The initial reaction of tenants is that the legislation is loaded in favour of landlords

Parliament: Despite a few members of parliament (MPs) disagreeing on some sections, a joint sitting of the Parliament endorsed the Tenancy Bill, 2014 yesterday.

Of the 66 members present, 60 voted in favour of the bill, while two voted ‘No’.  Four members abstained from voting.

Although some house owners are in favour of the endorsed bill, tenants feel that they are either way on the losing end.

A tenant in Changzamtok, Sonam Dorji, said that it was always the house owners who raised rents inappropriately but the law wasn’t clear on this.  The provision that mentions about payment of compensation if owner fails to refund security deposit, he said, is rare.

“It’ll be difficult for private employees to pay monthly rent on time, because we often receive salaries late,” Sonam Dorji said. “Penalties over that are too much.”

Another tenant in Changangkha, Dechen Dolkar, 36, pointed out that another provision of the bill was something that never happened in reality and was more or less in favour of the owner.

She was referring to schedule II (5) of the bill, which states that the tenant shall tender the rent payable every month to the owner within a period specified in the tenancy agreement, failing which the owner shall charge and the tenant shall pay an interest at 24 percent per annum on the amount of rent payable for every day of default.

“Without any options, we (tenants) have to agree on the rent fixed by the owner,” she said. “I’m afraid if the Act will be of any help, while owners will continue to exploit tenants.”

According to section 9.1.3 of the bill, if the tenant fails to pay the rent on time, he/she shall pay the amount with interest at the rate of 24 percent per annum on the amount due.

Disagreeing with the section, Dagana’s council member, Sonam Dorji, said, since most tenants were from low-income group, levying 24 percent penalty was unfair.  He also sought clarification on what basis was the penalty decided at 24 percent.

The National Assembly had passed the bill last year with an interest rate for late payment of rent and due amount of 15 percent per annum.  But the council raised it to 24 percent.

“The main purpose of the tenancy bill is to look at the welfare of tenants but, going by the penalty levied on them, it seems to favour the house owners more,” Chumey-Ura MP Tshewang Jurmi said.

Speaker Jigme Zangpo, however, said that the bill favoured both tenant and owner equally.

Section 25 of the bill states that the owner, who fails to refund the security deposit, shall pay the security amount and compensation at the rate of 24 percent per annum on the security deposit payable to the tenant.

Moreover, a new section in the bill penalises the owner with a fine equivalent to a month’s rent if the tenant is unlawfully evicted.  The person evicted shall have the right to be reinstated in the rental unit or the leased land, along with compensation equivalent to two months rent.

Wamrong MP Karma Tenzin said the bill was discussed and deliberated thoroughly before putting it to the joint sitting.

“More than 90 percent of the buildings are constructed on loan,” he said. “The 24 percent interest rate was keeping in mind the bank’s interest rates,” he said.

Meanwhile, the ministry of works and human settlement will designate a department or agency under it as the tenancy authority.  The authority will have a dispute settlement committee.

By Nirmala Pokhrel