Tenants against the wall as Covid-19 bites

As the coronavirus pandemic continues to ravage the nation with devastating economic results, low and middle-income tenants have found themselves at the landlord’s guillotine.

They are now at the mercy of property owners and even various tenant lobbies do not appear enthusiastic to defend them.

Investment company Cytonn has since warned that rental yields will suffer for the period that Covid-19 persists and stakeholders were better off evaluating the damage to be incurred and start laying a recovery strategy.

“Many tenants will not meet their rental obligation for the period the scourge persists. New developments will stall and the future of real estate will be challenged," said the firm's Wahu Waceke during an interview with a local TV station.

"This is the time to inculcate goodwill among stakeholders, understanding and compassion. Broadly, we are in this as a nation, not as individuals.” 

She, however, said the decision to waive rent or allow arrears to accumulate for the period of the crisis “is not a legal provision but personal discretion of the landlord”.

Urban Tenants Association of Kenya (Utak) Secretary General Ephraim Murigo says there is no other honest advice to give to the tenants other than to “kindly pay your rental bills”.

He told Home & Away that there is no way one can "compel a tenant not to pay rent as per the existing contractual agreements between them and their landlords”.

"Unless in your rental agreements there is a clause that states expressly that in times of national tragedies your rental obligation shall remain suspended, the painful reality is that in the absence of such clause, the tenant will be at the mercy of the landlords,” he said.

"There are considerate landlords who have taken it upon themselves to exercise acts of mercy to their tenants in the face of this pandemic by way of reducing or suspending rents.”

Mr Murigo said it is upon individual tenants to audit themselves financially and adjust as per the available resources.

“If you were, for example, paying a monthly rent of Sh5,000 and the coronavirus scourge has reduced that figure, it was better that you relocated to rental zones commensurate with what you can afford to pay,” he said.

"If you defy the reality, then you will only have yourself to blame in the event that you find your children kicked out of your rental space.”

This advice has not been taken lightly by some tenants, with Mercy Mwende from Mukuru kwa Reuben slums in Nairobi dismissing it as “stinky.”

She says she was selling fruits at Park Road in Nairobi but she has now been rendered jobless after the government ordered her to suspend business.

“This suspension of business is for the period that this coronavirus will be around our social and economic lives, we do not know up to when. I pay a monthly rent of Sh800 and other household budget. I have to raise Sh5,000 per month to survive,” she told Home & Away.

“I cannot raise Sh800 for my rent. Murigo is advising me to relocate to what free abode commensurate with my current financial status?”

Agnes Nyambura, a mother of two and a barmaid in Murang’a town whose services have been rendered suspended by the pandemic, is in her second month without a job.

"I don't even know when we will resume our jobs. We are not asking for free accommodation…all we are asking for are lenient terms of paying our landlords,” she says.

Ms Nyambura says she only wants her landlord to understand that it is hectic enough putting a meal on the table.

“In that reality, I just want my landlord to know that I know I’m indebted to pay rent. It is my obligation to pay. But I should be given time to manoeuvre through the issue," she says. 

"When the viral disease will be defeated, the landlord will know. When I resume my job, the landlord will know and just like the way I was dutiful all along in paying rent, I will resume paying.” 

Interior Principal Secretary Karanja Kibicho says while it is at the landlords' discretion to decide terms of engagement with their tenants, what will not be tolerated will be disregard for the rule of law.

“We have the laws guiding such engagements…We have the set procedure for pressing for rental yields. We also have the procedures that guide evictions for non-payments," he said.

"No landlord will be allowed to act outside the law in this crisis, the same way no tenant will be allowed to act outside the law."

The PS said the government will only act as a fair arbitrator in all disputes that will ensue, adding that “fair play is a key component in arbitrations where all circumstances will be laid bare”.

Council of Governors (CoG) Deputy Chairman Mwangi wa Iria says the plight of tenants has been categorised by the counties as a common issue of concern.

“We cannot push landlords to forfeit their incomes through giving out free accommodation but we can reason with them to understand that currently these are not ordinary times. We are going through a crisis as a nation and tenants should not bear the brunt of it,” he told Home & Away.

He said tenancy in urban centres is well defined and more interest should be concentrated on the low income earners who have rented in informal settlements.

“These tenants are not only cash-strapped but are also hungry and scared of this Covid-19 threat. While we will ensure that they get food rations and protect them to the best of our abilities against the scourge, the landlord should play the humane face and relax on rental demand,” said wa Iria. 

“We as CoG have resolved to work with low-income residential landlords to see what we can waive for them so that they too can feel encouraged to go easy on rental demands,” he said.

According to National Treasury Cabinet Secretary Ukur Yatani, the government has no intention to dictate pricing in the private sector, and its duty will be limited to facilitating availability of more disposable incomes to cushion consumers against inflation.

He said slashing of value-added tax (VAT) from 16 to 14 per cent as well as removal of income tax for those earning Sh24,000 and reductions for other income groups are measures intended to increase purchasing power of the beneficiaries.

“The best we can do is to make a passionate appeal to our landlords to exercise empathy with Kenyans at the lower cadre who have found the Covid-19 pandemic suspending their incomes,” the CS said.

He ruled out a direct call or even pushing for legislation for landlords to reduce or suspend rent, arguing that it would be a direct affront to the sector that is currently grappling with a myriad of challenges.

Former Maragua MP and economist Elias Mbau, however, argues that Yatani's approach was elitist.

“He only factored in cushioning disposable incomes for the employed. The essence of government’s intervention was to fix the suffering of those at the bottom of our economy…the donkeys of our economies who toil to get something to budget for hand to mouth expenses," he said.

"Those with no savings hence cannot invest for higher incomes so that they can break their vicious cycle of poverty.” 

Mr Mbau says the dwindling of incomes to families will soon stretch the resilience of Kenyans beyond limits, with the situation made worse by the fact that no one is able to predict how long the pandemic is going to last and how the government will manage it.

“The tax interventions only catered for a period to May but the effects of the coronavirus are expected to persist beyond that, hence the National Treasury is not offering any serious solution to the crisis,” he said.

He added that though inflation has remained within Central Bank of Kenya's target of between 2.5 and 7.5 per cent, there are expectations of coronavirus-induced inflationary pressure.

“The CS’s interventions will not help many low income earners survive since the economy will for the period of this scourge suffer supply shortages owing to lockdowns across the globe further heightening inflation. This does not in any way get mitigated by reducing VAT and PAYE since our low income earners have lost livelihoods,” he said.

Mbau believes the government should map out tenants in low-income estates and either give them direct stipends or landlords to register and get their rental dues from the government on behalf of tenants.

Gerald Odhiambo of Bunge la Mwananchi termed the government’s approach to the plight of tenants “timid and noncommittal”.

He cited the case of New York and California states in America that have temporarily banned eviction of tenants, with landlords being encouraged to revise payments plans.

He told Home & Away that what the government should have done was push for a reduction of rent through direct interventions “like waiving landlords' power and water bills as well as suspension of land rates”.

Odhiambo says the government has abandoned the vulnerable tenant to joblessness, hunger and lack of shelter.

“This is wrong. It is complicity to dehumanise the vulnerable tenants and the government as the duty bearer has to be held directly responsible for all cases of landlords’ thuggery against tenants, especially now that some of them are removing roofing, windows and doors from the houses of defaulting tenants,” he said.

He said some landlords have taken undue advantage of the pandemic to kick tenants out of their houses “so that they can proceed to introduce higher rental rates to new tenants once the scourge is defeated”.  

homeandaway@standardmedia.co.ke