Rental service network to curb tenants' exploitation
JEDDAH, Jan 27, 2013 (Arab News - McClatchy-Tribune Information Services via COMTEX) --
In an effort to regulate the house-renting sector in the Kingdom, the Ministry of Housing plans to launch a network for online rental services later this year.
The system will enable the ministry to monitor the rental market and interfere when tenants are exploited or unfairly treated. In addition, it will enable tenants to pay their rents online, an official of the ministry said.
"The network will have a credit registry system to ensure tenants pay their rent on time. This in turn will also facilitate for tenants the procedure of paying rents by providing them with the option of online disbursement," said Muhammad Al-Zamie the general supervisor for planning and studies agency at the ministry in a statement.
Al-Zamie also indicated that the government would interfere only in the event of landlords exploiting citizens or violating tenants' rights.
"The ministry will strive to monitor the rising rent rates by regulating the rental market, ensuring transparency in tariffs and monitoring the market to interfere if the situation demands. We will also be constructing thousands of residential units to meet citizens' demands," Al-Zamie said.
He said the network will offer a comprehensive solution to the problems in the rental sector by regulating the interactions between tenants, landlords and property agents. He added that the ministry is currently working in collaboration with the Ministry of Commerce and Industry on establishing the guidelines that will govern the work of real estate agents.
According to official statistics, there are more than one million Saudi families living in rented houses, accounting for 34 percent of all Saudi families, he said.
However, he added that the Saudi market is operating on the principles of free trade in which market forces determine the rates.
"The ministry will not set a ceiling price for rents, except in unavoidable situations when landlords unfairly exploit citizens," he said.
He added that the ministry would not be able to monitor rent rates until the implementation of the network because it will provide the officials concerned with the precise details of tariffs.
Referring to the attempts of other countries to stabilize rental rates, he revealed that most of these efforts had failed. "In Egypt, for instance, government intervention led to investors stopping construction projects of rental houses and prompted landlords to neglect the maintenance of their properties," he said.
Elaborating further, Al-Zamie said the online network would focus on two aspects. One is the regulatory aspect that would clearly define the rights and obligations of the three parties involved in the rental business. As such, it will help protect the rights of each of the parties, guarantee market transparency and encourage investors to construct more buildings and thus create a conducive atmosphere for lower rental rates.
Secondly, the network will show the rental houses available in the country. It will also have a database and information center on rent rates, landlords, agents and the rent payment records of tenants.
The transparency provided by the network will impede agents or landlords from tampering with the rates and enable the ministry to monitor the rates and intervene if the situation demands.
Moreover, the online payment system will provide tenants with various payment options, such as monthly, quarterly or half yearly.
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