San­dra Chouthi

Rent con­trol by the State is not a so­lu­tion to the prob­lems be­ing ex­pe­ri­enced by ten­ants and land­lords, said Mark Edghill, a di­rec­tor of the As­so­ci­a­tion of Re­al Es­tate Agents (AREA). "Rent con­trol is re­spon­si­ble for some of the sub-stan­dard oc­cu­pied prop­er­ties. His­to­ry has shown that rent con­trol is not a so­lu­tion, as the neg­a­tive ef­fects far out­weigh the virtues." Edghill said this at last week Wednes­day's pub­lic con­sul­ta­tion on rent at City Hall, Port-of-Spain. "Most econ­o­mists be­lieve that a ceil­ing on rents re­duces the qual­i­ty and quan­ti­ty of hous­ing avail­able. This view is based on analy­sis of em­pir­i­cal ev­i­dence as well as the un­der­stand­ing gen­er­at­ed by the­o­ret­i­cal mod­els.

"Econ­o­mists from dif­fer­ing sides of the po­lit­i­cal spec­trum, such as Paul Krug­man and Thomas Sow­ell, have crit­i­cised rent reg­u­la­tion as poor eco­nom­ics which, de­spite its good in­ten­tions, leads to the cre­ation of less con­struc­tion and avail­able hous­ing, and in­creas­es ur­ban blight," he said. Speak­ing to a hall-full of ten­ants and land­lords, Edghill said, "A sur­vey of ar­ti­cles on Econ­Lit re­gard­ing rent con­trol finds that econ­o­mists con­sis­tent­ly and pre­dom­i­nant­ly agree that rent con­trol does more harm than good. "The sur­vey en­com­pass­es par­tic­u­lar is­sues, such as hous­ing avail­abil­i­ty, main­te­nance and hous­ing qual­i­ty, rental rates, po­lit­i­cal and ad­min­is­tra­tive costs, and re­dis­tri­b­u­tion." He said rent con­trol may ex­ac­er­bate the prob­lems for ten­ants, whose land­lords may not be able to main­tain their prop­er­ties on a fixed rental in­come, which does not keep abreast of ris­ing costs and in­fla­tion.

Min­i­mum stan­dards

Edghill said AREA has guide­lines for min­i­mum stan­dards for rental prop­er­ties. For in­stance, min­i­mum bed­room di­men­sions such as 10'x10', at least one win­dow in each bed­room of a min­i­mum size, at least one full bath­room with toi­let, show­er and face basin, etc. Terms and con­di­tions of rent­ing must be bal­anced for both land­lord and ten­ant. In­creas­es in wa­ter rates, tax­es, in­sur­ance and main­te­nance costs are be­ing un­fair­ly bur­dened on land­lords where rents are fixed or con­trolled. AREA said there must be a mech­a­nism to al­low for in­cre­men­tal in­creas­es to such rents in or­der to bal­ance the scale for the land­lord.

AREA rec­om­mends:

The re­al es­tate body is propos­ing that a non-gov­ern­ment ap­peal board be set up, us­ing the of­fices of an or­gan­i­sa­tion like AREA, which serves the in­ter­ests of both land­lord and ten­ant. "In this way, a land­lord or ten­ant will be free to present their ar­eas of con­cern, which will be re­viewed by an in­de­pen­dent pan­el, and a de­ci­sion giv­en to the land­lord or ten­ant in a rea­son­able time­frame."

Edghill laid out prob­lems ten­ants en­counter:

• Neg­li­gence of the land­lord in keep­ing the struc­tures, walls and floors in good re­pair and con­di­tion

• Neg­li­gence of the land­lord to at­tend to re­pairs/com­plaints

• In­ter­fer­ence by the land­lord

Ten­ants' re­spon­si­bil­i­ties:

• Pay rent in full by the agreed date.

• Keep the prop­er­ty in good and ten­antable re­pair-chang­ing of light bulbs, tap wash­ers, main­tain­ing free flow of waste pipes, faucets, etc.

• Not to sub­let premis­es with­out per­mis­sion.

• Not to make any al­ter­ations to the premis­es (re­move any par­ti­tions, doors, cup­boards or oth­er fix­tures) ex­cept with the per­mis­sion of the land­lord, first ob­tained in writ­ing).

• The prop­er­ty is to be used for its in­tend­ed pur­pose on­ly (ie as a res­i­den­tial unit or as a busi­ness unit)

• Pay for all ap­plic­a­ble util­i­ties such as elec­tric­i­ty, ca­ble, tele­phone and In­ter­net, etc, un­less oth­er­wise agreed.

• Se­cu­ri­ty de­posit paid by the ten­ant is to off­set any ex­pen­di­ture in­curred as a re­sult of any breach­es of the claus­es of the lease agree­ment by the ten­ant and is not to be used as the "last month's rent."

Prob­lems land­lords face:

• Ten­ants not ful­ly un­der­stand­ing the terms and con­di­tions of the agree­ment they are sign­ing.

• Break­ing the lease be­fore the term is ex­pired and not pay­ing the un­ex­pired resid­ual rent.

• Costs to the land­lord in terms of mon­ey and time in try­ing to take a ten­ant to court for non pay­ment of rent or non-per­for­mance of the ten­ant's oblig­a­tions.

• Rent re­stric­tions.

• The law is heav­i­ly weight­ed in favour of the ten­ant.

Land­lords' oblig­a­tions:

• Pay all ex­ist­ing and fu­ture rates and tax­es

• Keep the main struc­ture, ex­ter­nal walls and floors in good re­pair and con­di­tion

• Pay the build­ing in­sur­ance for the prop­er­ty

• Al­low the ten­ant who is ob­serv­ing the claus­es of the lease to qui­et­ly en­joy the prop­er­ty rent­ed