Affordable housing

Landlord and Tenant Bill

August 17th, 2021

On Thursday, July 29th 2021, FSD Kenya made oral submissions to the Parliamentary Committee reviewing the Landlord and Tenant Bill 2021. The session was chaired by MP for Pokot South, Hon. David Pkosing, and attended by high-level delegates from several public agencies including the State Department of Housing which drove the bill formulation (Principal Secretary Charles  Hinga and Housing Secretary Mr. Patrick Bucha), State Department of Trade and Enterprise Development (PS Ambassador Weru), Residential Rent Restriction Tribunal (Chair Mr. Hilary Korir and Vice-Chair Ms. Beatrice Mathenge), and Business Premises Tribunal (Chair Mr. Cyprian Mugambi) and National Gender & Equality Commission members.

FSD Kenya’s full oral submission is attached HERE. FSD noted several improvements and attempts to modernise the regulatory framework relative to the current statutes which are set to be repealed. This Bill is extremely important as 82% of Kenyans in urban areas lived in rented dwellings.

FSD Kenya’s key suggestions for assisting the bill meet its intended result include:

  • Specifying strict timelines for determination (reduce from current 3 months with possible extension to a flat 45 days with predefined days for each step);
  • Integrating digital platforms to log and track dispute resolutions and the determined market rents (which would become an invaluable market-making mechanism),
  • Promoting equitable risk-sharing mechanisms by tying period before the landlord can evict a tenant to be tied to deposit held by the landlord, reduce the period for which landlord must safeguard tenants good and housing unit in case of death or abandonment by the tenant
  • Ensuring the rent ceiling to which the Act will be applicable be determined with public consultation and reviewed every 5 years

FSD Kenya also emphasised measures that could have far-reaching financial inclusion outcomes, based on the Making Markets Work for the Poor framework. These are worthy of inclusion in the appropriate legislative framework and include:

  1. Supporting the creation of positive credit histories for tenants who pay their rent diligently to enable them to access credit for their economic empowerment. FSD would also support the implementation of such a law if enacted, given our experience in developing the movable property collateral registry.

  1. Providing a modest flat tax of say, 3%, on gross rents for units rented for less than KShs. 15,000 per month gross. This figure can be indexed and the flat tax made applicable no matter the size landlord’s portfolio in this income bracket– only then will institutions be incentivized to invest and develop massive housing units needed to cater for those living in informal settlements.

FSD reaffirmed its commitment to support policymakers and the public to create an enabling legislative framework to develop affordable housing markets.

There was very strong attendance from business and public stakeholders in person and on the parallel zoom platform, including ICPAK (Institute of Certified Public Accountants of Kenya), ISK (Institute of Surveyors of Kenya), IQSK (Institute of Quantity Surveyors of Kenya), Licensed Auctioneers of Kenya, KEPSA (Kenya Private Sector Alliance) among others.

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