Lebanese government silent in the face of housing crisis

Lebanon’s social structure is threatened by the massive economic crisis facing the country, a result of a sharp depreciation in the local currency’s value. Affecting every industry and field, the crisis has also hit the real estate sector –from purchasing to renting– and threatened housing security.

Thousands of families are unable to cover their costs of living in light of the ongoing crisis and a state that remains entirely absent. But is there a legal end in sight that can protect renters and provide them with some form of security?

Lebanon lists the right to decent living and housing as one of the key human rights, as per the 1948 Universal Declaration for Human Rights and its subsequent ratification in the 2008 Arab Charter for Human Rights. This, of course, comes in spite of the Lebanese state’s failure for half a century to devise solutions to the housing rents signed before the year 1992, also known as the “old rent” agreements that are forcibly extended.

According to article 38 of the Arab Charter for Human Rights, “Everyone shall have the right to an adequate standard of living for himself and his family, ensuring well-being and a decent life, including adequate food, clothing, housing, services and a right to a safe environment. The State Parties shall take appropriate measures within their available resources to ensure the realization of this right.”

A calamitous crisis

The fluctuating Lebanese lira, at some point in recent months, hit LL 15,000 per $1 on parallel markets –which means the monthly minimum wage became valued at $45 instead of $450. The depreciation is especially dangerous for individuals who get paid in the local currency, but whose rental contracts are set in dollars.

In the law, a rental contract is based on the rules set by the landlord. This freedom does not mean that the renter is forced to pay in dollars, particularly when the contract does not explicitly require the tenants to pay in the foreign currency. This holds true even if the value of the rental is not written down in Lebanese liras.

Those whose contracts are explicitly set for payment in dollars are not so fortunate, with tenants being legally required to pay in the currency stated in the contract and initially agreed on between the two parties. In such a situation, tenants are required to abide by the contract itself, rather than its essence, which threatens housing security in the middle of an economic crisis by forcing tenants who cannot pay out of their homes.

Housing Monitor

The Housing Monitor collected a number of complaints that shed light on the quickly deteriorating conditions faced by the most vulnerable communities in Lebanon.

During the first two months of the year, the online platform collected 88 housing vulnerability complaints affecting nearly 240 people –half of which are children. From these 88 reports, 36 belong to women living alone with children under threat of eviction.

The Housing Monitor aims to collect and consolidate housing data in one place, in addition to proposing alternatives that help improve the right to adequate housing in Lebanon. 

The monitor seeks to develop an integrated and holistic approach to housing, which entails more than just a shelter. It includes social networks and access to other resources provided by the surrounding area of residence.

Recently, they installed a new hotline (81017023) to file any complaints relating to housing security, in order to arrive at a “zero eviction” policy.

The monitor has also requested setting up a program that supports homeowners and renters with limited incomes, providing them with alternative housing solutions according to indexes that take currency depreciation and wages into consideration. Additionally, the platform is calling for the implementation of rental contracts in the local currency and the protection of tenants from the burden of inflation.

Economic Collapse

Nadine Bekdache, head of the Right to Housing Unit of the Public Works Studio which manages the Housing Monitor, spoke to Beirut Today about the rent crisis.

Beckdache points out that the housing sector is not a productive sector and should not experience inflation in light of the economic crisis as long as the official exchange rate remains pegged at LL 1,500 according to the Central Bank.

The government, according to the co-founder of Public Works Studio, should intervene to prevent rent and ownership prices from rising since the right to housing is an essential human right in Lebanon.

Individual wages did not see a proportional increase with the increase in living costs –and renting costs. Instead, they remained the same despite the depreciating local currency and its value against the dollar.  

“We should not link rent to the currency’s depreciation, as there are circumstances and laws that are stronger than the freedom of contract,” she said. “Rental contracts conducted in dollars are paid according to the official exchange rate, LL 1,500.”

As per on-the-ground observations, Bekdache clarified that landlords renew contracts despite the difference between exchange rates when tenants are capable of paying in instalments despite the economic crisis and according to the official exchange rate. However, some tenants are incapable of making these payments in light of the collapse, and after losing their jobs.

She criticised landlords who lock up their homes to rent them out to tenants capable of paying in dollars, while in other countries, landlords with vacant properties are forced to pay taxes. She considers the lack of governmental interference in such a situation to be negative because it allows landlords to keep their properties vacant, leading to a rise in housing prices.

She called on members of parliament to come forth with urgent legislations to set the official exchange rate at LL 1,500 for housing contracts in dollars, to halt evictions.

Bekdache affirmed that Lebanon is in a state of collapse, with the ongoing economic and social crises and the pandemic, and in light of this, evictions should be banned under any circumstances. This was the law after many homes were damaged in the Beirut blast, in order to protect tenants, especially non-Lebanese, from any form of exploitation by landlords.

“Housing security is threatened so long as the state is absent or failing to interfere,” she said.

Finally, she revealed that tenants are under tremendous pressure in the absence of any law pertaining to rental contracts, as evictions should be stopped immediately and the government should come forth and admit that there is a housing crisis affecting the country in the absence of any governmental safety net.

Three exchange rates

Lawyer Maher Khaled, who regularly follows up on cases of the like, differentiated between the three exchange rates in the country: the official exchange rate of LL 1,500, the commercial banks’ exchange rate of LL 3,900, and the black market exchange rate of almost LL 12,000.

“We are today at a crossroads between the tenants and landlords with regards to rental contracts, which are generally set via agreement between the two parties over a certain period of time,” Khaled told Beirut Today. “This is usually for three years, unlike the old leases.”

“The increase in the dollar exchange rate has put landlords at a conflict of interest, should the contracts with their tenants state that payments must be made in dollars,” he added. “Landlords will want payments in the currency stated in the contract, but this is crippling for tenants who had signed the contract under the official exchange rate.”

Should the landlord refuse to take payment in the local currency, added Khaled, “the tenant can drop off the payment at the notary public and consider himself as having paid his dues.”

If this persists, landlords may refer to courts. Despite the fact that multiple laws state that payments should be paid in the local currency, courts have yet to come to one unified decision on this issue.

A Peaceful Solution

“Oftentimes, we try to find a peaceful solution that satisfies both parties,” said Khaled.

The lawyer added that a minor increase in the rent as per the tenant’s capacity is sometimes needed to make the landlord feel like he or she is not being wronged at a time when courts are using the official exchange rate and no decision is being taken to contradict that.

The landlord may not accept the “peaceful” solution as the outcome closest to justice, and it is within their power to not renew the rental contract after its duration has ended –which poses a new issue for the tenant.

“The best solution is the issuance of a law that determines the price of repayment of loans or the payment of rental fees. The adoption of the rate of the platform or any rate may help avoid any clash, and evicted tenants can use it to plot down their future.”

As long as the official exchange rate remains pegged at LL 1,515, then landlords are legally required to abide by it. If they refuse to receive payments in Lebanese liras, then it is legally possible to send the payment to the notary public along with a statement listing the official exchange rate on the day of payment to ensure their rights at a time when both landlord and tenant await a law that specifies a “just” exchange rate.