Regulating the rental relationship between landlords and tenants,
A dialogue discusses the benefits of documenting rental agreements
- Documentation of rent agreements reduces disputes on rents and helps in controlling rental relation between parties
- Promotes the sustainability and development of services.
- Specialized administrative units to consider disputes arising from the rental relationship with the courts
Regulating the relationship and contracts between property owners and tenants is one of the roles played by municipalities worldwide, including Muscat Municipality. The Omani legislator has paid great attention to as it aims to achieve a balance in rental relations between landlords and tenants, along with its additional value, represented by the financial return that the government can benefit from for the services and projects provided by the Omani legislators.
To achieve this, the Omani legislator has regulated the contractual relationship between the lessor and the lessee through a set of legal legislations that have been issued to comply with the requirements of each time stage in order to achieve the required balance in the real estate market between supply and demand, and to protect the rights of the parties to the lease agreement.
Regulatory frameworks:
Director of the cases and grievances Department of Muscat Municipality- Mr. Khalid Al Saidi clarifies that the Omani legislation has paid great attention to the relationship between landlords and tenants, starting by the Royal Decree No. 6/89 on regulating the relationship between owners and tenants of housing, commercial and industrial shops and registering their lease contracts, and which
has been amended several times, most notably by Royal Decree No. 72/2008, and then amended again by Royal Decree No. 107/2010،
These legislations included the provisions of the lease agreement, definitions and parties, registration in the competent municipality, termination and renewal, exceptional cases of requesting the termination of the contract before the expiration of its term, the obligations and rights of the parties to the contract, and the regulation of the lease agreement is also mentioned in the Civil Transactions Law issued by Royal Decree No. 29/2013.
Benefits:
Al Saidi indicates the benefits of documenting rental contracts that the subject goes beyond to include primarily the parties to the rental relationship and the benefit to both parties the lessor and the lessee, where the lease constitutes a protection and safety for both within the scope of legally applicable controls,
Al Saidi continues, "there are a number of advantages and returns that are achieved from the organization of the subject and the extent of commitment to it, such as determining the rights of the parties to the contract, the amount of the fare and the duration of the contract, the method of payment of the fare, and the purpose of the rent, which would reduce the appearance of disputes and problems later between the parties to the contract".
Even in law, documentation provides an opportunity to resort to contracts when an issues or lawsuits arises, as it is possible to rely on lease contracts documented with the competent authorities, and also ensures that the lease contract is officially documented with the municipality in documenting the tenant`s data, providing information about all customers in the rental sector.
Undocumented rights:
Al Saidi emphasizes: "failure to register rent contracts in accordance with the procedures established by law, creates many problems, including the occurrence of disagreement between both parties; in case the contract does not exist, the rights are absent".
Tax evasion:
Al Saidi believes that tax evasion is one of the reasons why people do not register rent contracts, and the phenomena should be handled before it grows. Furthermore, the society is deprived of benefiting from the proceeds of these fees, which can be reused by the state for the services and projects implemented across the country. One of the most important forms of evasion is the conclusion of a lease agreement between the lessor and the lessee at a value much lower than the real value, or not concluding a lease agreement between the parties at all, in addition to the absence of a title deed for many rented household buildings, as well as the ignorance of many contractors about the risks of not concluding lease agreements, which subsequently puts them in a lot of problems and the loss of rights for both parties.
Incentive procedures:
Al Saidi concludes, "in order to encourage parties to register their contracts with the competent municipality and to address tax evasion, new administrative divisions have been established to consider disputes arising from the rental relationship with the courts, and their rulings are covered by expedited enforcement, under Article (15) issued by Royal Decree No. 72/2008. The law on streamlining litigation procedures in relation to some disputes was also issued by Royal Decree No. 125/2020, which approved in Article VIII of the notarized lease agreement in accordance with the established legal procedures the force of the executive bond, so that it saved the parties to the contract litigation procedures, as in case of disagreement between them, one of the parties resorts to the enforcement.
The rights guaranteed by the contract are implemented without the need to file a lawsuit, and this procedure achieves simplification to the lease agreement, and saves them the time, effort and money required to file a lawsuit and start its procedures, which may be lengthy. In addition, work is underway to issue legislation setting the minimum rental value for each property in each area of Muscat Governorate, as this measure would provide protection for the lessor from the excessive rise in the rental value, and will also contribute to strengthening the trend towards documenting the lease agreement between the two parties in order to preserve the rights.
In view of the benefits that have been mentioned resulting from the registration of lease contracts and the payment of legally prescribed fees, Muscat Municipality calls on everyone to register lease contracts with the competent municipality.