Sneha Koirala

With centralised development concentrated mostly in Kathmandu valley, settling down in the capital is a necessity for most in terms of opportunities and exposure. Every year, there is a massive migration of prospective valley dwellers, and the perpetual struggle for a proper shelter to reside in.

“Usually, it is students and service holders who enter the valley, usually with their immediate family,” says Prabesh Dhungana, a student and a tenant at Baneshwor. According to Dhungana, he came to Kathmandu around six years ago to pursue his certificate level education and since then, has settled in the valley with his family who followed him two years later. He says, “We have a three bedroom apartment with a separate kitchen and common bathroom and are paying around Rs 15,000 every month. Though having a house of our own could have been more comfortable, it is not possible due to high prices.” Dhungana shares that while he does have a written contract regarding payments with the house owner, other charges are excluded. He says, “It’s all about mutual understanding, and we can be asked to move out anytime. The relation between tenant and landlord is a very

subjective and individual matter in Nepal, and depends on the ties you build.“ He adds, “Water supply has always been a problem and we even put off adding an inverter as nothing is assured about our stay. This instability is a universal problem for valley dwellers living in rented homes.“ Renting a house, however, is not just the concern of the owner and the tenant -the government is also an equal stakeholder. Each landlord needs to pay 10 per cent of the fixed amount to the government as rent task and deposit two per cent to the local government unit. However, almost all landlords avoid this. “House owners pay tax only while preparing documents regarding one's property required for visas and documentations. This may be because of the slack laws regarding the tax. Reneging on the payment does not have any serious consequence, as government has hardly any right to impose the regulations,” says Balram Tripathi, senior administrative officer at Revenue Department of Kathmandu Metropolitan City Office.
According to Tripathi, the contract between tenant and landowner is signed in accordance with demand and requirements of both the sides. “We are just concerned about the contract amount for the taxation, as rent and lease contract does not have much value in Nepal.

However, tenants are advised to evaluate their contract, as it will protect their rights by helping them claim refunds in unfair situations,” he says. Besides rent tax, local government also determines specific land and property tax to be paid by each house owner after evaluating the land, which very few of them pay.It is not just tenants who suffer — house owners profess to have their own woes too. Rita Gurung, a home owner at Boudha says, “Though I can increase my income by renting out my house, the maintenance of the house and getting good tenants is

tough. Moreover, there is always an issue of good roads and water along with electricity scarcity.“ According to her, though her house allows her more freedom and right, renting a space is more profitable for those living here temporarily. She says, “If you rent a place, you can leave it locked under the supervision of the owner. We do not have that luxury.“ According to Gurung, she sets the rent amount depending upon the family's size as well as estimated income of the prospective tenant. There is no hard and fast rule regarding he rent amount or the contract.

These days, brokers and agencies also play a role in securing houses for rent.“We help prospective tenants and owners to meet. However, fur ther dealing, negoti ation and under standing takes place between the two parties,” informs Sudeep Maharjan, business and development officer at The Realtors. He adds, “We charge a month’s rent and certain per cent of the transaction on deals that pass through us. The charge is flexible and depends upon the negotiation.” With the price of property soaring sky high, it is no wonder valley dwellers are looking for newer ways to rent and lease.

However, the system needs to be brought within strict legal framework if it is to benefit all parties involved.

source: Koirala, Sneha (2011),"Rental Property Still a Hassle", The Himalayan Times,3 Dec 2011