Lebanon Businessnews News

Dispute committee in new
rent law found unconstitutional
Gap may allow law to become immediately enforceable
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The Constitutional Council in charge of reviewing appeals regarding the new rent law accepted a request for an injunction submitted by petitioners. The appeal was addressing the constitutionality of a committee put in charge by the rent law to negotiate settlements on rental pricing and evaluations.

The Council said that this committee was unconstitutional as it lacked the elements and conditions to allow it to issue legal decisions on matters related to rent disputes. The Council’s decision on this matter is final and non retractable.

The Council addressed Articles 7, 13 and 18 (paragraph 4) of the law passed by Parliament on April 1 of this year concerning the rent committee composed of a retired or active judge, as well as four members representing respectively: tenants, landlords, and the Finance and Social Affairs ministries. The law gave the committee powers to issue legally binding decisions related to rent valuation disputes arising between tenants and owners.

The Council passed its decision in a majority vote with 7 out of 10 voting against the constitutionality of the committee. “The appeal was presented by tenants but landlords are as well happy to acknowledge the revoking of the articles in contention because they are in a hurry to pass the law in any way possible,” said Nader Gaspar, member of the Beirut Bar Association.

He said the issues related to the committee were complex and required owners and tenants to each hire two separate experts, an engineer and assessor, to assess rental values and who could offer differing estimates. “The Council’s decision as such relieved both sides, but now I believe Parliament will have to look at this and other issues that might be disputed in the law,” said Gaspar.  

He said if the committee issue is correlated to other issues in the law, Parliament has to discuss it. “I believe it is. It’s a crucial dispute carrying legal ramifications but this opens the door for Parliament to review other articles or add new ones which will in turn set off more appeals,” said Nader.  

He said the rental law has expired since March 13, 2012, and the new law won’t take effect until 28 December, 2014. “So we are in a void period which legally speaking allows landlords to sue tenants and evicts them under contracts and obligations laws, especially if the proposed law doesn’t take effect by end of year,” said Gaspar.  

The draft law has been a subject of controversy for the last two years with tenants saying it would displace thousands who pay rent under an old law governing lease contracts enacted before 1993. Rental fees under the old law are on average less than LL1,000,000 annually, much below today’s estimated values.

The new law proposes rents would increase incrementally over a period of 12 years. At that time, owners have the option to either sell the apartment or lease it under a new contract and price.
Reported by Hadi Khatib
Date Posted: Aug 07, 2014
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