5bn rent arrears: Dfcu dragged to court over rent dues - Daily Post Uganda

5bn rent arrears: Dfcu dragged to court over rent dues

Crane management Service limited has dragged DFCU bank to the Commercial division of the High Court demanding that the bank pays it Shs. 5bn accrued in rent arrears and interest on some of the properties, which the bank occupied after taking over Crane Bank and ignored its rental obligations.

Crane management Service, owned by tycoon Sudhir Ruparelia is the property management and letting agent of Meera Investments Ltd, which owns the properties in question.

Through its lawyers Magna Advocates, CMS, is suing Dfcu on account of being the successor in title to Crane Bank Ltd (in receivership), having taken over the defunct bank’s assets and liabilities and by its conduct having assumed the rights and obligations under the said tenancies and yet ignored them.

When Dfcu took over Crane Bank, it took over the occupation and use of the properties in question as listed below;
Plot 9, Market Street – Crane Bank Branch
Plot 9, Market Street – Crane Bank ATM
Plot 1-3 Jinja Road – Crane Bank Branch
Plot 47, Republic Road, Mbale – Crane Bank Branch
Speke Hotel 1996 Limited – Crane Bank ATM
Plot 20 Kampala Road – Crane Bank ATM
Apartments at Bombo Road, Kiira Road, William Street, Market Street, Nkrumah Road
Plot 28, Luwum Street – Crane Bank Ltd Unit No. 31 & 33
Plot 1, Sinay Bin Amir Street – Crane Bank staff, 8 apartments
Plot 22/24/26 Kampala Road – Crane Bank Ltd, Staff flats.

The properties had been let out to Crane Bank for specified periods of time and the agreements stipulated paying rental fees annually and in advance. However, Dfcu vacated the premises on 30th April 2017 without meeting rental obligations.
It should be recalled that on 20th October 2016, BoU put Crane Bank under receivership and the bank continued to occupy the said premises.

On 25th January 2017, Bank of Uganda announced that it had transferred the assets and liabilities of Crane Bank to Dfcu, a fact that Dfcu confirmed by running notices in the newspapers that it had taken over the assets and liabilities.
CMS argues that after taking over Crane Bank assets and liabilities, Dfcu acknowledged being party to the existing agreement and assumed rights and obligations of the tenancy agreements.

“They took occupation of the premises and continued to operate from them, they removed all Crane Bank branding, adverts and notices, substituting them with their own, an indicator that they were the new tenant.”
Dfcu also paid arrears on part of the properties to the tune of $81,408 (about Shs219m), an indicator that they acknowledged occupancy of the premises.

“The defendant (Dfcu) also paid utility arrears (Shs410m) to the plaintiff, confirming that it was the successor in title of Crane Bank Ltd and therefore took over obligations of Crane Bank Ltd (in receivership),” part of the suit reads.
Then Dfcu bank vacated the premises on 30th April 2017, while the said rental agreements were still running and the only agreement reached was that Dfcu pays $531,000 (about Shs1.9billion) in restoration costs.
Now CMS demands rental arrears to the tune of Shs 5billion and court has summoned Dfcu to file their defense.

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