Wednesday, September 19, 2007

Ramadan bonanza

A report says:

MUSCAT –– The Council of Ministers yesterday decided that rent for properties should not be increased by more than 15 per cent of the current rent value during the next two years.

This will provide citizens the much-needed respite from mindless rent hikes happening for the last one year. The rent cap of 15 percent holds good for existing tenants, but what will happen for people who want to move/shift to new premises wherein a new lease agreement will come into effect? I am sure the landlords will find some loopholes to beat the system. It so happened that recently a person changed his flat from third floor to second floor in the same building with same dimensions, and got his rent jacked up by RO 35 in the new agreement!

Who will bell the cat?


JP said...

Interesting. I'm normally all for the free market in such situations and am not a big fan of such clumsy market interventions, but the problems in Oman with leaving it free are:
- expats don't have the option to buy or build a place, they can only rent.
- contracts don't seem to be very well enforced, enabling landlords to take easily advantage of tenants.

So, if it really means something, I could support this, as 15% seems a fair hike. But, as many people are on annual leases, presumeably the landlord can just not renew the lease and then charge the new tenant whatever they want. It will then just end up forcing lots of people to play muscial chairs with their houses and still pay more rent.

So I agree, it seems unlikely to work. Maybe just a way of being seen to do something, but not actually taking time to really solve the fundamental problems.

I hope it works though...

Kishor Cariappa said...

A lot depends on its implementation. Let's hope 15% is meant for across the board.

allen said...