Wednesday, June 28, 2006

The recent news that the Landlord and Tenant law may not be as pro-tenant as some would have liked maybe good news for the property investment sector but it could be bad news for the rest of the economy.

As noted in last Friday's edition of Cayman Net News, in both the editorial and the news pages, between the rollover policy and the cost of living too many people are leaving this country.

One of the many high costs here is accommodation - and although the Economics and Statistics Office has pointed out that rental rates are beginning to decline, the incredible rise in the cost of accommodation in the wake of Hurricane Ivan in September 2004 means that in many cases rents are still far too high for most regular workers to afford.

Moreover,  as there has never been regulation within the rental market, landlords are used to getting their own way, which means charging whatever they can get for their properties and then not necessarily meeting their obligations to their tenants when it comes to repairs and renovation.

Although the matter of preventing price gouging and maintaining realistic rental rates, should form a key element in any landlord and tenant law, it should not be the only protection that is offered.

It is important that we do not witness the rather selfish behaviour of some landlords post-Ivan again.

It must now be against the law for a landlord to throw out a tenant with no good cause before the lease is up, in order to give the property to another tenant offering more money, a practice that was rather too widespread n the months after Hurricane Ivan tore Grand Cayman apart.

While some landlords did everything they could to help their tenants whose homes had been destroyed, there was a significant number who saw it as an opportunity to make money.

The law should prevent such practices and the law should also be about obligation and responsibility on both sides - establishing rental agreements that protect both parties.

Tenants who pay rent on time should expect their landlords to also complete repairs in a timely manner. A complaint that just about every person who has ever had to rent a property is familiar with.

Regulation should be about preventing the worst excesses and exploitation on both sides of the fence.

A landlord should not be able to hike rents and evict tenants at will nor should tenants be allowed to destroy property or evade and delay paying rent.

Clearly too much regulation would impact on a lucrative arm of our economy. Property development and the investment from overseas as well as locally, is very important to the country and we must ensure that property investors are not deterred by too many rules.

However, if we do not have a fair and well managed local rental market then people will not have settled homes, causing further disruption to a workforce that already faces many challenges.

If workers cannot find homes, businesses will not find workers creating further problems for other elements of our economy.

The dilemma is striking the right balance and the law makers must ensure that both parties are protected in rental agreements.

In the end, demand will dictate rental rates in a free-market, but the free market cannot protect tenants from unscrupulous landlords nor indeed can a landlord expect the market to make errant tenants pay rent on time.

Like it or not this country needs fair and sensible landlord and tenant legislation to ensure that everyone is protected by the law and can when necessary, seek redress through the courts.

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