City landlords waive rent arrears for tenants

Police offers close one of the arcades on July 14. City landlords are being forced to waive rent arrears as the economic damage from Covid-19 pandemic renders tenants unable to meet payments. PHOTO | FILE

By Tonny Abet

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City landlords have waived rent arrears for tenants who have been struggling to pay because of the lockdown effects.

The decision by the owners of arcades and malls came after a number of traders started leaving the buildings in the city centre to operate shops in city outskirts.  
According to Kampala City Traders Association (Kacita), traders are failing to keep their businesses afloat because of low purchasing power.
Mr Haruna Sentongo, a city landlord, told  Daily Monitor on Saturday that he tried to engage his tenants to pay their rent arrears but they failed.
“I have lost more than a billion shillings because the economy is bad and businesses are down. I have forgiven tenants rent arrears worth  Shs1 billion for the past six months, from May to October,” he said, adding that chasing tenants is not good for business.  
“We need tenants and tenants need us. We must work together and support each other for the economy to revive,” Mr Sentongo added.
He said those pardoned include 120 tenants from Haruna Mall in Ntinda. 

Kacita says
Mr Everest Kayondo, the chairperson of Kacita, said traders operating in Aponye Mall, Dembe Arcade and business centres managed by Knight Frank Uganda Ltd such as Forest Mall, Lugogo, have been given rent waivers.
Mr Kayondo said government should intervene and help traders who are struggling to pay rent.
He added that some landlords are also making “empty promises” just to attract traders to their empty premises.
“Ham [Kiggundu] had said he excused his tenants for some months but he later demanded them to make a full payment because there was no agreement written down. Operators like Knight Frank has done well by writing clearly to their tenants excusing them rent arrears for April to May; then for June to July, the tenants were supposed to pay 35 per cent less; August to October they were supposed to pay 25 percent less,” he said.
Mr Kiggundu said: “Landlords are handling the issue of rent payment and waivers in different ways; it’s a discussion between me and my tenants.” 
Mr John Walugembe, the executive director of the Federation of Small and Medium-sized Enterprises, said more businesses are closing because customers are not coming and that those who are coming make purchases on credit.
Mr Walugembe appealed to government to focus on resuscitating the businesses that are dying and stimulate those that are struggling instead of only focusing on generating of taxes.
“We engaged the Finance Ministry for a stimulus package. We asked government to put in place an emergency economic injury fund which is a partial grant and loan which is interest-free, and we also asked for a tax holiday,” he said.
Mr Walugembe added: “The government put in place close to Shs1 trillion in Uganda Development Bank (UDB) for onward lending and other amounts of money for lending to SACCOs, among others. But there are many complaints about hardship in accessing the money at UDB” .
He asked government to consider coming up with alternative means for business owners to access the stimulus money.