Commercial Lease Renewal and Controlled Tenancies: What Landlord and Tenant Must Do When the Lease Ends

In short, a commercial lease in Kenya ends in one of two worlds. If the tenancy is controlled under the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, Cap 301, which it is whenever the lease is unwritten, is written for five years or less, or is written for longer but lets the landlord end it within five years, the landlord is unable to end it, raise the rent or change its terms except by a notice in the prescribed form, on one of seven statutory grounds, with at least two months to run, and the tenant has the right to take the notice to the Business Premises Rent Tribunal, which decides. If the tenancy is not controlled, the lease governs, the Land Act, 2012 fills the gaps, and a tenant who stays on after the term with the landlord’s consent becomes a periodic tenant, and often a controlled one. Either way a lock-out is unlawful, and the landlord who changes the locks pays the tenant damages. This article explains how to tell which world you are in, what each side must do before and after the expiry date, and how a tenant is removed lawfully when it comes to removal.

Who this is for

You own a building on Kimathi Street, Moi Avenue or Ngong Road, or a row of shops in Kitengela, and a tenant’s lease expires this year. You want a higher rent, or the space back for a better tenant, or the building empty so you rebuild. Or you are the tenant, with a restaurant, a pharmacy or a hardware shop whose goodwill is the location, and the landlord has written to say the rent doubles or the lease will not be renewed. Both of you are about to find out whether the tenancy is controlled, and most of what follows turns on the answer.

The five-year trap

Section 2 of Cap 301 defines a controlled tenancy as a tenancy of a shop, hotel or catering establishment which has not been reduced into writing, or which has been reduced into writing and is for a period not exceeding five years, or contains provision for termination, otherwise than for breach of covenant, within five years of its commencement. A tenancy to which the Government or a county is a party is excluded. Shop is defined widely and takes in offices, warehouses, workshops and most premises where a business is carried on.

Read the definition again, because it catches leases which were drafted to avoid it. A written lease for exactly five years is controlled. A written lease for ten years with a clause letting the landlord terminate on six months’ notice in year three is controlled, because it provides for termination within five years otherwise than for breach. A lease for five years and one month, with no break clause except for breach, is not controlled, which is why the leases we draw for landlords run for five years and one month, and why a landlord who has been handed a tenant’s five-year form should read it before signing. And a tenant who has occupied for eight years under a lease which was never signed, paying rent every month, is a controlled tenant whatever the unsigned draft said.

What control means

A controlled tenant has security of tenure. The landlord is unable to terminate the tenancy, or alter its terms to the tenant’s disadvantage, including by raising the rent, except by a notice under section 4 of the Act. The notice must be in the prescribed form, Form A under the Tribunal regulations, must state the ground relied on, and must give a termination date not less than two months after the tenant receives it. The grounds are in section 7, and there are seven. The tenant has failed to keep the premises in repair in breach of the lease. The tenant is more than two months in arrears of rent, or has persistently paid late. The tenant is in substantial breach of another obligation. The landlord has offered suitable alternative accommodation. The premises are part of a larger holding the landlord wishes to let as a whole. The landlord intends to demolish or reconstruct the premises, or carry out substantial work which is impossible with the tenant in occupation. Or the landlord intends to occupy the premises for his own business or as a residence, for at least a year.

The tenant then has one month from receipt to tell the landlord in writing whether he agrees. If he says nothing the notice takes effect on its date and the tenancy ends or the new terms apply. If he objects, he must refer the matter to the Business Premises Rent Tribunal before the notice expires, and the reference suspends the notice until the Tribunal decides. The Tribunal, under section 12, decides whether the tenancy is controlled, whether the ground is made out, what the rent should be, and whether the landlord recovers possession, and it awards costs. Either side appeals to the Environment and Land Court within thirty days.

The Tribunal reads notices strictly. In Mucira v Sankale, Tribunal Case E605 of 2025, decided on 28 July 2025, a landlord served a letter terminating a KES 65,000 a month tenancy for unauthorised renovations, subletting and arrears. The letter was not in the prescribed form, sought to terminate at once rather than after two months, and did not invite the tenant’s reply. The Tribunal held the notice unlawful, restored the tenant to quiet possession and ordered the landlord to pay costs, and it cited the settled line of authority under which a defective notice is void and is not cured by the tenant having understood it. A landlord who wants a controlled tenant out serves a valid notice or does not start.

When the lease is not controlled

A lease for more than five years with no early break is governed by its own terms, and the Land Act, 2012 supplies what the lease leaves out. Renewal is whatever the lease says. Most leases we draw give the tenant an option to renew on written notice served within a window, commonly not less than six months and not more than nine before expiry, at a rent to be agreed or fixed by a valuer, and conditional on the tenant not being in breach. The option is exercised in the manner and the time the lease requires or it is lost, and a tenant who telephones the landlord in the last month has not exercised it. A landlord who does not intend to renew says so in writing before the window closes.

The danger for the landlord is the day after expiry. Under section 57 of the Land Act a lessee who remains in possession with the lessor’s consent after the term has expired holds as a periodic tenant, and the period is the period for which rent is paid, so a tenant paying monthly holds from month to month and is entitled to a month’s notice. This much is manageable. What is not manageable is the next step. A monthly tenancy of a shop which exists by conduct and has never been reduced to a new written lease is a tenancy which has not been reduced into writing, and so it is a controlled tenancy under section 2 of Cap 301. The landlord who let a ten-year lease expire, accepted rent for eighteen months while the parties talked, and then wrote to say the tenant must leave, has converted a lease he controlled into a tenancy he does not, and now needs a section 7 ground and a Tribunal.

So the rule for a landlord is simple. Before the expiry date, either a new written lease for more than five years is signed, or a written notice to quit at expiry is served and rent after expiry is refused or accepted expressly as mesne profits without prejudice, in writing, every month. Silence and a bank transfer are how landlords lose buildings.

The landlord’s steps

1. Find the expiry date and diary nine months before it. Read the lease for the term, the renewal option and its window, the rent review, the break clauses and the forfeiture clause. Confirm whether the tenancy is controlled by the test above, and if you are not sure, assume it is until we have read the documents.
2. Decide what you want. A renewed lease at a market rent, a new tenant, or vacant possession to rebuild. Each has a different route, and the route for a controlled tenant is narrower. Redevelopment is a section 7 ground only where the landlord intends it and is able to show plans, approvals and funding, and the Tribunal asks.
3. If renewing, sign before expiry. A new lease for five years and one month or longer, with the rent reviewed to market, an annual escalation, the deposit topped up, the user and assignment clauses tightened, and the landlord’s costs of the lease paid by the tenant as the market allows. The lease is stamped, and registered where its term requires registration, before the old one ends. Our fee for a new commercial lease is on the Advocates Remuneration Order scale on the annual rent and is quoted in advance.
4. If not renewing a non-controlled lease, serve notice and refuse rent. A written notice stating the lease ends on its date and no new tenancy is offered, served in the manner the lease provides. After expiry, accept nothing except sums expressly received as mesne profits without prejudice, and put it in writing each time.
5. If the tenancy is controlled, serve Form A. The notice states the ground, gives at least two months, invites the tenant’s reply within one month and is served so receipt is provable, by hand against signature, by registered post and by e-mail to the address in the lease. Keep the evidence of service. A notice to raise the rent follows the same form and the same timetable.
6. If the tenant refers the matter, prepare for the Tribunal. The reference is filed before the notice expires, and the hearing turns on evidence. For arrears, the rent ledger and the demands. For breach, the lease and the photographs. For redevelopment, the plans, the county approval and the funding. For own occupation, the business plan and the reason the landlord’s existing premises will not do. The Tribunal sits in Nairobi and on circuit, and a contested reference takes from six months to a year and a half.
7. Enforce through the Tribunal or the court, never by hand. A possession order from the Tribunal or the court is executed by a licensed auctioneer or court bailiff on notice. A landlord who changes the locks, removes the doors, disconnects the water or the power or has the tenant’s goods carried into the street commits a trespass, and often an offence, and the Tribunal and the Environment and Land Court award damages for it and order the tenant back in. This is so even where the lease has expired and the tenant has paid nothing for months.

The tenant’s steps

1. Know whether you are controlled. If you are, the landlord needs a ground and a valid notice to end the tenancy or raise the rent, and a letter which is not in the prescribed form, or which gives less than two months, is not a notice at all. If you are not, the lease is your only protection, and its renewal window is the date which matters.
2. Exercise the option exactly. Serve the renewal notice in the form, at the address and within the window the lease specifies, and keep proof of service. Clear any arrears before you serve, because most options are conditional on the tenant not being in breach.
3. Answer a Form A notice within a month and refer it before it expires. Both dates are fatal. A tenant who objects in writing but does not file the reference in time has agreed to leave, and the Tribunal will not extend the period. File on the objection, on the ground, and on the rent, because the Tribunal fixes a fair rent where the landlord’s figure is not the market.
4. Pay the rent on time, into the account, and keep the receipts. Two months’ arrears or persistent late payment is the ground landlords use most, and it is the one the Tribunal grants most readily. A tenant in dispute pays the undisputed rent while the dispute runs, and pays it into court or the Tribunal where the landlord refuses it.
5. Document the goodwill and the fittings. Cap 301 gives no statutory compensation for the loss of a business on termination, so a tenant’s protection for the fit-out and the goodwill is the lease, which should provide for the landlord to pay for improvements he consented to, or for the tenant to remove them. Photograph the premises at the start and the end.

How to evict a tenant legally in Kenya

The question arrives in our inbox every week, usually from a landlord who has already tried the wrong way. The lawful way depends on the tenancy.

For a controlled business tenancy, the route is the section 4 notice on a section 7 ground, the tenant’s month to reply, the reference if he objects, the Tribunal’s order for possession, and execution of the order by an auctioneer on notice. Nothing else works, and the two months in the notice run from receipt, not from the date typed at the top.

For a business lease which is not controlled, the route is the lease. Where the tenant is in breach, the landlord serves the notice section 75 of the Land Act requires before forfeiture, of not less than thirty days, specifying the breach and requiring it to be remedied within a reasonable period, and only when the period has passed does the right of re-entry arise. The tenant applies to court for relief against forfeiture under section 76 and usually gets it on paying the arrears and costs, so the landlord who wants the premises rather than the rent pleads the case for refusing relief. In practice the landlord sues for possession and mesne profits in the Environment and Land Court or the magistrate’s court by value and executes the decree, because a peaceable re-entry which turns out not to have been peaceable is an eviction the court reverses. Where the lease has simply expired and the tenant holds over, the periodic tenancy is ended by a notice not less than the period, and the suit follows if he stays.

For rent arrears without eviction, the Distress for Rent Act allows a landlord to levy distress on the tenant’s goods on the premises through a licensed auctioneer, who proclaims the goods and sells them after the period the Auctioneers Rules prescribe. Distress is fast and it is lawful, and it is also the remedy most often abused, so the auctioneer’s licence, the proclamation and the inventory are checked, the goods of third parties are left alone, and a controlled tenant is told the Tribunal has power to stop a distress it considers oppressive.

For a residential tenant, Cap 301 does not apply. Where the rent is KES 2,500 a month or less the Rent Restriction Act applies and the Rent Restriction Tribunal controls the tenancy. Above the figure, which is nearly every tenancy in Nairobi, the tenancy agreement governs, a monthly tenant is entitled to a month’s notice under section 57 of the Land Act unless the agreement provides longer, and a tenant who does not leave is removed by a suit for possession and a court order executed by a bailiff. The three-month newspaper notice under sections 152B to 152G of the Land Act is for unlawful occupiers and squatters, not for a tenant whose lease has ended, though the courts apply its humane-eviction principles, daylight hours, no demolition of belongings, notice to the county, to every eviction they supervise.

And for every tenant, business or residential, the same prohibition. No lock-out, no removal of doors or roofing sheets, no disconnection of water or electricity, no goods on the pavement, no hired youths. Each is a trespass and most are offences under the Penal Code, and a landlord who does any of them turns a tenant with no defence into a plaintiff with a claim for general damages, which the courts assess in the hundreds of thousands of shillings and, for a business tenant whose stock was lost, in the millions.

What is coming

The Landlord and Tenant Bill, 2021 passed the National Assembly in 2022 and would repeal Cap 301, the Rent Restriction Act and the Distress for Rent Act and replace them with one statute, a single tribunal under the Chief Justice, a ninety-day notice before any rent increase and a twenty-four month notice to end a business tenancy without grounds. As at February 2027 it has not become law. Until it does, the five-year trap, Form A and the Tribunal are the rules, and the leases signed this year should be drawn for them.

Questions we are asked every week

What is a controlled tenancy in Kenya?

A tenancy of a shop, hotel or catering establishment which is unwritten, or is written for five years or less, or is written for longer but lets the landlord end it within five years for a reason other than breach. Under Cap 301 the landlord ends it or raises the rent only by a Form A notice on a statutory ground, which the tenant is entitled to refer to the Business Premises Rent Tribunal.

Is a five-year commercial lease a controlled tenancy?

Yes. The Act catches leases for a period not exceeding five years. A lease for five years and one month with no early break clause except for breach is outside the Act, which is why landlords’ leases are drawn for the longer term.

How much notice must a landlord give a business tenant in Kenya?

For a controlled tenancy, not less than two months from receipt, in the prescribed form, stating a section 7 ground. For a non-controlled lease, whatever the lease says, and for a tenant holding over after expiry, a notice not less than the period for which rent is paid.

Is a landlord allowed to raise the rent on a controlled tenancy?

Only by a Form A notice giving at least two months, which the tenant is entitled to refer to the Tribunal within the notice period. The Tribunal then fixes the rent, and it looks at the market, not at the landlord’s letter.

What happens if the tenant stays after the lease expires?

If the landlord accepts rent, the tenant becomes a periodic tenant under section 57 of the Land Act, and a periodic tenancy of a shop which is not in writing is a controlled tenancy. The landlord should sign a new lease or serve notice before expiry, and refuse rent afterwards.

Is it legal for a landlord to lock out a tenant in Kenya?

No. A lock-out, a disconnection of utilities or a removal of the tenant’s goods without a Tribunal or court order is a trespass and usually an offence, whether or not the rent is paid, and the tenant recovers possession and damages.

How long does it take to evict a business tenant through the Tribunal?

Two months for the notice, a month for the reply, and six months to eighteen months for a contested reference and the order, followed by execution. An uncontested notice ends the tenancy on its date.

Next step

Send us the lease, or the letters if there is no lease, and the rent record, by e-mail to peter@pmlaw.co.ke or WhatsApp through +254 714 644 080. We reply within one working day with whether the tenancy is controlled, what notice or renewal step is needed and by when, and a fixed fee for the notice, the new lease or the Tribunal reference. Nothing is charged until you instruct us.

Peter Maina is a Partner of Peter Maina & Company Advocates, Hazina Towers, Nairobi. He is an Advocate of the High Court of Kenya practising in conveyancing and real estate, corporate and commercial, and capital markets law, and acts for landlords and tenants on commercial leases, renewals and Business Premises Rent Tribunal references in Nairobi and the coast.