Upgrading housing policies
Draft law proposes exemptions to allure investments into the construction of housing units under lease-to-own act
The Minister of Social Affairs, Wael Abu Faour, submitted to the Cabinet a draft law for amending some articles of the lease-to-own law. The suggested amendments seek to encourage investments in the construction of housing units to be later operated under the lease-to-own act.
According to the said law, the lease-to-own concept states that the tenant pays the regular rental fees which are to be considered as installments on the price of the property. After the tenant has paid the whole price, the ownership of the property would be transferred to the tenant according to the conditions agreed upon.
The draft law suggests a number of major facilitations for investors in the field of building housing units, including price cuts on construction permits and insurance fees. The draft law indicated that these exemptions would be prearranged through an agreement between the investor and the Public Corporation for Housing (PCH).
The draft law also entails some exemptions for fees which tenants have to pay during the transfer of the property. The draft also suggests exempting banks which lend the investors from the reserve requirement preset by the Central Bank, which ultimately reduces the interest rate on the loans.
Date Posted: Jan 27, 2012