Problems on Hold
In my last editorial, I went through the new bill to amend rentals of non-residential housing, and its expected aftermath. I explained that once passed, the new law would reinstate justice long overdue regarding non-residential rentals. This amendment serves public interest, not the interest of one sector to the detriment of another—meaning tenants versus landlords—thus upholds the Constitutional principle which bans discrimination.
The conditions that prescribed the freeing of non-residential rentals are the same as those that apply to residential rentals, a fact which today drives me to open the file of rental values of ‘old’ residential units. To date, the political will to tackle this file is absent, despite the fact that it flagrantly violates public interest, and tips the balance towards the interest of tenants to the detriment of landlords, thus violating the Constitutional requirement of non-discrimination. The old rental law has not only favoured tenants over landlords for some seven decades, but also discriminates between tenants and landlords with rental contracts in force before 1996, and those with post-1996 rental contracts. In 1996 the rental law was adjusted, setting no ceiling or time frame for rentals in contracts drawn after that date, and leaving the landlord-tenant relation to the market law of supply and demand.
The unjust conditions that govern residential housing rentals regulated by the pre-1996 law are the same as those of the non-residential housing rentals that will change once the new law is passed. To add insult to injury, many tenants of old residential units move to new satellite towns, yet they never give up their old houses; they simply close them down since the cost of holding on to them is insignificant. In doing so, they neither make use of their old houses nor do they allow the landlord to make use of them by renting them under the post-1996 rental law should they leave them. But why should they? The annual rent of an old home under the 1960s rental law is far below the cost of a takeout meal for one person in any Cairo restaurant. This appalling situation has also been behind the dilapidation of buildings that include closed units, and the decline in their facilities and maintenance. The many closed units also exacerbate the crunching housing shortage.
Curiously, the beginning of 2017 saw the House of Representatives’ Housing Committee discuss a bill to regulate the relationship between landlords and tenants of residential housing units. The bill encompassed a clear, reasonable vision to recover the long overdue justice between landlords who had become “landlords on paper only” since they were no longer able to benefit from their property, and tenants who had become “usurpers of property” owing to the meagre rent they paid for life.
The bill to regulate the relationship between landlords and tenants of residential housing units suggested a 10-year transition period that would begin the date the law is issued, during which time the frozen rental values would be re-evaluated, taking into consideration the condition, location and particularity of the unit or units in question. The original contract should expire by the end of the 10 years, breaking the relation between tenant and landlord, yet giving the old tenant priority in case he or she is interested in keeping the unit under a new rental law.
The 2017 bill stipulated the formation of special committees in all governorates, responsible for assessing the rented residential units from all angles, including location, neighbourhood, proximity to places of interest such as beaches or gardens. According to the bill, the committees would also assess the condition and standard of the building as well as the condition of its facilities. Accordingly, the committees would be able to recommend adequate rental values for the units. The relevant administrative authority would issue the decision to form those special committees, each including as members a representative of the landlords, a representative of the tenants, and one of the tax authority. The bill suggested that the new rental value the committee decides upon would be applied progressively over 10 years at the end of which it would have reached its full value.
Unfortunately this serious, fair vision never saw light and never transpired into a law to free rentals of old residential units. And sadly, the political will to achieve this is still lacking.
7 July 2019