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New bill submitted for organising housing rentals

A bill comprising 11 articles for organizing the house rental sector by fixing rents of residential units based on location, and penalizing owners who increase home rents illegally, has been submitted by MP Faisal Al-Duwaisan in Kuwait.

Article 1 of the bill stipulates that the law is applicable to non-furnished homes allocated to individuals for accommodation purpose in commercial, investment and residential areas. However, the law is not applicable to homes that are rented out by state, embassies, international organizations or commercial companies for their employees.

Article 2 states that owner of the building shall determine the rental value approved by the Municipal Council and authenticated by the Ministry of Commerce. In any case, to rectify rents of housing units, the house owner will have to present the license of lease approval of existing rental contract. However, the owners can set a lower rental value for their units than that set by Municipality, irrespective of whether the contracts were signed before after application of the law. 

Article 3 of the bill says that before or after implementation of the law, if the tenant observes that the rent set by property owner does not comply with conditions specified in the law, he/she can revise with terms based on contract.

Article 4 stipulates that rental cost of housing units will be evaluated based on total area of housing unit in square metres based on following classification:
KD2 per sqm for home in Capital Governorate (except those beyond Shuwaikh area), KD1.5 per sqm for homes within Hawally, KD1.25 per sqm for homes in Farwaniya Governorate, Mubarak Al-Kabeer Governorate, and West of Capital Governorate beyond Shuwaikh area and KD1.2 per sqm for homes in Jahra and Ahmadi Governorates.

Article 5 of the bill stipulates deduction of 20 percent of basic rental value of old homes that were built 30 years ago.

Article 6 of the bill said that rentals of new buildings constructed within last three years should be added by 35 percent of its basic rental value.
Article 7 suggests addition of 20 percent of basic rental value to rents of housing units located on seafront within 500m radius.

Article 8 states adding 10 percent of basic value to rentals of homes that directly overlook the main public roads that divide one another.

In case of violation of law by increasing value, a fine of not less than Dh.5000 will be imposed on him for every violating contract.

Article 9 states that if the renter violates the law by increasing rental value from that stipulated in the law, a fine of not less than KD5000 will be imposed on him for each violating contract.

The owner will also have to reimburse to the tenant the difference in rental values irrespective of whether or not they comply with procedures specified in Article 2 of the Law. But, if he deliberately rents the premises violating Article 2 of the law, he will be fined KD100.

Article 10 of the contract states that the Minister of Commerce and Industry has the right to amend the law to increase basic rental values of any housing unit by 20 to 50 percent, after five years of enforcement of the law.

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