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.
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.