July 17, 2020

d) Equal distribution rights between parents of the deceased

Filed under: Hidden Insight — job @ 10:07 am

The Bill also sets out to ensure equal rights between parents of the deceased. The current position is that the father has first priority unless he is not alive then interests will be vested to the mother. The new regime will see to it that both parents shall have equal priority rights in the distribution of the estate.

Traditionally, mothers had been side-lined owing to traditional patriarchal stereotypes that enabled men to be prioritized above women. This shift in the law will ensure that mothers of the deceased who die intestate are entitled to receive an equal share to their husbands in the event the deceased did not leave behind a wife or children.

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c) Effects of Re-marriage to succession of the Deceased’s Estate

Filed under: Hidden Insight — job @ 10:04 am

Section 35 of the LSA currently provides that a widow’s right to inheritance shall determine upon re-marrying.  The LSA Bill seeks to eliminate this gender bias by replacing the word ‘widow’ with ‘spouse’. Specifically, the Bill provides that a spouse loses their lifelong interest in the deceased’s estate when they re-marry. This effectively applies to both men and women thus eliminating the differential treatment of men and women on the issue of termination of the right to inheritance upon marriage.

Some scholars have argued that the termination of the right to inheritance upon re-marriage infringes Right to Marriage as provided under Article 45 of the Constitution of Kenya. This is because that particular provision may affect one’s choice in deciding whether or not to re-marry since that re-marriage comes at the risk of losing the right to inheritance.

Other scholars have argued that the proposal to strip a spouse their interests if they remarry is to protect the estate from a reckless widow/widower where minors and other dependents are involved.

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b) Communal Land Protection

Filed under: Hidden Insight — job @ 10:00 am

Section 32 of the LSA provides that land situate in West Pokot, Turkana, Marsabit, Mandera, Wajir, Garissa, Tana River, Narok, Samburu, Isiolo, Lamu and Kajiado shall not be divided subject to the law of succession Act.

This section in the LSA was included so as to protect communal land rights of communities situated in these areas from any form of privatization including through succession claims by individuals. By including community land recognized under Article 63 of the Constitution of Kenya into the law on succession, the Bill is taking proactive steps towards eliminating historical injustices and disputes that arise due to private ownership of what initially was community land.

However, we believe that further steps such as registration of community land at the Lands Registry should be undertaken to ensure better protection of community land as provided for under Land Registration Act 2012.

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a) Dependency and Gender Equality

Filed under: Hidden Insight — job @ 9:55 am

The proposed amendments to section 29 of the LSA amplify the principle of gender equality, noting that the current Act contains elements of discriminatory treatment. For instance under the LSA, the husband who claims an interest in the wife’s estate is required to prove dependency yet the same is not required from the wife.

Section 29 (c) of the LSA provides that “where the deceased was a woman, her husband if he was being maintained by her immediately prior to the date of her death.  This means that for widowers to be entitled to their wives estate, they have to first prove to the courts that they were being maintained by the deceased wife immediately prior her death.

In contrast, the category of wives and former wives bear no such burden with the courts automatically acknowledging their claims to their husbands’ estate. Currently, the only qualification for a former wife is to prove that she did not receive any of the deceased’s assets during the dissolution of the marriage. However, this will change when the President assents to the Bill because the Bill seeks to eliminate former wife’s automatic rights in the former deceased’s estate by providing that she first needs to satisfy the courts that she was being maintained by the deceased prior to his death.

This proposed amendment to section 29 of the LSA will eliminate the existing gender bias against widows that asserts men as the providers of households thereby making it difficult for widowers to access their wives estates in succession matters.

The interesting bit however is that though the proposed amendments seek to realize gender equality, section 31 of the LSA also acknowledges that the application of customary law in Kenya has not been deleted. This is still a major setback because most customary norms favour men as opposed to women especially with regard to whether married women can inherit or not.

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May 27, 2020

PR&MB 2020 – Penalties and Offences

Filed under: Hidden Insight — KRK Advocates LLP @ 7:47 am

The Bill establishes various offences and provides penalties. These include

  1. A person who obstructs a public officer in the discharge of the person’s functions under this Act; or (b) refuses to comply with any direction given by a competent authority in the furtherance of provisions under this Act, commits an offence and is liable on conviction to a fine not exceeding one million shillings or to imprisonment for a term not exceeding one year, or both.
  2. A person who commits an offence under subsection (1) and the offence results in the loss of life shall, on conviction, be liable to imprisonment for a term not exceeding five years. Penalty for false claim.
  3. A person who knowingly- (a) makes a claim which the person knows or has reason to believe to be false, for the purpose of obtaining any relief, assistance, repair, reconstruction or other benefit from a public office; or Makes or circulates a false alarm knowingly or warning as to a pandemic or its severity or magnitude leading to panic commits an offence and is liable on conviction to a fine not exceeding one million shillings or to imprisonment for a term not exceeding one year, or to both.
  4. A person who, being entrusted with any money or materials, or otherwise being in custody of money or goods meant for providing relief during a pandemic- (a) misappropriates the money or goods; (b) appropriates the money or goods for the person’s own use; (c) compels another person to misappropriate the money or goods; commits an offence and is liable on conviction to a fine not exceeding ten million shillings or to imprisonment.
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PR&MB 2020 – Information Technology and Business

Filed under: Hidden Insight — KRK Advocates LLP @ 7:43 am

National and county governments shall put in place social safety schemes designed to support vulnerable persons, vulnerable households and informal sector workers whose incomes have been disrupted by the pandemic. The Bill has not however defined the scope of vulnerable persons nor the procedure for identifying them. Some of the economic safeguards to be enforced include unconditional cash transfers to support the identified groups. Kenya currently already has safety net programmes for certain groups such as the elderly, orphaned children and persons with disabilities.

However there is a significantly large group of Kenyans who are not in existing social safety net groups. As such, cash transfer programmes to these groups seems to be a difficult challenge. Going forward, it appears that Kenya should have a more comprehensive social net programme. These programmes should be existent even in times when the county is not facing a pandemic.

The Bill also charges the National and County governments with providing for the waiver of water and electricity charges for identified vulnerable persons and households; and adjustment of tariff rates in order to reduce utility charges to individuals and businesses; and withhold disconnections for non-payment of utility bills.

Suspension of Rates and Licenses

The Bill provides that county governments may suspend fees payable on renewal of trade licenses and payment of property rates during the pandemic.

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PR&MB 2020 – Labour Relations and Social Safety

Filed under: Hidden Insight — KRK Advocates LLP @ 7:34 am

It is no doubt that the pandemic has caused significant disruption of employment. The Bill provides that where a pandemic adversely affects the ability of an employer to pay salaries or wages:

  1. Notwithstanding the provisions of the Employment Act, an employer shall not terminate a contract of service or dismiss an employee;
  2. An employer shall not coerce an employee to take a salary cut.

The Bill further adds that despite subsection (1), where an employer is unable to meet his obligations to pay salaries or wages, the employer shall permit an employee to take leave of absence without pay for the duration of the pandemic.

The spirit of the Bill is to ensure that no employee loses their job or is forced to take a salary cut due to the pandemic. The Bill also seems to attempt to oust the provisions Employment Act which is the primary Act with regards to employment. There is therefore an outright conflict with regards to the two pieces of legislation as the Employment Act allows for termination of an employee provided they are given sufficient written notice.

Social safety net and economic safeguards

National and county governments shall put in place social safety schemes designed to support vulnerable persons, vulnerable households and informal sector workers whose incomes have been disrupted by the pandemic. The Bill has not however defined the scope of vulnerable persons nor the procedure for identifying them. Some of the economic safeguards to be enforced include unconditional cash transfers to support the identified groups. Kenya currently already has safety net programmes for certain groups such as the elderly, orphaned children and persons with disabilities.

However there is a significantly large group of Kenyans who are not in existing social safety net groups. As such, cash transfer programmes to these groups seems to be a difficult challenge. Going forward, it appears that Kenya should have a more comprehensive social net programme. These programmes should be existent even in times when the county is not facing a pandemic.

The Bill also charges the National and County governments with providing for the waiver of water and electricity charges for identified vulnerable persons and households; and adjustment of tariff rates in order to reduce utility charges to individuals and businesses; and withhold disconnections for non-payment of utility bills.

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PR&MB 2020 – Tenancy Agreements

Filed under: Hidden Insight — KRK Advocates LLP @ 7:26 am

Following the financial impact of Covid-19, a lot of Kenyans have implored the government to provide for a way forward with regards to the payment of rent. The Bill in an attempt to do this provides that where a pandemic has affected the financial capacity of a tenant to meet their obligations:

  1. the tenant shall give a notice in writing to the landlord or contracting party that they are unable to meet their obligations because of the pandemic;
  2. Upon receipt of a notice under paragraph the contracting parties shall enter into an agreement on how the tenant shall meet their obligation at the end of the pandemic.

The procedure laid out seeks to cushion tenants from facing eviction for failure to pay rent during the pandemic but at the same time binds tenants to fulfil their obligations after the pandemic. The Bill does not however indicate the period for issuing a written notice to the landlord. The Bill is also silent on encouraging landlords and tenants to re-negotiate the rent payable. However, ideally nothing bars a landlord and a tenant from re-negotiating the amount of rent payable.

However it is obvious that the landlords may have gotten the short end of the stick as tenants (including those who may still be able to pay part or full rent) may use this provision to temporarily avoid paying rent. Nonetheless the Bill reiterates that the Cabinet Secretary responsible for matters relating to housing may, with the approval of Parliament, provide measures to cushion landlords and tenants.

Comments (1)

PR&MB 2020 – Contractual Obligations

Filed under: Hidden Insight — KRK Advocates LLP @ 7:24 am

Where the declaration of a pandemic affects the performance of contractual obligations by a party to a contract, several remedies that would be available to the other party are waived. As such, the following activities are prohibited:

  1. Commencement of levying of execution;
  2. Enforcement of security over movable and immovable property used for the purpose of a trade, business or profession;
  3. Repossession of any goods used for the purpose of a trade, business or profession; or termination of lease or licence of immovable property in connection with non-payment of rent or other monies.

The Bill appreciates that a pandemic may cause significant frustration and hardship in performance of contracts and seeks to cushion parties whose performance of obligations is impaired. The Bill also takes cognizance of the fact that not all contracts may be affected by the pandemic and thus only those rendered incapable of performing their obligations may take advantage of this clause.

However, several commentators have argued that this clause of the Bill seems to ignore the fact that parties may have other obligations which may be tied to the performance of particular contract. As such, these measures would lead to a negative ripple effect and cause further disruption of the economy.

It is worth noting in certain cases, the pandemic may constitute force majeure (unforeseeable circumstances preventing parties from fulfilling their contractual obligations hence making the performance of the contract impossible). While the mere existence of a pandemic isn’t sufficient enough to invoke force majeure, measures taken to mitigate its effects such as lock-down of movement and business could ultimately constitute force majeure or cause hardship.

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PR&MB 2020 – Loans and Mortgages

Filed under: Hidden Insight — KRK Advocates LLP @ 7:19 am

The Bill makes provision for the status of contracts for loans and mortgages entered into prior to the declaration of a pandemic. The Bill stipulates that where a pandemic has a negative impact on the capacity of the public to meet its contractual obligations entered into prior to the declaration of a pandemic, the following measures shall apply during the pandemic up to three months after the end of the pandemic —

  1. A borrower and the respective lending financial institution shall enter into an arrangement to review repayment modalities;
  2. Penalties shall not be imposed on a defaulter; and
  3. A defaulter shall not be listed by a credit reference bureau.

The Bill provides that a lending financial institution shall not charge fees, interest or any other penalty for non-payment or late payment of obligations during the pandemic period. Therefore, interests will be accruing at the new “pandemic rate” agreed upon by both the lenders and borrowers but late payment or default interests or penalties shall be suspended.

The Bill having taken a purely suggestive approach presents the challenge that there is a huge possibility of the failure to agree on repayment modalities between lenders and borrowers. The Bill also seems to encourage individual debt restructuring of loans as opposed to a blanket reduction of interest rates sanctioned by law. The complexity presented by this approach is obvious as it is a cumbersome process. And it is purely suggestive hence isn’t likely to be enforced. This could lead to a myriad of legal issues after the pandemic. For instance, would failure to agree mean that the default interest rates applicable before the pandemic would be deemed to have automatically applied during the pandemic?

Further, as it stands, the Bill seems to primarily cushion borrowers and not lenders. The effect of this is that financial institutions would be unwilling to cooperate in this process as they stand to suffer loss. However, the Bill states that the Cabinet Secretary responsible for matters relating to finance may, with the approval of Parliament, provide measures to cushion both lenders and borrowers. Perhaps these measures would work best if initiated by Central Bank of Kenya.

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