Tenancy Act’s Second Coming

A joint sitting of Parliament has passed the Tenancy Act (amended) yesterday.  It will come into force once it receives Royal Assent.

But the parliament endorsing the Act didn’t stir a public discussion like when it was first proposed in 2004.  Forced by urban growth and pressure on housing, the need for a legislation to streamline house rent was felt more than a decade ago.  The Act was passed in 2004.  Not much has changed since, except that the Act was a good reference point for failed legislation.

What difference can we expect with the amended Act?

The few that followed the parliament session are not so eager.  They feel that, with or without the Act, there will be no control over house rents.  That it will be market forces that would determine house rent and not the Act.  This is because implementing the Act was not as easy as legislators then surmised.

Landlord won’t sign a deed as mandated by the Act because they know there are one too many tenants wiling to rent.  With houses in short supply and an urban population on the rise, both tenants and landlord bypassed the law.  Nobody cared to intervene.  The dispute settlement body had no cases as nobody brought one.  It was straightforward, according to the unwritten law.  Rent or look for another.

A lot has changed since then.  We have a better law and circumstances have changed.  The trend, according to landlords, has reversed.  There is a shortage of tenants today, if it is only a temporary situation.  With almost all the local area plans opening for development, construction of buildings has soared after it slowed down in 2012-13.  In fact, tenants have more choices and, for the first time, landlords are worried about not getting tenants.

They have loans, huge loans to repay, and are ready to negotiate rents.  But all these are not healthy, even if we do not sympathise with the landlords.  What is good is to implement the provisions of the law and adhere to them strictly.  Tenants would like to be protected by laws from exploitation, and landlords would find laws useful when they run into trouble with troublesome tenants.

The Tenancy Act, although covering many sections, it is rent that dominated the discussions.  Rent will be increase when cost of construction increases.  It is basic economy.  As both tenants and landlords wait to be covered by the Act, there are other issues that directly correlate to the issue of rent and need attention.

For instance, we also need practical policies, like a control on the price of construction materials, and cheaper loan conditions that will encourage affordable housing.  While most of the raw materials are beyond our control, those that are easily available, like sand and stone, are also getting dearer by the day, shooting up cost of construction.

Another issue that keeps cropping up is taking development out of Thimphu.  Despite policies that emphasise a distribution of government organisations, new organisations and institutions cannot go beyond popular towns, like Thimphu and Phuentsholing.

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