Commercial property rents to stay stable

The Lease Law aims to limit the escalation of rental prices and regulate relations between landlord and tenant

HH the Emir Sheikh Tamim bin Hamad al- Thani has ratified the Cabinet Decision No 15 of 2014, extending the lease contracts of  non-residential properties for one more year.

The measure is expected to keep the rents of commercial properties under control and thereby curb price rise and  inflation.

The decision was made after perusal of the Constitution, Law No 4 of 2008 and its amendments and the  Emiri Decision No 29 of 1996 and the Cabinet Decision No  8 of 2012 to extend lease agreements of certain places rented for non-residential purposes and the  proposal made by the Minister of Municipality and Urban Planning.

It  is effective as of  February 15 and shall be published in the official gazette, a statement issued by the Cabinet said yesterday.

Article 1 of the law says lease agreements of places and parts of places rented for non-residential purposes which are subject to Law No 4 of 2008  and still rented as of February 14, 2014, shall be extended for a year starting from the next day.  The law will not be applicable if  the lease agreement provides for a longer period or that the lessee is not willing to renew the agreement.

According to Article 2,  lease agreements of headquarters of commercial companies, offices of lawyers, accountants and engineers, veterinary clinics and the offices of agricultural, animal wealth and fish experts shall be excluded from the provisions of the legal extension decided in the preceding Article.

The Lease Law No 4 of 2008 came into force on  February 15, 2008. It governs leases of all types of property in Qatar save the state’s public and private properties, agricultural land, vacant plots of land, industrial land, tourist apartments hotels and units and residential units designated by the State or companies for their employees.

The Lease Law aims to limit the escalation of rental prices and regulate relations between landlord and tenant. The law provides rental caps, the establishment of lease registration offices and  Rental Dispute Committees.

Article 10 of the Lease Law provides that the landlord may not request an increase in the rent value of any existing or new lease agreement except in accordance with a Council of Minister’s Decision. The Council of Minister’s Decision No 9 of 2008, setting controls, duration and percentages for rental increases (the Rent Control Decision) is effective from February 15, 2008.

Under the Rent Control Decision, leases entered into before January 1, 2005, may only have their rental increased according to the percentages set out in the decision.

Shop rents have been skyrocketing in Qatar due to a severe shortage caused mainly by demolition of old buildings and the demand generated by more and more companies, retailers and businesses entering the booming local market.

Recently the government has initiated steps to settle disputes between landlords and tenants quickly. One of the proposals was to arm the Rent Dispute Resolution Committee with more powers so that  the decision of a Resolution Committee is not challenged in a court.

Measures are also being taken to make sure that disagreements brought to a rent dispute settlement committee are decided on a fast-track basis - within a month or 45 days, it is learnt.