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Landlord-tenants bill promises fireworks

Analysis

Landlord-tenants bill promises fireworks

Tenants demonstrate against US Dollar rent

Tenants demonstrate against US Dollar rent

The proposed law on regulating relations between landlords and their tenants promises to trigger a heated debate when it is finally tabled on the floor of Parliament in the foreseeable future.

The first major indicator of how hot the debate might be, emerged just recently when Cabinet withdrew its own draft proposals regarding the ban on tenants to charge rent in foreign currencies.

The sudden change of heart in Lands and Housing Minister Betty Amongi, came when powerful and connected landlords protested the ban on charging in dollars.

Despite being few in number compared to the millions of tenants who have been crying over the growing dollarisation of rent, the government listened to them and  withdrew the ban, saying the government land lords are free to continue to impose draconian requirements including demanding rent in dollars.

In fact, according to Judy Rugasira Kyanda, the Managing Director of Knight Frank, one of the biggest property management firms in Kampala, the landlord’s claim that most of them borrowed in dollars to put up the structures.

Rugasira says only 10 percent of Kampala’s landlords actually built properties on the basis of dollarised loans.

“The majority of landlords are charging shilling rentals, and it is the shilling rentals which are being arbitrarily increased over and above (by up to 300percent). So charging shilling rents and banning dollar rents is not the solution, we are barking up the wrong tree [suggesting that the problem lies elsewhere],” she said.

The issue is so controversial that it has split senior government officials.

Presidential Political Assistant Moses Byaruhanga made no secret of his disappointment with the cabinet U-turn over the rent-in-dollars matter when he said in a recent opinion piece that the Executive sided with the minority.

Besides the rent-in-dollar controversy, the Landlord Tenant bill has further brought to the fore several other sticky issues, including the requirement that no person would be allowed to enter into agreement without presenting a national I.D.

PART II – Tenancy agreements, of the preliminary bill under subsection (5) states that a landlord shall not enter into tenancy agreement (a) with an individual, unless the individual provides his or her national identification card or alien’s identification card.

It is no wonder that the proposed bill has sparked a furious debate among the public. Ivan Kalanzi, a tenant from Kawempe Sebina Zone and a trader at Kalerwe market criticised the law on grounds that it introduces stringent measures that may not be attainable by many poor tenants.

“If this new law has such tough conditions, then we whose national IDs got lost we will lack spaces to rent. This is because getting a replacement is such a hard thing. So where will one stay?

Although Cabinet had proposed regulations preventing landlords from hiking rent beyond 10percent, the new bill has relaxed the stance by once again giving landlords the right to determine how much they want to hike rent, subject to tenants agreeing to set terms.

According to Part VI subsection (28) of the bill: Where a tenant who does not object to a rent increase or reach an agreement with the landlord on the increase to be effected and the rent increase is in accordance with this Act, the tenant is taken to have accepted the rent increase.

The provision effectively cancels out an earlier provision (Part 6, subsection 27 (1)), of the bill that states that landlords cannot hike rent by more than 10percnet annually. This is so because the bill empowers the landlord to maintain the hike and if the tenant declines, they could simply move on.

The bill has also received criticism from property managers who say it lacks the touch of an insider, who knows how things go in the industry.

This point was made by Ivan Zziwa, a real estate graduate and worker at Marina Real Estate Property Management.

He said: “The bill was not drafted with the diligence, expertise and understanding of property law and management but rather was drafted only to appease the smallest group of people instead of focusing on the entire sector. So, this may in turn destroy our property market which is still mushrooming.”

Zziwa adds that the bill does not define what commercial premises should be and have and what residential premises should have. Kampala has slum areas such as Bwais, Kimumbasa, Kalerwe Ssebina zone, Acholi quarters, Manyata Butabiika, Kasokoso Mutungo zone, Gulf Kitintale, Kisenyi in Luzira Kanyogoga below Muyenga.

Considering the controversy that this bill has triggered even before reaching Parliament, a number of observers have cast doubt on the chances of the law passing in its shape, or sail through altogether.

 

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