Buganda Kingdom has described the Landlord and Tenant Bill, 2018, as ‘unfair to landlords’ giving too much favour to tenants.
Namulondo Investments Limited, an arm of Buganda Kingdom in charge of management and development of property, appeared before Parliament’s Committee on Physical Infrastructure to present the Kingdom’s views on the Landlord and Tenant Bill, 2018.
The Company led by the Chief Executive Officer, Lillian Kaddu Sentamu, said that the Bill criminalizes acts and omissions on the part of the landlord however trivial but fails to set the same standards for the tenant, the highest sanction for the tenant being termination of tenancy.
“The penalty of imprisonment for increment of rent is preposterous,” said Kaddu.
The Landlord Tenant Bill, 2018 seeks to regulate the relationship of landlord and tenant; to reform and consolidate the law relating to the letting of premises; and to provide for the responsibilities of landlords and tenant in relation to the letting of premises.
Kaddu said that criminal liability and reduced redress options to landlords shall lead to reduction of stock on the market, consequently retarding the real estate sector.
She advised that the Bill should instead target to improve or expedite redress for both the landlord and tenant in case of breach and facilitate the end relationship without loss to either party in case of a strained relationship.
“The Bill should amplify the sovereignty of freedom of contract and allow it to cater for different and complex transactions,” said Kaddu.
She also proposed that the Bill should clearly define annoyance, saying that ambiguity will increase the instance of conflict.
The Bill provides that a landlord shall not subject a tenant to annoyance and prescribes a fine of up to Shs3 million or imprisonment of one year, or both for a landlord who subjects a tenant to annoyance.
“I might meet you on the stairs and ask you to pay my rent and you say I have annoyed you. This Bill should come out clearly on what constitutes annoyance,” said Kaddu.
She further proposed dropping or amending clause 27 of the Bill that provides that a landlord shall not increase rent at a rate exceeding 10 percent annually or any other percentage as may be prescribed by the minister.
“Landlords make capital expenditure when improving their properties so as to observe their obligations in a tenancy agreement. Rent should thus be set against a reasonable dynamic benchmark rate that recognizes changes in cost of finance, inflation and currency fluctuation,” said Kaddu.
Hon. Richard Okoth Othieno (NRM, West Budama North) however said that criminalizing breach of contract by landlords is meant to protect the tenants who are most times treated unfairly by landlords.
“Landlords behave in an inconsiderate way, sometimes they are unreasonable. Why are you uncomfortable with criminalizing behaviour that causes discomfort to the tenant,” said Othieno Okoth.
Hon. Jonathan Odur (UPC, Erute South) said that scrapping of rent caps would not be favourable for the tenant.
“Consideration should be made to allow the Minister to prescribe the increment rate by statutory instrument,” he said.