• Tue. Oct 3rd, 2023

Real Estate Billionaires, Sudhir Ruparelia & Godfrey Kirumira for Landlords, KACITA for Tenants: Landlord and Tenant Bill 2021

UGANDA, Kampala | Real Muloodi News | Parliament’s Physical Infrastructure Committee is currently scrutinising the Landlord and Tenant Bill 2021. Real estate muloodis Sudhir Ruparelia and Godfrey Kirumira were before the Committee today, to represent landlords and developers’ concerns in Kampala in relation to the Bill.

The Suggestions of Kampala Landlords’ Representatives Concerning the Bill

While appearing before the committee, Sudhir Ruparelia and Godfrey Kirumira said that provisions of the Bill excessively protect the tenant over the landlord.

The developers asked parliament to make some changes in clause 6(4) that require the landlord to give the tenant 24-hour notice to enter the premises, by providing an exception in case of emergencies requiring the landlord to enter the premises instantly.

Landlords also proposed modifications in clause 7(1) requiring the landlord to keep the premises in good shape. Here, Sudhir asked MPs to ensure this clause places the same responsibility on the tenant, saying they cannot expect the landlord to keep the premises in good repair when the tenants are in occupation.

The developers opposed clause12(1) that requires landlords to install a prepaid electricity meter in each of their units on a building, saying the proposal is out of touch with realities on the ground.

Sudhir also wondered why the proposal assumes tenants do not benefit from electricity consumption in common areas of the property.

“The clause should be omitted from the Bill. The obligation to provide pre-paid electricity meters is on UMEME, not the landlord. If Umeme cannot provide, why should the landlord be penalised?” remarked Sudhir.

The landlords and developers are also against a proposal in clause 27 that requires three months notice to increase rent, and that the increase shouldn’t be over 10% in a year. The tycoons argued this should be left to the market forces of demand and supply.

Property owners have also protested clause 23 of the Bill stipulates that all rent has to be paid in shillings instead of dollars.

The landlords say MPs should therefore go after Uganda Revenue Authority (URA), who charge the landlords in dollars.

Conversely, the MPs disagreed with landlords on charging rent in US dollars. They insist that the new law should provide for rent payment for Uganda shillings. In case of a sharp increase in the dollar rate, MPs say the commoner will be frustrated.

The two businessmen representing the landlords in Kampala argued that most of the construction materials used in their buildings are charged in the dollar currency, which leaves them with no option but to use the same rates.

“Our view is that all our tenants pay in shillings that are equivalent to dollars. If URA which the tax engine is basing its taxes in dollars, then what about the ordinary business man? When I import things or travel and come back to Entebbe [International Airport], the government of Uganda charges me in dollars,” Sudhir said.

However, Sarah Opendi, the Tororo District Woman MP, suppressed the developers’ arguments defending the proposal in the Bill, saying the move, if adopted, would help strengthen the local currency and urged the landlords to embrace and be proud of the shilling.

“Why are we not proud of our shilling? Why are we not promoting it? When you go to Kenya, irrespective of where you come from, you are told that you are supposed to transact in Kenya Shilling. But when you move around in some places here, the first thing they will tell you is to charge you in dollars,” Opendi said.

However, Sudhir defended his stand, saying parliament should insert a clause in the Bill for both tenants and landlords to agree on the currency they want to transact their business rather than lawmakers dictating on such a business relationship.

However, Maurice Kibalya (Bugabula South) fired back at Sudhir, saying parliament had taken a rational decision and agreed to have rent paid in shillings. He added that the provision of dual currency would disadvantage tenants who have lesser bargaining powers in such a transaction.

“These tenants, you see, are disadvantaged. They aren’t tenants by choice but factors. For the foreign exchange as rent payment, no, if somebody wishes to pay in foreign currency, that will be his choice. You are free to use this on your side, but we cannot the dual tenancy payment in the law. The landlord will insist and say since it is dual, me I want in foreign exchange and we shall not be there again to call back the law,” said Kibalya.

The Suggestions of the MPs and Tenants Concerning the Bill

MPs insist that tenants have been exploited for a long time, thus requiring a law to address their plight.

When tenants under Kampala Capital Traders Association (KACITA) appeared before the Committee, they pleaded with the Committee to solve the high charges on utility, claiming some are charged as much as USh 800,000 per month.

MPs in the Physical Infrastructure Committee also want a law that bars tenants from paying rent in emergency times enacted.

Sarah Opendi and fellow lawmakers affiliated with the KACITA business community supported the proposal.

Opendi, the energy minister, reasoned that it’s unfair for tenants to pay rent when struck with disasters or other emergencies. Case in point, the COVID-19 lockdowns brought businesses to a standstill and shops were closed.

Opendi also gave the example of the twin bombs in Kampala that took lives, destroyed property, and halted businesses. Opendi said the proposal to bar tenants from paying rent in such an emergency would decrease the possibility of people going out of business.

On this, Mr Issa Ssekito, the KACITA spokesperson, said the law would benefit tenants. However, he feared landlords would fire back.

Additionally, KACITA leaders, on behalf of the tenants, asked parliament to reverse the decision by landlords requiring tenants in parts of the city centre to pay rent in US dollars.

“It is important that we respect the Uganda shilling because it is the basis upon which we shall value it. If you don’t give weight to the Uganda shilling, nobody else will respect it,” Mr Ssekito said.

Mr Ssekito further stated, “so the time to notify someone to increase rent to KACITA, we think it is still reasonable because if you are going to increase my rent for three months, I would have a reason or a chance to either vacate after locating a different place where I am going to work from or organise and be ready for your increment.”

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