By Muna Al-Fuzia
For millions of people living in apartments, a new month means the rent is due. Of course, in normal circumstances, this is not an issue. But with the COVID-19 outbreak, many tenants have stopped working. There are fears of job losses or reduced salaries, and rent is turning into a cause for concern and dispute, especially for low- and middle-income people. But hopefully not for long.
The economic repercussions of the coronavirus crisis have affected many sectors around the world and not only in Kuwait, including the real estate sector, which is natural, although its impact in Kuwait is still limited for many reasons. But, the Kuwait Real Estate Union is trying to avoid a crisis by having a win-win solution for both owners and tenants.
The real estate sector, including its investment, commercial and residential fields, has entered into a new phase of unprecedented economic repercussions. But the view is not completely bleak in Kuwait because the situation is not the same for everyone.
A large number of employees working in the government and private sectors, especially in major financial institutions, are still receiving their salaries as usual, so their rents should not be reviewed, as their salaries were not affected. But they are worried if the crisis continues for a long time, it may lead to a change in their salaries or benefits.
All real estate owners are also not the same – some have reduced the rent or waived it. Then there are those who see that the majority of people in Kuwait are employees who still receive their salaries as usual, so a reduction is not necessary, despite the large number of sympathetic campaigns urging landlords to reduce or waive the rent for tenants during this crisis.
I think it is necessary to take into account the situation of the real estate sector after the COVID-19 crisis, when property owners may be forced to reduce the rent to attract new tenants. So reaching an amicable compromise between the owners and tenants to reduce the rent is required – this is my personal opinion. I believe that the real estate sector is one of the largest and most powerful sectors of the state. Even if the owner does not receive the rent in full, say for a period of two months for example, he will not be harmed.
Among the solutions adopted by some landlords is to obligate the tenant to pay only 50 percent of their rent and postpone the remaining 50 percent to pay in installments in accordance with the tenant’s financial condition and the extent of his losses.
I believe that low- and middle-income people and small businesses have been badly affected by this health crisis. Everyone knows that restaurants and cafes are the most affected. As their activities stopped, as well as their income, many complex owners have taken into account the conditions of investors.
But the problem is the inability to determine the time duration of the crisis, which adds further difficulty to the issue. There is no doubt that the companies that were able to operate successfully in this crisis are those that are doing business using the Internet and providing online services – they have witnessed unprecedented success.
I believe the state can intervene to impose a law that reduces the proportion of the value of the rent of investment and residential properties for a specific period from the start of this crisis until its end, because real estate is an important and fast-growing sector.