January 20, 2017

Rental law modified by Parliament: Changes to fund’s legal structure, includes more beneficiaries

Parliament has ratified modifications to the rental law. The original rental law went into force in 2014.

The ratification has produced two main modifications: The fair lease value of apartments has been reduced from five to four percent of an apartment’s value. The second one relates to the legal structure of the assistance fund that subsidizes old rent tenants by paying the difference between the old and new rental cost.

Adib Zakhour, Head of the Committee appealing the rent law, said: “The fund was transformed into a financial account.” The account will be run by the Ministry of Finance.

Joseph Zoughaib, Head of the Syndicate of Owners of Leased Buildings, said: “The structure was changed in order to simplify the process.”

The scope of account beneficiaries has expanded. Previously, beneficiaries were households whose income does not exceed three times the minimum wage ($1,350). The account will now help households whose income is five times the minimum wage ($2,250).

Both parties said that the Prime Minister pledged to get the account up and running in the next four months. However, the current law will remain in effect until that time.

Zoughaib said: “The Treasury will benefit from collecting more taxes from tenants and owners, in terms of built-property tax, municipal tax, and income tax.” According to him, tenants have cost the Treasury $4.6 million yearly because the value of taxes on old rents is much lower.

There is no consensus between stakeholders on statistics for the number of rented properties, nor on the proportion of properties governed by the pre- and post-1992 law. Owners and tenants have each come up with their own estimations.

According to Zakhour, there are between 180,000 and 200,000 families living in old-rent households. He said: “Of those, 100,000 families need the account’s assistance. But we believe the number is underestimated.”

The other estimation is by the Syndicate of Owners of Rented Properties, which bases its figures on a study conducted by the Ministry of Social Affairs. The study showed that pre-1992 tenants total 80,000.

Reported by Yassmine Alieh

Source:

http://www.businessnews.com.lb/cms/Story/StoryDetails.aspx?ItemID=5887

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