New Uganda Tenancy Bill Restricts Payments to Local Currency Only

Tenants To pay In Uganda shillings

Uganda government in February 2019 tabled the Landlord Tenant Bill to repeals the Distress for Rent Act 1938 and the Rent Restriction Act 1949; which they found obsolete. On Wednesday, the Bill was passed into law, and the  legislation is also expected to create a mechanism for the proper functioning of the rental market for both residential and commercial premises

Initially, there was no comprehensive law regulating the relationship between landlord and tenant, which often resulted in a lack of proper regulation of the landlord-tenant relationship and bore disharmony among the key players. The Landlord-Tenant Bill 2018, clearly stipulates the responsibilities of each party, ensuring that they stay clear of the other.

Under this Bill, all payments of rent must be transacted in the local currency, as several traders in Kampala who had been paying their monthly rent in United States Dollars for a while. However, some members of parliament insisted that the government should uphold a clause in the Uganda constitution maintained to cater for the landlords who mortgage their properties in banks to get loans in foreign currency

“Let us leave a window for the landlords who will have mortgaged their properties in banks to get loans in dollars. They need to pay back in the same currency,” argued Mr Gabriel Ajedra, the State Minister of Finance in Charge of General Duties.

He insisted that foreign missions in Uganda need to be considered because their governments send them money for rent in their national currencies which would be a problem for them if only transactions will be made in Uganda shillings.

But his reasoning was dismissed by the majority saying that the government must not legislate to weaken the Uganda shilling when traders from whom landlords would demand rent in foreign currency, have had to exchange their local currency with other currencies to buy goods abroad.

“If the landlords so wishes to have dollars let them move to the forex bureaus and buy dollars or Euros. Any legislation to have transactions in other currencies is a vote of no confidence in our currency,” an MP contended.

Landlords will also have to install prepaid electricity metres for all tenants to avoid extortion through hefty demands for payment of bills which they have not seen.

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