One of the biggest concerns many tenants face after vacating their residential premises is the frustrating experience of landlords refusing to refund security deposits. This situation often leaves tenants wondering about the best legal avenue to recover their deposits. Should they approach the Rent Restriction Tribunal, the Business Premises Rent Tribunal, the Small Claims Court, or the Magistrates Court? The choice of the forum is critical as it determines whether the selected forum has the requisite jurisdiction to hear the matter.
Understanding Jurisdictional Limits
Rent Restriction Tribunal (RRT)
Many tenants may consider the Rent Restriction Tribunal (RRT) as an option. The Rent Restriction Tribunal is a statutory body established under Section 4 of the Rent Restriction Act, Cap 296 Laws of Kenya, with the mandate of determining disputes between landlords and tenants of protected tenancies. However, this tribunal has consistently declined to handle cases involving the return of security deposits. The primary reason for this is its pecuniary jurisdiction, which only covers residential premises with a monthly rent of Kshs 2,500 or less, as stipulated under Section 3(1) of the Rent Restriction Act (Cap 296, Laws of Kenya). Given the current housing market in Kenya, very few households pay such a low monthly rent. Most residential properties in Kenya charge at least Kshs 5,000 per month for a bedsitter, with rent ranging up to millions depending on the size and neighbourhood of the residence. As a result, the Rent Restriction Tribunal is not a viable option for the vast majority of tenants.
Furthermore, Section 5 of the Rent Restriction Act outlines the jurisdiction of the tribunal, which is focused on controlled tenancies. Since many modern tenancies fall outside this scope, tenants seeking the return of their security deposits may not find relief here. The High Court in the case of Republic v Chairman, Rent Restriction Tribunal & another Ex Parte Gatanga Mugitiri Company Limited; Samuel Maina Munene (Interested Party) [2021] eKLR being an appeal from the Rent Restriction Tribunal determination where the rent amount was Kshs 25,000 found that the Tribunal lacked jurisdiction to hear and determine the case and their determination quashed.
Business Premises Rent Tribunal (BPRT)
The Business Premises Rent Tribunal (BPRT) is established under Section 11 of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act (Cap 301, Laws of Kenya). This tribunal primarily handles disputes related to business and commercial premises. Section 2 of the Act defines a controlled tenancy as one that is not expressly exempted by a lease of more than five years or by a lease that contains a rent escalation clause.
Since residential tenancies do not fall within the scope of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, tenants seeking a refund of their security deposit cannot rely on this tribunal. Section 12 of the Act explicitly grants the BPRT jurisdiction over controlled business tenancies only, leaving residential tenants without a remedy in this forum. The Jurisdiction of the Business Premises Rent Tribunal is to:
- To protect the Tenant from arbitrary eviction and exploitation.
- To ensure that the Landlord gets returns for his investment.
- Timely hearing and determination of tenancy disputes in controlled tenancies.
- To create a conducive environment for business to thrive.
- To handle termination of tenancies in business premises under controlled tenancies.
- To issue orders for levying distress in business premises under controlled tenancies.
- To undertake rent assessment/re-assessment in business premises under controlled tenancies.
The High Court in Ndege v Mutarura & another [2024] KEELC 6627 (KLR) affirmed that the BPRT does not have jurisdiction beyond controlled tenancies of commercial premises.
Small Claims Court
The Small Claims Court (SCC) established under Section 4 of the Small Claims Court Act, CAP 10 A, as a specialized commercial court, has, in the past, been hesitant to entertain claims for security deposit refunds. The SCC previously declined jurisdiction in Nairobi Small Claims Court Case SCCOMM No. 5354 of 2023) judgment that it did not have jurisdiction over rental security deposit claims. However, a landmark decision by the High Court in Muhanda v LP Holdings Ltd (Civil Appeal E256 of 2023) [2025] KEHC 393 (KLR) (Commercial and Tax) (23 January 2025) has now clarified that the Small Claims Court has jurisdiction over such claims.
The High Court determined that refund of security deposits falls within the category of “a contract for money held and received” under Section 12(b) of the Small Claims Act (No. 2 of 2016). The judgment also noted that the matter had initially been declined by the Small Claims Court on jurisdictional grounds. However, Justice Helene R. Namisi, after finding that the Small Claims Court has jurisdiction, referred the matter back to the SCC to be heard and determined on its merits by a different adjudicator.
This ruling is a significant relief for tenants as the Small Claims Court Act was specifically designed to simplify legal procedures and allow individuals, including those without legal representation, to file claims efficiently. Section 12 of the Act provides that the court has jurisdiction over claims for:
- Contracts for the sale and supply of goods or services.
- Contracts relating to money held and received.
- Compensation for personal injuries.
- Recovery of movable property.
- Liability in tort in respect of loss or damage caused to property.
One of the key advantages of the Small Claims Court is its pecuniary jurisdiction, which covers claims of up to Kshs 1,000,000, as provided under Section 12(3) of the Small Claims Act. Furthermore, the court is statutorily required to expeditiously resolve cases within 60 days from the date of filing the claim, making it a highly efficient option for tenants seeking a quick resolution to their disputes.
Magistrates Court
While tenants can also pursue their claims through the Magistrates Court, this option presents significant challenges. The process of drafting, filing, and attending court can be cumbersome and often requires legal representation, which leads to additional costs. Moreover, cases in the Magistrates Court can take a considerable amount of time to be determined due to the backlog of cases in the judicial system. However, tenants seeking a refund of their security deposit above Kshs 1,000,000 may have no alternative but to file their claim before the Chief Magistrate’s Court or the High Court, depending on the amount in dispute, as provided for under the Magistrates’ Courts Act (No. 26 of 2015).
Conclusion
In light of the recent High Court ruling, the Small Claims Court is now the best forum for tenants seeking a refund of their security deposits. It provides an efficient, cost-effective, and legally sound avenue for resolving such disputes. With its streamlined procedures, tenant-friendly approach, and statutory requirement to conclude cases within 60 days, the Small Claims Court is an ideal choice for tenants facing landlords who refuse to refund their security deposits.
Tenants should take advantage of this judicial clarity and utilize the Small Claims Court to assert their rights, ensuring they are not unfairly deprived of their rightful security deposit refunds.
At Njaga & Co Advocates, our dispute resolution team is ready to assist you in navigating any tenancy-related disputes, including claims for security deposit refunds. We provide expert legal guidance tailored to your specific case, ensuring that you receive a fair resolution. Contact us today for professional legal assistance in asserting your rights and reclaiming what is rightfully yours.