To regulate the relationship between landlords and tenants, to reform and consolidate the law relating to letting of premises, to provide for the responsibilities of landlords and tenants in respect to the letting of premises and related matters.
Significant Highlights of the Act
- A tenancy agreement can be oral, written, in the form of a data message or implied by conduct. Where the consideration is more than 500,000 Uganda Shillings, it should be in writing or data message to be enforceable.
- Before executing a tenancy agreement, landlords should obtain a valid identification card from the tenant for purposes of identifying a legal person and improve data storage.
- Rent denominations should be in Uganda shillings unless there is a contrary agreement. This maintains the value of the Ugandan currency.
- The Act restricts payment of more than three (3) months in rent in advance for one month unless the tenant opts to do so in writing.
- Landlords are prohibited from increasing rent at a rate of more than 10% annually.
- Landlords are required to give notice of 90 days in case of a rent increment.
- Under fixed-term tenancies, rent stays the same until the term is finished unless there’s a contrary agreement.
- The Landlord is permitted to charge a security deposit that doesn’t exceed one month’s rent.
- Taxes are to be paid by the Landlord.
- Distress for rent is abolished, and instead, the Landlord is encouraged to apply to the court to recover unpaid rent and reasonable costs.
- There’s a restriction to the right of entry of premises which requires the Landlord to give a 20 hours notice before visiting the premises.
Key Issues and Analysis
Parliament overwhelmingly decided that the currency of transaction between Landlord and tenant shall be the Uganda Shilling. The justification given is to protect the Uganda Shilling that has continuously depreciated against the dollar. While a case can be made for consumer protection, there is a limit on how far the law can intervene in a market place.
The Act protects the tenants in so many ways;
- Tenants can sub-let the property to other tenants but with the knowledge of the Landlord.
- Tenants need to be informed before a visit from the Landlord and being protected from arbitrary rent increment.
- Tenants should be given six months’ notice of termination of the tenancy by a landlord who wants to do something else with the rented property.
However, the Act does not provide an equal measure of protection to the landlords as shown below;
- The new Landlord will inherit the security deposit if the premise is sold out.
- The is to Landlord to secure a court order to evict a tenant who refuses to vacate a rented property after a notice of vacation expires. But this provision does not keep in mind the extra costs a landlord will have to incur to recover defaulted rent, and by the time a tenant fails to pay rent they probably will not be able to pay court costs.
- Tenant shall only reimburse the Landlord’s costs for payment for anything he or she is liable to pay only with an issuance of a request with a receipt attached.
- There’s a gap left by retaining both the oral and implied agreements, yet there’s no proof to enforce them.
- There’s no custodial sentence for a tenant who contravenes the Act.
The Act interferes with freedom of contract between parties and in many places owing to the loosely worded provisions; the intentions of the Act will come to nought in the face of market forces. The Act also protects the tenants more than it protects the landlords, yet it should provide adequate protection of each party’s rights.