Can a Landlord Just Change the Locks? Rent Arrears, Controlled Tenancies and the Notice Rule Every Business Landlord Forgets

Scope: This update concerns business premises only — shops, hotels and catering establishments let for commercial purposes under the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, Cap. 301. It does not apply to residential tenancies, which are governed by an entirely different legal regime. A landlord letting out a family home or residential apartment cannot rely on this Act, and should not assume the rules below apply to them.

The rent is three months overdue. The landlord has had enough. So the locks get changed, the shutters come down, and the shop tenant arrives one morning to find the business sealed shut — no warning, no notice, no chance to respond. It happens more often than it should, and landlords who do it are usually convinced the law is on their side: after all, the tenant owes rent, so what more is there to prove?

Quite a lot, as it turns out. Kenyan law does not let a commercial landlord bypass due process simply because rent is owed. Where a business tenancy is a controlled tenancy under the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, Cap. 301 (the “Act”), a landlord who locks out a tenant without following the Act’s notice procedure is not enforcing a right — they are creating a lawsuit. This update unpacks what “controlled tenancy” means for commercial premises, what the notice rule actually requires, what the courts have said when landlords skip it, and where rent arrears fit into the picture.

1.  What Exactly Is a “Controlled Tenancy”? (Business Premises Only)

It is worth being precise about what this Act covers, because it is easy to assume it protects any tenant facing eviction. It does not. The Act applies exclusively to business premises — specifically, shops, hotels and catering establishments. It has no application to residential lettings, which fall instead under the Landlord and Tenant Act (for residential premises generally) and, where applicable, the Rent Restriction Act. A tenant renting a house or flat to live in cannot invoke the protections discussed in this update; those protections exist for people running a business from the premises they occupy.

Within that commercial category, not every lease is protected either. Section 2(2) of the Act reserves protection for tenancies of a shop, hotel or catering establishment which:

• has not been reduced into writing at all; or
• has been reduced into writing, but — is for a period not exceeding five years; contains a provision for termination (other than for breach of covenant) within five years of its commencement; or relates to premises of a class specified under the Act.

In practice, this catches a large share of the small shop and hotel leases across Kenya — including many informal, undocumented, or short-term arrangements that landlords assume fall outside the law entirely. If a tenancy fits this description, the landlord’s hands are far more tied than they might expect.

2.  The Golden Rule: No Notice, No Termination

Section 4(2) of the Act is unambiguous. A landlord who wishes to terminate a controlled tenancy — or to alter, to the tenant’s detriment, any term, condition or service enjoyed under it — must give notice to the tenant in the prescribed form.

This is not a formality that can be waived because the tenant is in the wrong. Under section 4, a controlled tenancy simply cannot be terminated outside this statutory procedure. The notice must specify the grounds relied upon, and it must call on the tenant to respond in writing — within one month of receiving it — stating whether or not they agree to comply.

The Court of Appeal put this beyond doubt in Munaver N Alibhai T/A Diani Boutique v South Coast Fitness & Sports Centre Limited [1995] eKLR, striking down a termination notice for failing to meet section 4’s requirements. The Court held that the Act lays down, clearly and in detail, the procedure a landlord must follow: a controlled tenancy cannot be terminated, and no term, right or service under it altered, except strictly in accordance with the Act — including notice in the prescribed form, taking effect no earlier than two months after receipt, specifying the grounds for termination, and calling on the tenant to confirm in writing whether they will comply.

3.  Two Months, Minimum — With Three Narrow Exceptions

Section 4(4) sets the default rule: a tenancy notice cannot take effect until at least two months after the tenant receives it. There are only three situations in which that default shifts:

• The termination date cannot, in any event, be earlier than the date on which the tenancy would or could have ended had the Act not applied;
• Where the tenancy’s own terms provide for a notice period longer than two months, that longer period applies instead; and
• The parties may agree, in writing, to a shorter period of notice.

Outside of these, two months is the floor, not a suggestion. In Oscar Luvaha (Explore Auto Valuers and Assessories Limited) v Babi Investments & another [2021] eKLR, the court reaffirmed the Court of Appeal’s position that a valid termination notice must satisfy two conditions, and two only: it must be in the prescribed form, and it must not take effect before the expiry of two months (or such shorter period as the parties have validly agreed).

4.  When Landlords Skip the Rule — The Courts Have Not Been Kind

Kenyan tribunals have repeatedly struck down shortcuts. In Mutisya v Wambua & 2 others [2025] KEBPRT 345 (KLR), the Business Premises Rent Tribunal found that a landlord who issued a notice to vacate within seven days — far short of the statutory minimum, and not in the prescribed form — had failed to meet the Act’s requirements. The termination notice, dated 14th March 2025, was declared invalid.

The lesson repeats across the case law: a notice that skips the prescribed form, understates the notice period, or omits the tenant’s right to respond will not survive scrutiny — no matter how justified the landlord’s underlying grievance may be.

5.  Where Rent Arrears Fit In

None of this is to say rent arrears are irrelevant. Section 7 of the Act sets out the grounds on which a landlord may seek to terminate a controlled tenancy, and section 7(b) squarely covers arrears: that the tenant has defaulted in paying rent for a period of two months after it fell due, or has persistently delayed in paying rent that has become due or payable.

So arrears of two months or more — or a pattern of persistent late payment — is a valid statutory ground for termination. What it is not, is a licence to skip the process. A landlord seeking vacant possession on this ground must still satisfy the court that the prescribed notice procedure was followed in full before any step is taken to shut a tenant out — changing padlocks included. The tenant must be notified of the intention to terminate, and the grounds relied upon properly explained, before possession can be recovered.

At Karanu Kanai & Company Advocates, we regularly advise commercial landlords and business tenants navigating disputes under the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act — from drafting compliant termination notices and vacant possession claims, to defending tenants against unlawful lock-outs and negotiating exits that avoid tribunal altogether. For residential tenancy matters, a different legal framework applies and we would be glad to advise separately.

The bottom line for business landlords: rent arrears may justify termination of a commercial tenancy, but they never justify skipping notice. Get the process wrong, and the arrears you were chasing quickly become the least of your problems.