The Landlord and Tenant Bill 2021 was read for the first time on Wednesday 29th September 2O21 and referred to the Parliamentary Committee on Physical Infrastructure for consideration.

It is against this background that the government introduced the Landlord Tenant Bill, 2O21 with the following objectives:

a)  to regulate the relationship between the landlord and tenant;

b)  to reform and consolidate the law relating to the letting of premises;

c)  to provide for the responsibilities of landlords and tenants in relation to the letting of premises; and

d)  to provide for related matters. 

A similar Bill entitled “The Landlord and Tenant Bill, 2018” had been presented to the l0th Parliament. It was considered and passed by that Parliament with some amendments and with confirmation that it complied with Human Rights, the Sustainable Development Goals, and it addressed the gaps in the existing law.

In accordance with Article 91 of the Constitution of the Republic of Uganda the Landlord and Tenant Bill, 2018 as passed by Parliament was sent to the President for Assent on 5th May 2019. However, the President in his letter dated 27th October 2020 to the Rt. Hon. Speaker returned the Bill to Parliament requesting for reconsideration in a number of issues such as business premises, definition, among others.

Significant Highlights of the Act

1.  A tenancy agreement can be oral, written, in the form of a data message or implied by conduct. Where the consideration is more than 500,000 Uganda Shillings, it should be in writing or data message to be enforceable.

2.  Before executing a tenancy agreement, landlords should obtain a valid identification card from the tenant for purposes of identifying a legal person and improve data storage.

3.  Rent denominations should be in Uganda shillings unless there is a contrary agreement. This maintains the value of the Ugandan currency.

4.  The Act restricts payment of more than three (3) months in rent in advance for one month unless the tenant opts to do so in writing.

5.  Landlords are prohibited from increasing rent at a rate of more than 10% annually.

6.  Landlords are required to give notice of 60 days in case of a rent increment.

7.  Under fixed-term tenancies, rent stays the same until the term is finished unless there’s a contrary agreement.

8.  The Landlord is permitted to charge a security deposit that doesn’t exceed one month’s rent.

9.  Taxes are to be paid by the Landlord.

10.  Distress for rent is abolished, and instead, the Landlord is encouraged to apply to the court to recover unpaid rent and reasonable costs.

11.  There’s a restriction to the right of entry of premises which requires the Landlord to give a 20 hours’ notice before visiting the premises.

Key Issues and Analysis

Parliament overwhelmingly decided that the currency of transaction between Landlord and tenant shall be the Uganda Shilling. The justification given is to protect the Uganda Shilling that has continuously depreciated against the dollar. While a case can be made for consumer protection, there is a limit on how far the law can intervene in a market place.

The Act protects the tenants in so many ways;

a)  Tenants can sublet the property to other tenants but with the knowledge of the Landlord.

b)  Tenants need to be informed before a visit from the Landlord and being protected from arbitrary rent increments.

c)  Tenants should be given six months’ notice of termination of the tenancy by a landlord who wants to do something else with the rented property.

However, the Act does not provide an equal measure of protection to the landlords as shown below;

a)  The new Landlord will inherit the security deposit if the premise is sold out.

b)  Landlord to secure a court order to evict a tenant who refuses to vacate a rented property after a notice of vacation expires. But this provision does not keep in mind the extra costs a landlord will have to incur to recover defaulted rent, and by the time a tenant fails to pay rent they probably will not be able to pay court costs.

c)  Tenant shall only reimburse the Landlord’s costs for payment for anything he or she is liable to pay only with an issuance of a request with a receipt attached.

d)  There’s a gap left by retaining both the oral and implied agreements, yet there’s no proof to enforce them.e)  There’s no custodial sentence for a tenant who contravenes the Act.

ISSUES THAT EMERGED FROM STAKEHOLDERS AS THE COMMITTEE OF PARLIAMENT INTERACTED WITH STAKEHOLDERS: These must guide our questions and discussion.

a)  Electricity: The Committee received concerns from the Tenants of Kampala Arcades in regard to exorbitant Electricity Bills from landlords; and that in some premises where meters have been installed, the landlords continue to interfere with the tenant’s peace in this area.

b)  Parking Space In regard to parking fees charged to the tenants of Kampala Arcades, they have to pay UGX. 20,000 per day even in arcades that are built with parking space. In their opinion the extra expense is exorbitant and unfair; Moreso in the arcades that are built with parking space.

c)  Toilet Facilities

Some stakeholders informed the Committee that tenants in some arcades in Kampala are required to pay for the use of toilets on top of paying rent. This is seen as unfair. Worse still, landlords in some arcades have transformed the toilet areas into shops so the tenants of those arcades have to look for toilets from other neighbouring areas. This too is unfair and very inconveniencing to the tenants.d)  Payment of “good will” by tenants to landlords The Committee received complaints from KAAFO and KACITA about “good will” charged by the landlords to tenants seeking to occupy new/alternative premises in commercial buildings. The “good will” payment is not part of rent dues and is not receipted.

Definition of “good-will”

Definition of the word “good-will” after the definition of the word “currency point” as follows; “good-will” means the pre-contractual one-off payment made between a landlord and a prospective tenant or between an existing tenant and prospective tenant, in respect of the assumed competitive value of a particular portion or the whole of a business premises lo be let out;”

e)  Receipting of Rent Payments Tenants complained about non issuance of receipts upon payment of rent. Instances have arisen where landlords only issue a piece of paper indicating “cleared” for tenants who have paid their rent dues. In other instances, the amount indicated on the receipt issued to the tenant is just a small fraction of what has been paid to the landlord by the tenant.

f)   Tenancy Agreements the Bill provides a rigid format for tenancy agreements that are made in writing. The format may not accommodate all issues that the parties to a tenancy agreement would like to mutually include in their contract.

g)  Circumstances under which the tenant may repair premises. The Bill allows a tenant to carry out repairs where he/she has taken reasonable steps to arrange for the landlord to carry out repairs but is unable to get the landlord to carry out the repairs. It further provides that the tenant immediately after carrying out the repairs gives the landlord written notice of repairs done and the cost implications for reimbursement within fourteen days.

h)  Termination after notice. The Committee was concerned that when a notice of termination of contract is issued by the landlord to the tenant, sometimes the tenant interprets the notice as end of contract although they continue to occupy the premises until the period of the notice has elapsed; during which period they do not pay rent.

i)   Unlawful eviction of tenant The Bill provides for criminal sanctions against a landlord who unlawfully evicts a tenant. You can listen to this space on landlord and tenant act 2022 below:

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