KENYA Law and Practice Contributed by: Anne Kinyanjui and Bonface Abuya, DLA Piper Africa, Kenya (IKM Advocates)
• Section 74 of the LA prescribes the landlord’s right of forfeiture if a tenant breaches the terms of a lease, is adjudicated bankrupt or goes into liquida - tion (as applicable). The provision is not manda - tory, and the parties can exclude it in their lease. However, in any event where the landlord invokes the right of forfeiture, they must comply with the notice requirements under Section 75 of the LA. Further, Section 76 of the LA permits the tenant to apply to court for reliefs against the landlord’s right of forfeiture. • Section 3 of the DRA provides for the landlord’s right of distress when rent is in arrears. Distress for rent involves appointing a licensed auctioneer to seize the tenant’s assets for purposes of sale to recover the rent owed. The DRA prescribes the notice requirements, goods that may be seized, time for levying distress and procedures to be fol - lowed. The tenant may challenge the distress pro - ceedings if the proper procedures are not followed. 7. Construction 7.1 Common Structures Used to Price Construction Projects The price of construction projects is determined by the procurement method. For government-related contracts, competitive bidding is generally required, so it is preferable for the price of the project to be fixed or capped. The price would typically include the construction costs and professional fees for the pro - ject team. For negotiated contracts, there is more flexibility on pricing. The cost may be estimated but free of any cap. The parties may also enter a cost-reimbursable agreement, which would cushion a contractor if the construction costs exceeded the estimates. 7.2 Assigning Responsibility for the Design and Construction of a Project The design and construction of a project may be allo - cated as follows. • The project proponent may undertake the plan - ning aspect of the project in-house in consultation with relevant professionals, including architects
and engineers. In the case of government projects, public participation will be required in the design process. Once the design is approved, the project proponent invites bids for construction in accord - ance with the approved plan. In this case, the contractor’s scope of work is limited and, therefore, the cost of construction is reduced. • The project proponent may invite bids for both the planning (design) and construction of the project. The competitive bidder is selected to undertake both functions. Once the final plan is approved, the contractor proceeds with construction in accord - ance with the approved plan. 7.3 Management of Construction Risk Construction risk is largely managed as per the terms of the construction contract, which may provide for: • proper risk allocation to the party best suited to manage the risk – usually the contractor; • limitation of the contractor’s liability to the price of the contract; • indemnity and warranty provisions to cushion the project proponent from construction risks; • the requirement for the contractor to take up insur - ance against construction risks; • force majeure provisions to cushion the parties from unforeseen circumstances that may delay or render the project impossible to implement; and • performance guarantees and bonds, particularly in government projects. 7.4 Management of Schedule-Related Risk The parties may agree to a milestone-based construc - tion schedule. The contract may provide for liquidated damages to be paid by the contractor in the event of inexcusable delays in attaining the milestones. In cases of inordinate inexcusable delays, the contract may also provide for termination at the discretion of the aggrieved parties. 7.5 Additional Forms of Security to Guarantee a Contractor’s Performance Project owners may call for additional security to guar - antee a contractor’s performance, including: • guarantees from the contractor’s parent company and third-party sureties;
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