LBDA Targets Sh25.9 Million Rent Arrears at Kisumu Fairways Hotel

The Lake Basin Development Authority (LBDA) has intensified its efforts to recover Sh25.9 million in outstanding rent from Fairways Hospitality Kisumu Limited, a firm linked to former Principal Secretary Irungu Nyakera. In a statement released on March 11, 2026, the authority declared the hotel a chronic defaulter, asserting that the tenant has failed to honor various settlement agreements reached over the last several years.

According to the LBDA, the commercial relationship began with a lease agreement signed in 2019 for the premises located within the Lake Basin Development Authority Mall in Kisumu. The authority claims that while the tenant acknowledged a debt of Sh27.4 million in a voluntary consent agreement dated June 3, 2025, subsequent repayment terms were systematically breached. No current rent has reportedly been paid from May 2025 to date.

The dispute reached a critical junction on February 12, 2026, when the High Court in Kisumu dismissed an injunction application filed by Fairways Hospitality. The court affirmed the LBDA's contractual right to levy distress for rent to recoup the mounting arrears. Following this ruling, the authority issued formal termination notices, contending that the lease was lawfully ended and that the current occupation of the premises is a trespass.

The LBDA has accused the hotel management of misusing the judicial system to frustrate recovery efforts. The authority alleges that on the same day the High Court dismissed the injunction, the company sought fresh expert orders from a Magistrate's Court without disclosing the previous ruling. The state agency maintains that the High Court's orders remain in force and have not been stayed or appealed.

Irungu Nyakera, who is also a Nairobi gubernatorial aspirant, has contested the authority's stance. Speaking in Kisumu, Nyakera claimed the dispute is largely rooted in arrears accumulated during the COVID-19 pandemic when hospitality operations were restricted. He stated that he has invested over Sh235 million into developing the infrastructure and conference facilities at the site since 2019.

The situation escalated on Wednesday morning when Nyakera reported that a group of armed individuals stormed the hotel, causing damage to property and electronic equipment. He alleged that the incident was an attempt to forcibly evict him from the premises, which he claims to hold under a long-term lease. Police in Kisumu have since launched an investigation into the reported raid.

Currently, the matter remains before the Business Premises Rent Tribunal, with a hearing scheduled for later this month. While the tribunal had previously issued interim orders on February 25 to allow the tenant access, the LBDA notes that a stay of execution on those orders was granted on March 9. The authority insists it is committed to safeguarding public resources by pursuing all legal avenues to recover the Sh25.9 million debt.