East African Business Week (Kampala)
John Musinguzi
15 November 2008
Uganda's real estate sector needs regulation if the various stakeholders' interests are to be protected and the state wishes to derive substantial revenue from it.This was stated by Patrick Donald Oucha, the managing director of Seven-Eleven Property Co. Limited, while addressing the media at Kampala Serena Hotel last week.
Oucha while outlining a numbers of challenges before the sector complained of strange scenarios whereby certain houses in Kampala fail to get rented as many people trek out of the city crying of ridiculously high rents.
Oucha complained of certain foreign companies and non-governmental organisations that restrict the liberty of their expatriate staff to rent houses in locations of their choice.
He said such organisations force their staff to rent within a radius of five kilometres from the city centre.
He decried the high insecurity of tenure as only a small proportion ever contracts tenancy agreements or any other legal protections. As a consequence, tenants are always prone to evictions and landlords are also prone to various losses like vandalisation of their propertiesd and non-payment of rent.
Because the sector is not regulated, the state fails to monitor it and derive revenue.
He said a lot of money is wired directly to the accounts of property owners without being taxed. Secondly, because of its informal nature, many unscrupulous characters enter it, con people and tarnish its public image.
State regulation would step up health regulations and ensure high maintenance and estate management standards and guarantee services like security and utilities.
While hailing ongoing efforts to form an association of real estate dealers, Oucha argued that even brokers should be forced to form an association of their own or appendage to definite companies as property stringers to be able to protect their rights against super exploitation.
He observes that the petty inspection fee of some Shs10,000 or Shs20,000 that a self-employed broker pockets in a transaction involving many millions is a high level of exploitation.
"Brokers without identity cards, shabbily dressed, sometimes drunk embarrass the sector by demanding to be paid inspection fees before the inspection is carried out," he complained.
Oucha claimed there is a rough war going on between indigenous and international estate companies, with the latter behaving like sharks unto fishes and wished the state could come in to restore normalcy.
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