Rent-to-Own Draft Law to Increase Home Ownership for Low Income Brackets
The Cabinet approved a rent-to-own draft law that would allow low-income individuals in Lebanon to own houses without having to put down payments.
The draft law is a result of cooperation between the Public Corporation for Housing (PCH) representing the government, commercial banks, and the private sector.
The rent-to-own draft law authorizes real estate transactions whereby a property is rented in exchange for yearly or monthly payments, and would allow the renter the option to eventually own the property. The law would exempt the renter from a down payment, which is a standard condition of banks to extend a regular mortgage. The draft law also provides incentives to developers to build properties dedicated for rent-to-own.
The incentives include exemptions from construc- tion permit fees, and exemptions from insurance fees in case the developer takes out a loan to build the property. Other incentives consist of waiving stamp fees on all documents and transactions related to building the property; and waving all stamp fees for rent- to-own contracts between landlords and tenants. Also, commercial banks that extend loans to the developers will be able to use their reserve requirements based on a proportion to be determined by the Central Bank of Lebanon.
The draft law is awaiting the approval of the Parliament. The government approved the draft law and passed it to Parliament. The Parliament's Justice and Administration Committee discussed the draft law, but Parliament has yet to ratify it on the grounds that it might be voted as a package that would include the amendments to the rental law.
Source: Lebanon This Week, Byblos Bank economic publication
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