Striking a tenancy balance

May 26, 2009 (Al Bawaba delivered by Newstex) -- By Ebtihal Mahadeen

On the sidelines of the tug-of-war between landlords and tenants, 30 MPs and three Cabinet ministers opened the way for citizen callers to express their points of view?during a meeting on April 15 to discuss the ramifications of the proposed amendments to the Landlords & Tenants Law.
The move illustrates the importance of the proposed amendments to the Law, a law which has caused consternation and discontent since 2000 when it replaced the Landlords & Tenants
Law of 1994. The problematic Article 5 of the present law states that all tenancy contracts signed before 2000 will expire by 2010 unless there was an agreement between the landlord and the tenant, contrary to what the 1982 law had it that ?the tenant may extend his tenancy even after the expiry of its contracted duration?.
The potential ramifications of Article 5 which considers all tenancy contracts null and void by 2010 prompted the government, by directive from HM King Abdullah II, to propose further amendments to the law in January of this year. The King has called on the executive and legislative branches to come up with practical solutions to the dilemma caused by the law, in a way that guarantees social security and justice for both tenants and landlords. The amendments were approved by the Council of Ministers after a national debate moderated by the Ministry of Justice involving commerce and industry chambers, civil society organizations, and other institutions. These amendments currently await approval by the Lower House of Parliament which is set to discuss them during the Parliament"s extraordinary session in May.
The amendments to Article 5 sought to minimize the economic and social pressures bound to occur if it was implemented in one go. One amendment divided tenancy contracts into three categories: Contracts signed before 1/1/1984, which would be extended to 31/12/2013; contracts signed between 1/1/1984 and 30/8/2000, which would be extended for 30 years as of the signing date; and contracts signed after 31/12/2008 which would be extended for at least three years for residential and five years for other tenancies. Beyond these deadlines, tenants must vacate their rented properties unless they reach an agreement with their landlords otherwise.
A second amendment sought to protect the interests of landlords by proposing adjustments to old rents in three categories as well: A 5% increase to be added to rents of properties let before 1/1/1976 for every year of tenancy if the property is residential, 7% increase if it"s rented as public utility, and 10% if its rented as commercial entity; for contracts signed between 1/1/1976 and 31/12/1991, a 2.5% increase is suggested if the property is residential or rented as public utility and 5% if it"s let for other purposes; for contracts signed between 1/1/1992 and 30/8/2000, a 2.5% increase is suggested, regardless of the type of tenancy in the contract. The amendments also proposed changing the title of the law to become ?The Real Estate Law?.
During the public hearing session hosted in the Lower House of Parliament on April 15, the Legal Committee opened the floor for input from citizens and ministers alike. Minister of Justice, Ayman Odeh, put the scope of the problem in numbers: ?A third of all rented properties have contracts signed before the year 2000, equal to 71,882 contracts according to a 2004 statistical study,? he said.
In an attempt to offset understandable public displeasure at the proposed increases in rent, Odeh clarified that ?according to a study conducted in 2006 by the Housing and Urban Development Corporation, 50% of all tenants have higher incomes than their landlords?, indicating a need to readjust rents to accommodate income levels.
A second open meeting between the legislators, ministers, and the public took place on April 20 amid reassurances by MP Mubarak Abu Yameen, head of the Legal Committee in the Lower House of Parliament that ?the committee wants to form a well-rounded opinion of the issue and to achieve justice upon ratifying the amendments to the law?.
?The Legal Committee will continue to solicit input from citizens through the Parliament"s website, www.representatives.jo, or by e-mail at lgl.comm@representatives.jo, or through the phone on 5635262,? Abu Yameen said. He added that the Committee ?will later hold closed meetings to discuss the proposed amendments and will consult with judges in order to come up with the best possible scenario before ratifying the law in its final form?.
Mounting pressure, from landlords and tenants for the Lower House of Parliament to come up with a final draft of the law to suit each side"s contradictory interests, is bearing heavily on the deputies. It is no secret that mass evacuations could cause economic and social disruption and civil unrest; this traumatic scenario is what drove the government to suggest the legalization of evacuations in three categories.
A legitimate question at this point would be: How did the 13th Parliament ratify a law that calls for mass evacuations in 2010? Head of Legal Affairs at the Lower House of Parliament, Ghassan Najdawi, told The Star, ?The Parliament at that time did not anticipate the problems that could arise from the law. They didn"t expect real estate prices and rents to go up so much. Both Parliament and Government considered that ten years" time would be a long enough break for tenants to renegotiate their contracts, or to evacuate if necessary.?
Hashem Abdul Fattah, an apartment owner, called the new law ?fair? and said that it ?helps landlords cash in on their properties?. But he warned of ?social chaos if people were left to decide what happens to others without governmental supervision?.
Landlord Karam Hamed believes that the law has always preserved the rights of the tenants, at the expense of the landlord. ?Being a landlord doesn"t mean that one is filthy rich, who could make do without the rent income. It is totally incomprehensible that some buildings which are worth millions are leased for very little, not enough to sustain the owner"s living expenses. The law should preserve both the landlords" and the tenants" rights without bias to either side, and I doubt any law could maintain such a balance.?
However, Samira, a housewife, who lives in a rented apartment in East Amman, holds the opposite view as she warns of social unrest and crisis that would result in 2010 if this unbalanced law is not amended before then. ?To leave the Law as is without any amendment will create havoc and will lead to throwing tenants into the street, whereby a homeless society will emerge, since no alternate housing is available,? she said.
In a study conducted by the Amman Center for Human Rights Studies, published in July 2008, researchers indicated that Parliament"s calculations were disrupted by the sudden influx of Iraqi refugees starting in 2002 and the increase of Palestinian refugees" influx in the country since the 2nd Intifada in 2000. These two factors, the study maintains, caused a sharp increase in real estate prices and led the vast majority of tenants to remain in their rented properties without having plans for the future.
The study recommends that a legal separation be made between residential and commercial tenancies, and suggested that the government form a committee to reevaluate the Real Estate Law in the future to prevent a similar crisis. It also advocates amendments to the 2000 Law to balance the interests of landlords and tenants. The current parliamentary activity indicates that it has heeded this advice and moved towards concrete actions to avert a socio-economic disaster. It remains to be seen if the outcome could herald a delicate balance between tenants and landlords, and prevent the slide into the unknown
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