Rules set to outlaw annual house rent Sunday, 12 December 2010 10:38 digg living in an estate such as this is a far-fetched dream for many warking-class people,even in cities like Dar es salaam,due to exorbitant By Bernard James The Citizen Reporter Dar es Salaam. Landlords in Dar es Salaam and other towns around the country may soon be barred from demanding a year's rent from tenants if the proposed guidelines in a new national housing policy are endorsed. The long-running tradition, which forces tenants to either borrow or deny themselves to stringently save in order to raise 12 months' rent, is one of the toughest challenges, especially for newly employed people, who can hardly accumulate the money to pay up. And working to the landlords' advantage is the acute housing shortage in the urban areas. As part of a plan to seek solutions to the serious urban housing crisis, the government is drafting and will soon table for discussion by various parties, the new policy, which also seeks to stimulate investments and rescue overburdened tenants from profiteering house owners. Sources in the government told The Citizen on Sunday that among the issues being considered is a recommendation on the maximum period for which a landlord can demand rent upfront. "Even though the draft policy has yet to be debated by the public, there is a strong case for fixing such a time at just under three months," one official close to the drafting team in Dar es Salaam, who asked not to be named, said. Contacted for comment, the Permanent Secretary in the ministry of Lands, Housing and Human Settlements, Mr Patrick Rutabanzibwa, confirmed that the proposed policy was in the final stages of drafting for debate before finally being forwarded to Parliament for enactment. Mr Rutabanzibwa, who did not wish to discuss the details, said all the stakeholders would have an opportunity to air their views. However, he acknowledged that the feasibility of setting a controlled time interval for paying housing rent would be discussed. But the PS clarified that this should not be construed to mean the era of state intervention in investments or price controls was back. "The guidelines are meant to encourage more investments in rental housing and balance the interests of both the tenants and the landlords so that no one is overburdened by the other," he said. Thousands of tenants in the major towns, particularly Dar es Salaam, face a most agonising and frustrating time at the hands of bullying landlords, who arbitrarily raise rent and force them to pay on a biannual or annual basis. For business premises, some landlords are now said to be demanding up to two years' rent, locking out most traders in the middle level, who end up in makeshift stalls. Lack of a legal framework or body to regulate rents and leasing contracts is blamed for the situation, which also adversely affects low income employees, who are forced to surrender over 80 per cent of their monthly earnings to have a roof over their heads. "Landlords are taking advantage of the legal vacuum and the acute shortage of rental houses to set illogical and extremely high rents and alter housing contracts before imposing a string of unfair conditions," said Mr Andrew Magesa, a tenant in Dar es Salaam's congested Sinza suburb. He said some landlords demanded payment in United States dollars, defying government warnings. Today, a junior public servant earning Sh200,000 a month, is forced to fork out between Sh150,000 and Sh200,000 a month to rent a standard two-bedroom unit in a few secure estates. The exorbitant rents have driven some to occupy single rooms for which they pay between Sh40,000 and Sh80,000 or even Sh100,000 depending on the location. Compounding the situation, are the dreadful middlemen/incorrigible brokers, commonly known as "madalali", who collude with some landlords to inflate the rents. And in a country where the cost of construction is spiralling out of control, fewer and fewer Tanzanians are building their own houses. Recent studies have shown that 70 to 80 per cent of urban dwellers are tenants, with house owners making only up to 27 per cent of households. Mr Rutabanzibwa said the frustration for tenants was mainly due to the acute housing shortage in the country. "When you have plenty of houses, rents will automatically drop," the PS said. The National Housing Corporation (NHC) management has put the shortage at over 3 million units countrywide. The PS said the NHC was being restructured as part of a plan to equip it to increase the stock of regulated and affordable housing for dwellers. Mr Rutabanzibwa said the establishment of mortgage financing would also help minimise the crisis. The Trade Union Congress of Tanzania (Tucta) blamed the situation on the lack of a regulatory body or a tenants' lobby to determine the standards for the relationship between them and landlords. Secretary General Nicholas Mgaya told The Citizen on Sunday that the housing crisis was one of its top reform agenda items because exorbitant rents had severely eroded members' economic base. "Despite earning millions, many landlords do not even pay income tax, while employees who earn measly wages sustain them." For many years, the Tanzania Tenants' Association (TTA) has largely remained a moribund outfit, lacking a tangible strategy and vision. However, its officials have occasionally come out to call for the re-establishment of the Rent and Land Restriction Board that was abolished over a decade ago. When the Rent Restriction Act of 1984 was in force, Tanzania was viewed as one of the countries with excellent protective tenant laws. Under the law, rent adjustments or increases, eviction processes and other were minimal and subject to the approval of the housing tribunal. However, the law has since been repealed and replaced by The Courts (Land Disputes Settlement) Act 2002, which became operational in March 2002. Many tenants are against the new law, which they say, "completely favours landlords".