For Rent

The government has rejected calls by a section of Kenyans to compel landlords into cutting rents amidst the economic turmoil and to protect tenants from eviction as a result of failure to pay.

Treasury Cabinet Secretary said such a gross move would kill the real estate industry, and that the government would only plead with landlords to be sensitive to the current economic situation and come up with a win-win solution for both them and tenants.

Hundreds of thousands of workers have been laid off over the past month while several others have had their pay reduced or businesses closed in reaction to the coronavirus pandemic.

CS Yattani said several Kenyans whose income has been jeopardized have called him to request direct intervention by the government in waiving rents but said the government would not be part of it.

“We decided that calling for a reduction of rent could destroy the industry,” he told the Financial Standard.

Commercial real estate companies have shown a willingness to compromise on rent with some already making cuts for tenants but most individual landlords have stood their ground fearing for their own incomes.

The International Monetary Fund (IMF) is one of the international organizations that has weighed in on the global matter by asking governments to come up with policies that protect both landlords and tenants.

Collective action by financial institutions responsible for mortgages suspending payments for a number of months, for instance, is one of the ways in which some governments have enabled landlords to also reduce rents.

CS Yattani said that the government has already set in motion tax reforms to cushion Kenyans and increase the purchasing power of low-income earners if they retain their current level of income.

However, the Parliamentary Budget Office had suggested a more comprehensive intervention package for landlords and tenants including a proposal allowing landlords to suspend rental payments for a specified number of months with a provision to offset an amount equal to the value forfeited in the residential income tax.

The budget advisory agency said that this would carter for most Kenyans in the informal sector and the unemployed who will not benefit from the government’s tax relief. It is not clear whether the government will adopt such a policy in the near future.

Related; Kenyan bank offers mortgage owners 3-month break

Also Read; Hotel and retail property sectors hardest hit by COVID-19 globally

Featured Properties

Pristine 4-Bedroom Townhouse in Runda
Asking Price KSh 38,000,000
Beds:   4 Baths:   4
5-Bedroom house for sale/rent in Lavington
Asking Price KSh 68,000,000
Beds:   5 Baths:   5
List of Land Available for Sale
Asking Price KSh 21,000,000