How the new rent and NHIF laws will impact your pocket
What you need to know:
Summary:
- The rent bill, if passed into law, will affect tenants and landowners in both commercial and residential property
- With the NHIF policy, every Kenyan aged between 18 and 65 years regardless of their social status will contribute a mandatory fee of Sh500 monthly
The government is working to establish two laws that will affect your household and your money. The first is a bill, dubbed the Landlord and Tenant Bill of 2021 that is targeting the property sector. This bill, if passed into law, will affect tenants and landowners in both commercial and residential property. This bill is sponsored by the National Assembly Majority Leader and the Member of Parliament for Kipipiri Amos Kimunya.
The second is a policy plan from the National Treasury. This policy plan is part of the government's drive to provide Universal Health Care through NHIF and has been backed by the Parliamentary Budget Office (PBO). Let us examine how these two laws will affect you.
Landlord and Tenant Bill of 2021
This bill is seeking to repeal and collapse into one unit the Distress for Rent Act (Cap 293), the Rent Restitution Act (Cap 296), and the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act. According to Mr. Kimunya, the bill is being backed by the national government. If you are a landlord, says the bill, you will face six months in prison if you evict your tenants or seize their belongings for defaulting on rent. To avoid jail time, you will be required to cough up a fine that is up to twice the amount of rent in dispute. If you want to evict a tenant or auction their property, the bill says that you will need to first go through a tribunal. "A landlord and any agent or servant of a landlord who evicts a tenant without the authority of a tribunal or willfully subjects a tenant to any annoyance to induce or compel the tenant to vacate the premises or to pay, directly or indirectly a higher rent for the premises commits an offense," the bill says. "No landlord shall, without legal process, seize a tenant's property for default in the payment of rent or the breach of any other obligation of the tenant." The bill shall also mandate you to keep all the signed records of all the rent that has been paid. You will then share these records with your tenants. If you fail to keep a record of rent paid, and a tenant reports you to the tribunal, you will risk losing one month's rent.
The bill is also planning to allow the State to start controlling rent in both residential and commercial properties. If you own rental houses or a commercial building, this probable law will prevent you from raising rent above the annual average inflation rate for the preceding year.
"Under the new law you will be able to raise rent beyond the stipulated average rate of inflation if you start paying higher land and property rates to your county government, or if additional mandatory services have been introduced," says Anthony Muchiri, an advocate of the High Court. These include services such as security, home fibre, garbage collection, and interior and exterior upgrades.
If you are a tenant, there are instances where the landlord will kick you out. According to this bill, a landlord will be able to kick you out if you neglect the rented house, cause damage to the house, start an illegal business, or if you become a security or health risk to other tenants. Once passed into law, this bill will replace the Business Premises Rent Tribunal (BPRT) which handles commercial rent, and the Rent Restriction Tribunal (RRT) which handles residential rents.
Universal Health Care Scheme
This scheme will target every Kenyan aged between 18 and 65 years regardless of their social status. Under this scheme, your household will be required to pay a compulsory Sh6,000 per year to the National Hospital Insurance Fund (NHIF). You will pay this money in monthly installments of Sh500 per month. According to the 2021 Budget Policy Statement, the money you pay will go to the scheme that in turn should provide you with inpatient and outpatient coverage.
In December 2020, Acting Health Director-General Patrick Amoth said that under this scheme, you will be able to cover your dependents up to the age of 24 if they are in school, or throughout their lifetime if they are severely disabled. "This mandatory UHC scheme will act as the national health scheme for all persons residing in Kenya whether one is formally employed or not," he said. Currently, it costs between Sh500 and Sh1,700 per month to be covered by NHIF. Only 17.6 percent of Kenyans are covered by the NHIF while 79.8 percent of citizens do not have an insurance policy.
The employed will however continue remitting their monthly NHIF deductions according to their salary level. "Nothing will change for the employed since the aim is to bring the unemployed and uninsured under the health coverage," said Dr. Amoth.
