Rent Law
Bill 42 of 2018 introduced article 12B to the Housing (Decontrol) Ordinance (Chapter 158) (added by XXVII.2018.4.).
This article now considerably restricts the possibility of increasing rent, by limiting such increases to 2% per annum of the open market value. Hence apart from being entitled to convert his title to a lease or to a permanent emphyteusis (depending on time frames) against a rental increase, the occupant may only be made subject to a maximum of the above-mentioned increase on the property.
Moreover, owners cannot demand eviction, even if so ordered by a court, before first seeking to increase the rent, (capped at a maximum of 2% of the open market value of the property).
Owners of properties being rented out under old rent laws have the option of filing an application before the Rent regulation Board demanding:
a) the revision of the rent to an amount not exceeding 2% per annum of the open market freehold value of the dwelling house on the 1st January of the year when the application is filed and;
b) for new conditions to be established in respect of the lease.
c) May also ask the RRB to order that rent be increased during the hearing of this application
The Housing Authority must be notified with the application ( has a right to fully participate as amicus curiae in the proceedings).
During initial stages of proceedings, RRB is to conduct a means test of the tenant based on the regulations on Articles 1531F and 1622A of Cap 16. (This means test is based on the income of the tenant of the year preceding the year when the proceedings commenced and the capital of the tenant on 31st December of the said year.
After hearing evidence and submission by both parties, the Board shall, give judgement accordingly:
This procedure also applies to cases involving lease, sub-lease, or expired home rental contract due to a court decision on the basis of a lack of compensation proportionality. This means that the amendments should also be exercised by tenants sentenced by the court to vacate a property but who failed to do so.
These conditions shall apply with regard to the occupation of dwelling houses under the title of lease created in terms of article 5 ,12, or 12A of the ordinance.
For more information contact us.
This article now considerably restricts the possibility of increasing rent, by limiting such increases to 2% per annum of the open market value. Hence apart from being entitled to convert his title to a lease or to a permanent emphyteusis (depending on time frames) against a rental increase, the occupant may only be made subject to a maximum of the above-mentioned increase on the property.
Moreover, owners cannot demand eviction, even if so ordered by a court, before first seeking to increase the rent, (capped at a maximum of 2% of the open market value of the property).
Owners of properties being rented out under old rent laws have the option of filing an application before the Rent regulation Board demanding:
a) the revision of the rent to an amount not exceeding 2% per annum of the open market freehold value of the dwelling house on the 1st January of the year when the application is filed and;
b) for new conditions to be established in respect of the lease.
c) May also ask the RRB to order that rent be increased during the hearing of this application
The Housing Authority must be notified with the application ( has a right to fully participate as amicus curiae in the proceedings).
During initial stages of proceedings, RRB is to conduct a means test of the tenant based on the regulations on Articles 1531F and 1622A of Cap 16. (This means test is based on the income of the tenant of the year preceding the year when the proceedings commenced and the capital of the tenant on 31st December of the said year.
After hearing evidence and submission by both parties, the Board shall, give judgement accordingly:
- If the test results show that the tenants do not have the sufficient means to search for alternative accommodation, they will be allowed to retain their stay in the property, on condition that the rental payment to the owners is increased up to 2% of the property’s market price at the 1st January of the year in which the application is made, including any other terms which the Rental Board may stipulate. (The board shall give due account to the means and age of the tenant, as well as to any disproportionate burden particular to the landlord) and Increase in rent may be gradual.
- On the other hand, if the means test determines that the tenant has the adequate means to find an alternative accommodation, the tenants would have to pay double the rent which would have been payable in terms of articles 5, 12, or 12A and vacate the premises within 5 years’ time.
This procedure also applies to cases involving lease, sub-lease, or expired home rental contract due to a court decision on the basis of a lack of compensation proportionality. This means that the amendments should also be exercised by tenants sentenced by the court to vacate a property but who failed to do so.
These conditions shall apply with regard to the occupation of dwelling houses under the title of lease created in terms of article 5 ,12, or 12A of the ordinance.
For more information contact us.