Rent defaulters rise as landlord patience wears thin

 

The number of Kenyan households unable to pay rent in May rose seven per cent, with a majority of landlords refusing to offer reliefs, a government survey shows.

May saw 61 per cent of Kenyan households report fallen earnings as the economic impacts of the pandemic continue to bite, says the Survey on Socio-Economic Impact of Covid-19 on Households Report released yesterday.

The survey shows that only 0.7 per cent of households in rented dwellings had received waiver or relief from landlords on rent for May, while only six per cent had received a partial waiver.

This is a drastic fall from the 8.7 per cent proportion of households that reported receiving any waiver or relief from landlords on rent for the month of April.

“Respondents who reported that they were unable or would not be able to pay or not fully paid the rent for May were asked to give their main reason. Most of the households that were unable to pay rent for May attributed it to reduced income/earning (61 per cent),” says the survey.

The report shows that 31.6 per cent of households paid rent on time for May, while 37 per cent were unable or would not be able to pay.

The inability to pay rent was a rise compared to April, where 30.5 per cent of households reported inability to pay rent on the agreed date with the landlord

The report showed that about a third of Kenyan households that paid rent on the agreed date had been unable to.

Layoffs

This was a rise of 9.4 per cent compared to 2.15 per cent of Kenyan households unable to pay rent on the agreed date in April.

“Almost a third of the households, 30.9 per cent, who usually paid rent on the agreed date with the landlords before the pandemic were unable to pay on time for the month of May,” said the survey.

The main reasons for inability to pay rent included temporary layoff or closure of business (25.7 per cent), delayed income or earnings (8.1 per cent) and permanent layoff or closure of business (3.5 per cent) among others.

The report further shows 48 per cent worked lesser hours.

Adding that the number of people absent from work owing to Covid-19 related issues stood at 61.9 per cent with the rest locked out because of business closures and economic reasons.

A huge chunk of those absent from work -- 77.8 per cent -- reported that they were not sure when they would return to work.

Landlords, majority of whom are servicing development loans, recently said they now want evidence including documents that tenants have indeed lost their income if they are to allow them to continue staying in their premises.

Landlords argue that some tenants are using the Covid-19 pandemic as an excuse to delay rent payments – especially for residential houses – yet have steady paychecks.

When the reality of the pandemic started hitting home in March, some landlords issued rental reliefs for about three months which are now coming to a close. 

This is the second household report prepared by the Kenya National Bureau of Statistics (KNBS) to gauge Covid-19 impact.