Real estate players oppose proposed Landlord Tenant Bill

Some players in the real estate industry  have opposed the Landlord Tenant Bill that was recently approved by cabinet but is yet to be tabled in Parliament.

Some of them say they were not consulted when government was drafting the bill.

Last week the government through the ministry of Lands, Housing and Urban Development approved the legislation to regulate the relationship between the land lord and the tenants under the housing sector.

The legislation was drafted after a long outcry by the traders under their umbrella body, Kampala City Traders Association (KACITA) that landlords were arbitrarily increasing rent charges on short notice and without consulting them.

Under the new legislations, the landlords will not be allowed to charge the tenants rent in dollars but in Uganda shillings.

Everest Kayondo, the chairman of KACITA, welcomed the bill hoping that traders will now save more money as opposed to only working for rent.

However some of the big real estate players have opposed the bill.

Hamis Kiggundu, a property tycoon said the bill will not work.

He said the rent is determined by a number of factors.

For example, he said, building a commercial building requires getting a loan from a bank and the interest rates are very high.

"In this case the rent is determined by such factors," he said.

Kiggundu added that demand and supply forces influence the market yet the bill was approved with a lot of political pressure.

Rajiv Ruparelia, the director of Crane Management Services (CMS), said that while drafting the bill government excluded stakeholders like them who are knowledgeable about the real estate sector in the country.

"We should have been consulted and we would have given them our input," he said.

Muzamiru Kibeedi, a lawyer said: ‘The real estate sector is very central to the health of our economy. Commercial banks and other financial institutions heavily rely on it to secure the loans they lend to their customers for development. It is one of the least risky areas a private individual can invest in and make a reasonable return on the investment."

This is not the first time government is trying to regulate the sector.

In 1972 when Idi Amin expelled Asians, he gave powers to the minister of Housing to determine the rent chargeable in respect of the departed Asians properties.

And as expected, it was below the prevailing market rates. So, the demand for the houses shot up and could not be met by available houses on the market.

A black market for rental houses emerged. The persons with the “right connections” with state power would get houses allocated to them from the Custodian Board at the controlled rent and sublet them out at commercial open market rates.