanda v LP Holdings Ltd clarified that post-tenancy claims, particularly those regarding deposit refunds, are contractual and not rent-related, thereby setting precedent.
Background of the Case
Michelle Muhanda, the appellant, had rented property from LP Holdings Ltd from February 2015 to October 2022. Upon vacating the premises, she asked LP Holdings Ltd a refund of her deposit totalling to KShs 230,000. The landlord, however presented an inflated bill amounting to KShs 271,857.60 for alleged repairs, refusing to refund the deposit. Muhanda argued that she had left the property in good condition and that the company had ignored her request for a joint inspection. After failed attempts to settle the matter amicably, she went ahead and filed a claim in the Small Claims Court seeking the refund along with punitive damages under the Consumer Protection Act as well as damages for breach of contract. LP Holdings Ltd raised a preliminary objection, arguing that rental deposit claims were outside the jurisdiction of the Small Claims Court, as per Section 12 of the Small Claims Court Act relying on the decision in Christofferson v Kavneet Kaur Sehmi t/a the Random Shop (Civil Appeal E036 of 2022) KEHC 14035 (KLR). The trial magistrate upheld this objection, ruling that the court lacked jurisdiction. Aggrieved by this decision, Muhanda appealed to the High Court.
High Court’s Decision
The Small Claims Court decision was overturned affirming that a rental deposit refund falls within the purview of ‘money held and received’ under Section 12(1)(b) of the Small Claims Court Act. The judge emphasized that since the landlord-tenant relationship had ended, the claim was contractual rather than rental-related, thus squarely within the court’s jurisdiction.
What are the implications of the ruling?
This decision affects both tenants and landlords. For tenants, it creates a clearer path to recovering withheld deposits through the Small Claims Court system which offers a faster and more economical solution than traditional courts. On the other hand, the decision acts as a warning to landlords regarding their handling of security deposits as they can no longer arbitrarily withhold deposits or present unsubstantiated claims for repairs.
Conclusion
This ruling is a game changer for Kenya’s rental market. By affirming that rental deposit disputes fall under the Small Claims Court’s jurisdiction via Section 12(1)(b), the High Court has strengthened tenant rights and simplified access to justice. The decision sets a bold precedent: post-tenancy financial claims are contractual, and they deserve swift, fair resolution. For tenants, it means empowerment; for landlords, it means accountability. As this precedent takes hold, we move toward a more balanced and just rental landscape in Kenya.