New Court Ruling Expands Small Claims Court Powers on Rent Disputes
A recent High Court ruling has changed rent-related disputes are handled in Kenya’s Small Claims Court (SCC). If you’ve ever had issues with a landlord refusing to refund your deposit, this decision could be important.
What’s the Issue?
Previously, there was confusion about whether rent disputes—especially unpaid rent or deposit refunds could be handled by the Small Claims Court.
A 2022 decision had ruled that such cases were outside the SCC’s jurisdiction, meaning tenants had to take their claims to other courts, which often meant more time and legal costs.
In a new ruling (Muhanda v LP Holdings Ltd), Lady Justice Helene Namisi clarified that while claims for unpaid rent still don’t belong in the SCC, refund of rent deposits does.
Why the Change?
The decision comes down to how the law defines the types of claims the SCC can hear. The Small Claims Court Act allows cases involving “money held and received” or contracts for goods and services—essentially, situations where someone is holding money that rightfully belongs to someone else.
The earlier 2022 ruling said that rent arrears didn’t fit these categories. However, Justice Namisi pointed out that a security deposit is different from unpaid rent.
Since a landlord is holding a tenant’s deposit with the understanding that it will be refunded if there’s no damage or unpaid bills, this fits the “money held and received” category.
What This Means for Tenants and Landlords
- If your landlord refuses to return your security deposit after you move out, you can now take the case to the Small Claims Court.
- If you are a landlord seeking unpaid rent, you will have to go to a different court.
This ruling makes it easier for tenants to recover their deposits without expensive legal battles. The Small Claims Court is designed to handle disputes quickly—usually within 60 days—so this decision provides a faster, more affordable way for tenants to get their money back.
The Bigger Picture
This case highlights something important about Kenya’s legal system: laws aren’t set in stone. Courts can revisit decisions to ensure fairness and practicality. The legal system evolves, and this ruling shows a step towards making justice more accessible, especially for everyday financial disputes.
For tenants and landlords alike, understanding these legal changes can make a big difference. If you’re facing a deposit refund issue, you now have a clear and simple path to resolution—through the Small Claims Court.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. If you need specific legal guidance, talk or chat on 0708111222.