News Local Property owners say rents subject to private arrangement

Property owners say rents subject to private arrangement

Landlords and tenants should make their own arrangements where necessary, an association representing property owners said on Tuesday amid debate on whether rents should be subsidised, slashed or suspended altogether.

Legislation has already been adopted prohibiting evictions of tenants who fail to pay their rents.

But there have been calls from small business owners (Povek) as well as from the Employers and Industrialists Federation for the state to intercede particularly to help those businesses that have been closed by decree.

The association of property owners (KSIA) said it recognised that some businesses may face a cash flow problem because of the lockdown, but said the problem varied from company to company.

Good entrepreneurs would have cash available to cover expenses for a few months and if the state felt it wanted to help some tenants, then it should subsidise the rent or give cash credits to tenants it wanted to help, it added.

But rental agreements were private contracts and any legislation intervening in this private contract would have constitutional flaws, it argued.

It therefore suggested that just like in 2013, there should be private arrangements between landlord and tenant and for the market to regulate rents.

In cases where the tenant is in a stronger financial position than the owner, there should be no reductions.

A lot of owners have non-performing loans and therefore cannot benefit from the suspension of loan instalments which is only for those with performing loans, it added.

If they fail to pay the full amount of their instalments because of rent cuts, they may then face foreclosure, the association warned.

Regulating rents was a complicated and multi-dimensional issue and any effort to regulate it en masse will transfer the problem from one group of citizens to another.

This was not only unfair but illegal, it concluded.

 

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