Unveiling Lebanon's rent law changes: What is at stake for 24,000 tenants?

The "uprising" has not settled yet among the old tenants, who objected to the modification made by the Parliament in its recent session regarding the non-residential rental law.

So, what do these amendments, affecting, according to the Ministry of Finance's statistics, around 24,000 tenants across Lebanon, entail?

Firstly, the new law sets a time limit for non-residential old leases, capped at four years, after which the lease becomes "free" and subject to agreement between the landlord and the tenant.

Secondly, the new law specifies the annual rent replacement at 8 percent of the leased unit's value. The tenant is required to pay 25 percent in the first year, 50 percent in the second year, and 100 percent in the third and fourth years.

In other words, for a unit valued at, for example, $100,000, the annual rent becomes $8,000, of which the tenant pays $2,000 in the first year, $4,000 in the second year, and $8,000 in the third and fourth years. 

Tenants consider this 8 percent excessive and seek its reduction to 6 or 5 percent.

Thirdly, the new rental law grants landlords the right to reduce the time limit for old leases from four years to two, on the condition that they receive, during these two years, rent according to the old law.

Fourthly, the new law approves tax exemption for landlords for the past ten years at a rate of 90 percent on fees, fines, and taxes. 

These amendments are based on the principle that justice is eternal. They aim to protect both the landlord, who receives, for example, LBP 10,000 as annual rent for their established shop in Sidon, and the tenant, who has benefited from the old lease over the past years, postponing his eviction to four years.

Just as tenants object to the law amendments, landlords also object to what the Caretaker Prime Minister Najib Mikati has done, as he did not publish it in the official gazette to become effective. 

They consider that the Cabinet, in its session on December 19, 2023, decided to publish all laws issued in the last session of the Parliament, including the non-residential rental law.