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Tenants soon to have monthly payment option

Last updated: Wednesday, November 21, 2012 4:12 PM

 

Fatima Muhammad
Saudi Gazette

 

JEDDAH — Officials at the Housing Ministry are to implement a new system allowing tenants to pay rent on a monthly basis.

Abdullah Al-Ahmari, head of the real estate appraisal committee at the Jeddah Chamber of Commerce and Industry, said the decision if implemented will make the rent payment system more flexible.

It will make it easier for people to pay rent instead of having to pay large amounts every four or six months.

There are currently three ways to pay rent. Some people pay every four months, some pay every six months while others pay every year.

Al-Ahmari said this can be challenging for tenants on low to medium incomes.

Tenants will have the freedom to opt in or out of the new system and continue on the existing system of yearly contracts.

He said investors in this sector are against this decision.

They claim that they will be losing tenants who normally rent on a long-term basis and risk being left with apartments that will be left empty for a long time.

Al-Ahmari added: “We aim to serve both tenants and investors.

“At the same time, we are hoping to reduce the number of court cases involving the nonpayment of rent.”

He is hoping the new real estate system will include rules governing late rent payments and any other disputes between tenants and landlords.

Al-Ahmari added: “We are calling for a rule stipulating that building owners cannot pocket more than a certain percentage of profit.

“We want the services provided to tenants to be in line with the rent paid.”

Suzan Masoud, a mother of three, said her husband is always late paying their rent.

Her husband works as a salesperson and earns a salary of SR3,500 a month.

He struggles to pay the rent amount of SR25,000 a year.

She said: “We borrow money from our relatives to meet our daily expenses.

“Our salary is divided between bills and school fees, which we can manage.

“Rent payment is always a problem because with our daily expenses we cannot save money.”

Masoud believes the implementation of the monthly payment system would help them better manage their budget and meet other payments.

She added: “Paying SR2,000 each month is easier than saving and paying in one go.”

The owner of an apartment building in Al-Zahra district who did not want to be identified said he has difficulty collecting rent from tenants every six months and it would be a hassle for him to do the same every month.

He said: “I struggle to collect rent money twice a year.

“Imagine what it will be like if it was monthly? I will be fighting the whole year, which is tiring.”

He believes a monthly system can only work if it protects both tenants and landlords and involves an independent monitoring body to ensure rent is paid on time.

Suhail Sawan, executive director of the Prisoners and Released Prisoners Care Committee, said over 90 percent of families who contact them are struggling to pay their rent.

He believed a monthly payment system will help them more and is calling for it to be implemented quickly.

He added: “Most families obtain loans from banks or their relatives and when the second installment is due they find themselves obliged to contact other people to get money because they are not able to pay back the amount already borrowed.

“If implemented, this decision can rescue many families.”

 
   
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