UGANDA, Kampala | Real Muloodi News | Increasing rental rates may not come as a surprise due to the hiking of other commodities in the economy.
Many landlords who were struggling to recover from loss of income following the COVID-19 shutdowns are not coping with the rising costs of living. Therefore, some landlords have no option but to increase rent.
However, the hiking of rental fees is a disservice to tenants who are also faced with income loss from the shutdowns. Business owners were off work during the two lockdowns of 2020 and 2021. Yet most landlords expected rent payments during those closed working months, leaving many with rent defaults.
Additionally, many of these tenants are experiencing slow business recovery since the reopening of the economy.
Likewise, banks and other mortgage lenders gave the landlords little reprieve from their mortgage repayments during the months of lockdown, saddling landlords with their own defaults and accumulated debt.
All of this has resulted in clashes between some landlords and their tenants.
Moreover, parliament recently granted landlords the power to evict tenants who fail to meet rent obligations after 30 days of the due date, as per the new Landlord and Tenants Bill 2021.
The Bill also permits the landlords to access the tenants’ premises and take possession of the their property to recover accumulated rent arrears, on the condition that the landlord issues a notice to the tenants who default on rental payments. Such action must take place in the presence of the area local council officials and the police.
However, the new law also places a restriction on landlords incrementing rent charges more than 10 per cent annually. Furthermore, the law requires the landlord to issue a 60 days’ notice prior to increasing any rent charges.
The Bill also imposes penalties for landlords who are found liable of unlawfully evicting their tenants; such landlords will be required to compensate a tenant three months equivalent of rent dues.
Many business-owner tenants in Kampala have filed their rent-hiking complaints to Kampala City Traders Association (KACITA).
One of the landlords at the brunt of the complaints is prominent building owner, Mr Drake Lubega, who has reportedly increased rent by USh500,000 in the majority of his arcades.
A trader renting in one of Mr Lubega’s buildings in Kiyembe, Mr Eddie Mulinde, tells just how slow his textiles business has been in the wake of the COVID-19 pandemic. Therefore, when hit with the rental rate increase he joined his fellow traders who reported Mr Lubega to KACITA, imploring him to revisit his decision.
Mr Abel Mwesigye, the KACITA chief executive officer confirmed receiving complaints about hiked rent fees from some of its members.
“The buildings are privately-owned and some decisions are individually influenced, but we can confirm that some landlords have increased rent. Recently, we tried mediating between Mr Lubega and his clients. This is a matter we can resolve through dialogue, and the landlord will listen,” Mr Mwesigye says.
In some areas, landlords are saying that the rise in operational and maintenance costs has forced their hands to increase rent.
In other areas, tenants are getting priced out of their buildings for other reasons. For example, one of the landlords in Jinja City attributes their decision to increase rental fees on Jinja’s attainment of City status.
However not all landlords are increasing rental rates for the time being, given that traders are recovering from the hard economic times of COVID-19.
For example, Mr Dick Kizito, the proprietor of Kizito Towers, says he is not considering increasing rent in light of the struggling business environment.
“Increasing rent at such a time amounts to forcing traders out of business. I know landlords have pressure from banks over outstanding loans, but its better we maintain the current rental fees,” Mr Kizito says.
Mr Moses Kalangwa, a businessman with a footprint in Kayunga, Jinja and Mukono districts, agrees with Mr Kizito. He appreciates that traders are still struggling to recover from the ripple effects of the pandemic.
“You cannot increase rent at this time, traders don’t have money and business is still slow, but we believe, we will recover gradually’’ Mr Kalangwa says.
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