Landlords and tenants in the capital are highly prone to fall out with each other as they hardly ever enter into rent deals as per the rules and regulations.

Up to 50 percent of complaints lodged recently at the District Administration Office (DAO) appeared to demand eviction of tenants or searches for those who decamped without paying rent. In just the first four days of the current Nepali month of Asoj (Sept 16-20), six out of 12 complaints registered at the complaints section of the DAO were about rent.

A study by Republica of complaints lodged by capital-dwellers at the local administration over the last two months showed that landlords usually do not formalize rent agreements the better to evade tax, and verbal agreements could fall apart any moment.

Out of some 800 complaints received by Kathmandu DAO over the last two months, nearly 300 were about rental disputes and almost all of these were filed by landlords. The DAO forwards the complaints to the police for the latter to try reconciliation between landlords and tenants.

“There is a widespread trend of avoiding documentation and legalization of rental deals,” said Chief District Officer (CDO) of Kathmandu Laxmi Prasad Dhakal, adding: “It is natural that disputes arise when there are no legal obligations involved.”

Those who landed at the DAO on Monday to complain about rental disputes had different stories to tell but they eventually furnish the same reason for not using documentation--tax woes.

“I simply believed him. For two years it was alright but he in the end showed his real character, making off with six months" unpaid rent,” fumed Krishna Subedi, 40, of Kalanki. Subedi has filed a complaint against one Karma Gurung, reportedly a manpower agent, who rented the second floor of his four-storied building. Subedi does not even know Gurung"s real address. “Karma is at large,” he said, adding that he would be strict over rent terms and conditions in future.

“You are traditionally supposed to obey the landlord if he asks you to clear out,” said an official at the complaints section.

Most complaints received by the DAO reflect situations where tenants show some kind of resistance. “It is not necessarily when a tenant does not adhere to the verbal agreement. Many file complaints when they find another tenant ready to pay more rent,” said CDO Dhakal.

“When there is no legal status involved, we are not compelled to intervene unless there is concern about security. But as a matter of social responsibility, we generally draw both sides together for reconciliation,” he added.

Dhakal says he frequently gets to handle complicated rental disputes that local police fail to resolve. “Such matters land on my table even though they generally seem quite petty,” he said.

Rent disputes are not only individual landlord-tenant affairs; there are complaints at the DAO against schools, restaurants and businesses. “For lack of active monitoring by government agencies, rent deals can easily go awry,” Dahal added.

Under the law, a landlord has to pay 15 percent rent tax to the government. Besides the common trend of totally flouting that by not formalizing the rent deals, there is an overwhelming tendency to understate the rent amounts to reduce tax exposure.

The government had tried to bring house rent under the tax net two years ago by making civil servants furnish details about their status as landlord or tenant, if applicable.

“That has to be implemented in the long run,” Dahal said. “Legalization of rent deals could also help maintain a households database for the city, something crucial for internal security.”

source: Khanal, S. (2010),"Rent disputes rife for lack of documentation ",republica,23 September 2010