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Maldives: Landlord and Tenant

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Maldives landlord and tenant law is pro-landlord

Thanks to Shah, Hussain & Co.

Rents

There are no rent control laws or regulations. The initial rent can be freely agreed between the owner and the tenant. The rent can be revised after the expiry of the initial contract, or by mutual agreement before the end of the lease.

Rents of land, houses and apartments have been consistently increasing over the years, despite the boom in the construction of multi-storey buildings, especially in the capital Male’.

Deposits and advance payments

The tenancy contract may stipulate a security deposit varying between one to three months’ rent, as security for payment of bills (e.g. electricity, water, cable TV etc.).

The landlord may also request payment of a couple of months’ rent in advance, which is usually set-off against the last months of the tenancy period.

Duration of contracts and evictions

State-owned land cannot be leased to owners for residential purposes for more than 15 years at a time (Regulation on Leasing of Land 2002). No such caps restrict private land leases, but there are far fewer private leases for residential purposes.

Eviction of tenants is best done through a Court Order. The process may take 3-6 months or more. The Maldives Police Service can assist with enforcement, to physically evict the tenant.

In the past, and in some cases now, some landlords have filed reports with the police, requesting them to act as mediators to resolve the dispute. The police assist on a case-by-case basis, physically evicting tenants who unlawfully refuse to leave. As a third party, they usually refuse to act, unless serious and unfair consequences could result from the eviction (family with no place to go, children out of school).

All leases for more than one year must be in writing, and registered at the relevant government authorities (Regulation on Leasing of Land 2002).

Neither the Act nor the Regulations prohibit the tenant from sub-renting, though the lease agreement may specifically restrict this right.

The effectiveness of the legal system

A multitude of cases has left the courts saturated.

The landlord has to bear the cost of litigation, as there are no litigation cost orders in the Maldives’ judicial system. The landlord is not awarded damages, but can claim from the tenant the rent due, the payment of outstanding bills and the cost of repair to the property (if any).

Legislation

Maldives passed its new Land Act and Regulations in 2002. In 2004 there were major amendments to both acts. The Land Act is scheduled to be amended once again in the near future. It is envisaged that fundamental changes will soon be made in the present Act, facilitating a freer flow of land.

Brief history

Property prices have reached very high levels, especially in the capital Male’, where a third of the population, or 100,000 people, reside in less than two square kilometres. Despite efforts at decentralization, the government has not been able to control the influx of people into Male’ from remote islands.

In March 2005 the Hulhumale’ Development Corporation was established by Presidential Decree, to undertake the development of a new purpose-built city. Located in Hulhumale’, this plot of reclaimed land nearly 3 km in size, provided affordable housing and the possibility of land ownership.

Political pressure is building for more tenant-friendly laws, as it is felt that the lack of rent control legislation has allowed landlords to charge exorbitant rents).

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