KENYA Law and Practice Contributed by: Anne Kinyanjui and Loice Erambo, DLA Piper Africa, Kenya (IKM)
6.10 Payment of Utilities and Telecommunications
proposed variation before the Business Prem - ises Rent Tribunal (BPRT). If the lease is silent on rent variation, this can only be done by agreement between the parties. 6.6 Determination of New Rent Rent is varied based on a pre-agreed escala - tion rate indicated in the lease. The frequency of escalation is also indicated in the lease. 6.7 Payment of VAT VAT is payable on rental income from non- residential premises at the rate of 16%. Rental income obtained from residential premises is exempted from VAT payment under part II of the First Schedule of the Value Added Tax Act 2013 (VAT Act). 6.8 Costs Payable by a Tenant at the Start of a Lease The tenant bears the following costs: • the cost of fitting out the premises; • the security deposit on the rent and the ser - vice charge; • the initial service charge; • the stamp duty payable on the lease, which is charged at 2% of the average annual rent; • nominal fees for registration of the lease; and • the tenant’s legal fees and the landlord’s legal fees (as may be agreed by the parties). 6.9 Payment of Maintenance and Repair The maintenance and repair costs for common areas are paid by the landlord or the manage - ment company from the service charge paid by the tenants. These costs are apportioned amongst the tenants.
Each tenant bears the cost of installing individ - ual utility meters (water, electricity, etc) for the leased premises, and pays utility costs directly to the utility providers. For shared utilities, the landlord or management company will apportion the costs to the tenants, who will pay the landlord or management com - pany in the form of service charges for onward payment to the utility providers. 6.11 Insurance Issues The landlord insures the building while the ten - ant insures the contents in the leased premises, including the assets of the tenant within the premises. The lease indicates the insured risks, which may include fire, burglary and natural dis - asters. In recent times, insurers have offered cover for losses suffered due to the COVID-19 pandemic. There is no data on the uptake of these types of cover or recovery rates for pan - demic-related losses. 6.12 Restrictions on the Use of Real Estate The landlord may contractually restrict the use of the leased premises by a tenant if such restric - tions are permitted by law. Furthermore, the law imposes user restrictions on tenants, with the Physical Planning Act and county legislation regulating the use and devel - opment of land in Kenya. These restrictions may be indicated on the title document. The LA also implies covenants on the use of leased premises by tenants.
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