What Are The Implications Of Uganda's New Landlord And Tenant Bill ?

The relationship between landlords and tenants in Uganda has, for a long time, been an effectively unregulated space despite growth and developments in Uganda's real estate sector. The Ugandan Cabinet recently approved a bill for the Landlord and Tenant Act, 2018 (the "Bill") which will see Uganda join the rest of the world in regulating this relationship. Below, we highlight the main issues in the Bill.

To whom will this law apply?

The Bill applies to the letting of both residential and commercial premises except residential premises incidental to medical, religious, recreational, educational or similar services; hotels, motels or other transient lodgings; or to occupancy of premises under an employment contract or any premises entered into in relation to such a contract.

It is worth noting that many jurisdictions acknowledge the peculiarities associated with the letting of commercial premises vis a vis residential premises, and as such, enact separate legislation to take these differences into account. Kenya, for instance, has the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act (Cap 310) to specifically regulate the leasing of commercial premises while the Rent Restriction Act (Cap 296) regulates matters incidental to and connected to residential/dwelling houses.

What form will a tenancy agreement take?

A tenancy agreement may be in any form - oral, written or electronic or implied from the conduct of the parties, save where the value of the tenancy is equivalent to approximately USD140 or more it will not be enforceable unless it is in writing or in the form of a data message or unless the party against whom enforcement is sought admits the existence of the tenancy agreement.

In retaining oral and implied tenancy agreements, the Bill ironically retains the informality of the tenancy agreements, which has been the major cause of the discord between landlords and tenants. Business efficacy however dictates the continued informality and the real solution will lie in proper education of landlords and tenants and in the statutory conditions to be implied in every tenancy.

Furthermore, the Bill proposes that the Minister of Housing and Urban Development will prescribe the format of tenancy agreements. With this, there is a risk that the format prescribed may be a "one-size-fits-all" type for both residential and commercial properties, which will not properly take into account the uniqueness of commercial properties whose...