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MPs Want Commercial and Residential Properties Regulated by Single Law

Their views, contained in the report by the committee on physical infrastructure on the Landlord and Tenants Bill 2018, go against the proposal of the real estate dealers who argue that both subsectors have different characteristics and therefore should be regulated separately.
A house for sale in Mbuya. Real estate players want different laws for residential and commercial tenancies. Photo by Knight Frank Uganda
Members of Parliament have said they will not enact separate laws to regulate commercial and residential properties.

Their views, contained in the report by the committee on physical infrastructure on the Landlord and Tenants Bill 2018, go against the proposal of the real estate dealers who argue that both subsectors have different characteristics and therefore should be regulated separately. 

The MPs observed in the report: “The major justification for the delineation is to cater to the intricacies and peculiarities involved in the financing arrangements and management of business tenancies which are different from residential tenancies. Residential tenancies have a higher component of social security considerations while business tenancies have strict business-oriented terms.”

They went ahead to conclude that these could be catered for in the same law.

“The Committee, however, observes that enacting separate laws for residential and business tenancies is not feasible since most of the provisions in the Bill are applicable to both tenancies,” the report says.

  “In any case, several countries such as South Africa have the same laws for both residential and business tenancies. The Committee is of the considered view that the peculiarities of the different tenancies can be taken care of within the same law.”

  This will not go well with real estate actors. Judy Rugasira, the Executive Director of Knight Frank Uganda, an estate agent, had earlier said that the best practice and empirical evidence from other countries have shown that commercial and residential uses are legislated under separate Acts since residential and commercial tenants and landlords have different requirements which cannot be addressed within the same law.

The bill had suggested that meter be put for sewerage of a commercial building. Developers termed this outrageous with Rugasira asking: “Can framers of this bill inform us as to how you meter sewerage of a commercial building? And yet commercial buildings will levy a service charge which takes care of this for the entire building as a whole.”

The MPs will next week continue debating the report, but Kampala Central MP Muhammed Nsereko added his voice to those who want a clear distinction between residential and commercial properties.



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