Muwema & Company Advocates, Friday Kagoro Dragged To Court Over UGX 553M Rent Arrears

A real estate company called Downtown Investments Limited has dragged city Lawyers Fred Muwema and Friday Kagoro to court after they allegedly failed to pay over sh553m in rent arrears despite several reminders from their landlords.

Downtown Investments sued Muwema and Company Advocates together with the two lawyers demanding its unpaid rent.

According to documents filed in the of Commercial Division the High Court in Kampala, on December 15, 2014, Downtown Investments and Muwema and Company Advocates entered into a lease agreement.

Documents show that it was agreed that the law firm would pay a monthly rent of $5,500 (about sh20.5m) plus value-added tax which was to be revised by 10% every 12 months after the first 24 months.

Downtown Investments contends that from December 15, 2015 to date, the defendants have defaulted in making timely monthly payments as per the agreement and that rental arrears had, by May 30, 2023, accumulated to $182,400 (about sh680.6m).

The company states that on June 8, 2023 the defendants paid $50,000 sh186.6m) as partial payment (about
of the outstanding rental arrears, on the prompting of a demand notice.

“The defendants have, despite numerous reminders from the plaintiff, refused to pay the outstanding sum,” the complaint that was filed in court reads.

According to court documents Downtown Investments which is being represented by Walyemera and Company Advocates wrote numerous letters to the defendants demanding the outstanding rent.

The company allegedly informed Muwema and Kagoro who are partners in the law firm that the option to purchase the said property was no longer enforceable as per Clause 5(1) of the lease agreement.

Downtown Investments therefore claims that it has suffered losses as a result of the defendants’ conduct.

“A notice of intention to sue was served to the defendants and the same was ignored,” the real estate company said.

In his affidavit, Downtown Investments’ director Paresh Kumal Ratilal Mehta states that from December 15, 2015 to date, the defendants have defaulted and the rental arrears had by May 30 this year, accumulated to sh553m.

Downtown Investments is therefore seeking a court order directing the lawyers to pay the outstanding rent arrears of sh553m and the costs of the suit.

Downtown Investments describes itself as a limited liability company duly incorporated under the laws of Uganda and it offers real development management services.

However in response, Kagoro one of the troubled lawyers said they had filed an application to defend themselves.

In their notice of motion, which the court registered on August 21, the lawyers acknowledge entering into lease agreement with Downtown Investments December 15, 2014.

They say the agreement had an annual reserved payment of $66,000 (about sh247m), which was to be subjected to revision after the first 24 months.

Despite the aforementioned revision clause, the lawyers argue that no lease payment
increment was justified, negotiated, and/or agreed upon between them and them and the
company.

Owing to an existing harmonious relationship. the lawyers say they paid more than $186,000 (about sh696.7m) to the company to put the premises that were in disrepair into a good state..

“Some of the repairs and maintenance work done at the premises involved the rebuilding the perimeter wall, which had collapsed in 2018 and replacing the leaking roof for the whole premises,” Muwema stated in his attached affidavit.

The lawyers argue that in August 2021, they exercised the option to purchase the premises and accordingly made an offer, which has not given any substantial response since the demise of the company’s managing director, Tushar Ruparelia, in December 2021.

The lawyers say upon invocation of the option to purchase, the company was under the obligation to negotiate and conclude the terms of the purchase which it has failed to date.

“Therefore, any payments made by the law firm after August 2, 2021, constitute a price to be determined by the part payment of the purchase parties,” Muwema said.

The case is yet to be fixed for hearing.

Established in 1998, Muwema and  Company Advocates is located on Plot 50, Windsor Crescent in Kololo, Kampala.