Landlords at risk with proposed law on rent

The proposed amendments to the Act governing the renting of houses and buildings will create many problems, especially for landlords.

Since almost all matters must be resolved through the courts, this will become a major source of income for lawyers while creating unnecessary expenses for landlords.

Many landlords have built their houses by obtaining loans and through years of hard work, both in Sri Lanka and overseas. This law places risk and financial burden on them.

This Act will create significant conflict between tenants and landlords, as tenants are given excessive protection. If a landlord becomes strong, there is a risk that they may act aggressively, as the Act provides little protection for landlords. On the other hand, if a tenant is strong, they may harass the landlord, refuse to pay rent, pay only what they wish, or even attempt to unlawfully occupy or acquire the property.

There will be severe congestion in the courts. In the future, the government may even be forced to establish separate courts solely to handle disputes arising from this new law.

Many people rent out houses as their main source of income. Under this new law, landlords may be required to pay water and electricity bills even when tenants fail to pay rent. In such situations, landlords will be pushed into severe financial hardships.

It is not clear how this Act will apply to houses given on lease through registered lease agreements. If the same rules are applied to leased properties, it would discourage leasing altogether. As a result, the government would suffer a significant loss of revenue from stamp duty.

In many two-storey houses, elderly parents live on one floor while the upper floor is rented out to generate income. If this Act is approved, these elderly parents will lose their peace and their only source of income. 

They may also be forced to bear additional financial burdens such as water and electricity bills. Moreover, elderly people may find it extremely difficult to visit police stations or courts, wasting valuable time and causing unnecessary physical and mental stress.

Another serious danger is that if a landlord becomes aware that a tenant is misbehaving or using the house for illegal activities such as drug dealing, the landlord may still be unable to remove the tenant even after giving proper notice. In such cases, tenants may misuse provisions of the Act in their favour, creating serious risks to the landlord, neighbouring residents, and society as a whole.

Under the proposed law, the provisions will apply to any occupation for a period exceeding three months. During this short period, everyone will act like saints.

Berty Leelaratne