Out with the old IN WITH THE NEW

Ekaruna - - Special Report -

A new rental law that in­curs grad­ual in­creases in the value of residential lease con­tracts signed be­fore 1992 will go into ef­fect on De­cem­ber 28.

Ac­cord­ing to the new law en­dorsed by par­lia­ment last April, ten­ants un­der pre-1992 rental con­tracts will face rent in­creases in yearly in­cre­ments over a sixyear pe­riod, un­til an­nual rent costs reach 5 per­cent of the cur­rent mar­ket value of their res­i­dences.

Ten­ants whose in­come does not ex­ceed three times the min­i­mum wage will ben­e­fit from state fi­nan­cial aid to cover the in­crease in rent fees. The to­tal dif­fer­ence in rent prices will be paid to land­lords us­ing a spe­cial fund to be es­tab­lished by the gov­ern­ment for this pur­pose.

For ten­ants whose in­come is be­tween two and three times the min­i­mum wage, the fund will cover the dif­fer­ence be­tween the new rent price and 30 per­cent of their in­come while those whose in­come is less than two times the min­i­mum wage will see the fund pay the to­tal cost dif­fer­ence on their be­half.

Dur­ing year one, the ten­ant will pay, on top of the cur­rent rent, 15 per­cent of the dif­fer­ence be­tween the old rent cost and 5 per­cent of the cur­rent mar­ket value of the res­i­dence.

Dur­ing each of the sub­se­quent three years, an ad­di­tional 15 per­cent will be paid while on the fifth and sixth year, an ex­tra 20 per­cent will have to be paid by ten­ants be­fore the rent cost reaches its fair value in year seven and is paid ac­cord­ingly un­til the end of the ninth year.

Af­ter the ninth year, lower in­come house­holds will be able to ex­tend their stay un­til the 12th year while other ten­ants will have to ne­go­ti­ate a new agree­ment with land­lords or evac­u­ate the res­i­dence.

Ac­cord­ing to the cur­rent rent law, land­lords can ask ten­ants to evac­u­ate their res­i­dence for two rea­sons: de­mo­li­tion or the ac­com­mo­da­tion of a land­lord’s fam­ily mem­ber.

If ten­ants are asked to leave the premises dur­ing the first year of rent ad­just­ments for de­mo­li­tion pur­poses, the land­lord will have to pay a com­pen­sa­tion equiv­a­lent to six times the new an­nual rent.

Land­lords who re­quest ten­ants to evac­u­ate for fam­ily lodge­ment pur­poses will have to pay com­pen­sa­tion amount­ing to four times the new an­nual rent. Com­pen­sa­tion grad­u­ally declines to reach nil af­ter nine years.

In the event of a dis­agree­ment over the com­pen­sa­tion amount or the es­ti­ma­tion of the cur­rent mar­ket value of rented res­i­dences, ten­ants and land­lords will have to re­sort to Le­banese courts to set­tle the dis­pute.

The law ap­proved by law­mak­ers had stip­u­lated the des­ig­na­tion of a spe­cial com­mit­tee to es­ti­mate the cur­rent mar­ket value of rented res­i­dences, de­ter­mine com­pen­sa­tions for low-in­come fam­i­lies and re­solve dis­putes that arise be­tween ten­ants and land­lords.

How­ever, last Au­gust, the Con­sti­tu­tional Coun­cil deemed two ar­ti­cles of the law per­tain­ing to the des­ig­na­tion of the com­mit­tee un­con­sti­tu­tional, rul­ing that it was the ju­ris­dic­tion of Le­banese courts to re­solve any le­gal dis­putes that arise be­tween ten­ants and land­lords.

The law still stands in­de­pen­dently of the two re­voked ar­ti­cles, ac­cord­ing to law­mak­ers.

While there are no of­fi­cial sta­tis­tics on the num­ber of fam­i­lies who ben­e­fit from rental con­tracts signed be­fore 1992, the as­so­ci­a­tion rep­re­sent­ing ten­ants ar­gues that the num­ber is close to 200,000 fam­i­lies.

On the other hand, rep­re­sen­ta­tives of the Land­lords As­so­ci­a­tion ar­gue that only 13,000 fam­i­lies should ben­e­fit from the spe­cial fund to be es­tab­lished by the state.

Ac­cord­ing to land­lords, the ma­jor­ity of ten­ants pay min­i­mal rental fees that of­ten amount to less than LL1,000,000 an­nu­ally. The re­cently en­acted law stip­u­lates that ten­ants wish­ing to buy a new apart­ment have pri­or­ity in ob­tain­ing sub­si­dized loans from the Banque de l’Habi­tat or the Public Cor­po­ra­tion for Hous­ing.

Cour­tesy of Hasan Shaa­ban

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