Lebanon News

Beirut's tenants feel the squeeze

A general view of Beirut, Dec. 2, 2019. (The Daily Star/Mohamad Azakir)

BEIRUT: As the severe devaluation of the Lebanese pound against the dollar pummels the country's populace, one of the issues that has sparked great ire in the country has been that of rent, whose value many landlords have insisted on keeping fixed in dollars, meaning the rates in Lebanese currency have soared beyond the means of most people.

This anger has been on display on the Facebook page "Apartments in Beirut (for Renters and Rentees)," which boasts 48,000 members and has been awash with heated debate over the past month, with posters angrily clashing over the ethics of rents rising in a time of economic crisis.

A common topic of debate and distress for posters is landlords who insist that they be paid in dollars as originally agreed or, if in Lebanese pounds, at the current rate on the secondary market which would be significantly more than if converted at the official exchange rate of LL1,500 Lebanese pounds to the dollar.

But Karim Nammour, a lawyer and researcher at Legal Agenda, told The Daily Star that even if the contract had been agreed upon in dollars, the law asserts that no one can refuse to be paid in Lebanese pounds.

However, Nammour said the value of the pound in relation to the dollar has been complicated by the emergence of four parallel values: the official rate, the rate at which dollars are withdrawn in Lebanese pounds from banks, the rate at official exchange shops, and the rate at illegal money changers.

Nammour said he believed that civil judges specialized in rent disputes will have to intervene to define which value is to be used in rental contacts.

He set out a detailed explanation from multiple legal angles for why he believes the court should establish that rents be paid at the official peg of 1,500 Lebanese pounds to the dollar, with a central argument being that the Lebanese law and Constitution guarantee the right to housing. In the current economic circumstances, this means rents shouldn't be rising while people's wages are generally flat-lining, declining or disappearing. Indeed, under the current circumstances, Nammour believes there is legal justification for the state to reduce rents.

However, with this legal grey area currently unresolved, it comes down to whether the landlord or the tenant will have to shoulder the consequences of the currency’s devaluation.

For example, when Mohamed Mansour could no longer pay his rent in dollars his landlord set his rent in Lebanese pounds according to dollar rate on the parallel market. Feeling the pressure and unable to negotiate with his landlord, Mansour told The Daily Star he felt compelled to look for a new apartment.

Meanwhile, Sophie Ghaziri and her fiance, as well as her sister and her sister's partner, have all been forced to move back into their parent's homes due to financial difficulties. But now that she’s looking to move out again, she’s been shocked by the current rents.

And she’s not alone. Over the past few weeks some of the most popular posts on the Facebook page have been satirical, with one post advertising a house small enough to be held in your hand while another proposes a shed on top of a mountain, with both being advertised for millions of Lebanese pounds a month.

But overall, the posts show that many members are growing increasingly angry at the prices as the financial situation of people across Beirut deteriorates.

“No coherence, no logic in the prices,” said Ghaziri who’s been unimpressed with the attitude of some landlords. “The lack of empathy and sarcasm is frustrating.”

Ghaziri added that in multiple conversations with landlords, they were asked to pay in dollars and when they said they couldn’t pay in dollars, the apartment’s rent in Lebanese pounds was usually calculated at double the official peg, making them unaffordable.

“It is not fair that people are suffering. We have to break it.”

Nadine Bedkache, co-director and co-founder of Public Works, which through their program Housing Monitor analyze housing and inequality in Lebanon, told The Daily Star that in situations where there is a rent dispute or tenants can’t pay the rent, landlords need a court order to evict tenants. But tenants are often unaware of this, and in some of the cases her organization is monitoring, tenants are harassed to leave apartments.

When Mansour posted on the aforementioned Facebook page looking for a new place to live, he received multiple offers, and surprisingly he felt the best offer was for a hotel apartment. The hotel was willing to cut the cost of the apartment in half and accept payment in Lebanese pounds at the official peg.

It makes sense that a hotel during this period of very limited travel and tourism would rent an apartment at a lower price. However, it makes less sense for general apartment rents to be remain constant in dollars as purchasing power declines.

Indeed, rents have been high in Beirut despite demand not meeting supply at the least for the last few years, with Bedkache telling the Daily Star that Housing Monitor’s studies in various Beirut neighborhoods show that between 10 and 20 percent of old apartments built before 1992 are vacant. Meanwhile, a 2019 survey conducted by the American University of Beirut's Issam Fares Institute found that almost 25 percent of apartments built after 1996 were vacant.

While some landlords are calculating rent payments according the Lebanese pound's value on the parallel market, others have allowed rent payments to go unpaid.

For example, Alik, who preferred to only be referred to by her first name, said her family has not been asking for rent from their three properties in recent months. “People are literally scared of going hungry,” she told The Daily Star. “It would be so insensitive to ask for money in such times.”

While the generosity of Alik’s family is admirable, some landlords on the Facebook page have pointed to a number of issues landlords are facing, including the rising cost of living, rising cost of flat maintenance and that some landlords rely on rent as their sole income.

Ghaziri, who frequently posts on the Facebook page highly critical of some landlords, told The Daily Star that her old landlord needed the rent to pay for a sick family member's medical bills and that she understood why he was unable to significantly reduce the rent when she and her partner fell into financial difficulty.

The case of another landlord, who preferred to only be identified as Nada, further demonstrates the complex nature of the problem. Although a landlord herself, Nada was actually living on a property she rented from someone else. When her tenants asked to pay their rent in Lebanese pounds at the official exchange rate, she readily accepted. However, her own landlord refused to pay her the same courtesy, and consequently she was forced to abruptly move out of the apartment she had lived in for 11 years.

Striking a reconciliatory tone, she told The Daily Star that “the whole situation needs us to work for the well-being of all and not only our personal well-being, and to try to find midway solutions that would be fair to both landlords and tenants”

Her sentiments appear to be shared by a few others who have demonstrated a desire to cooperate, with some posters on the Facebook page saying that a few tenants and landlords are beginning to meet in the middle of the debate, converting the rent to Lebanese pounds at a rate midway between the official peg and parallel market.

It's certainly not an ideal situation for either side, but it indicates that going forward compromise may be the only way to weather the storm.

 

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