Muscat - 90 per cent of agreements to rent homes are for a minimum one year period in Oman.
Published: Tue 31 Jan 2017, 10:02 AM
Updated: Wed 1 Feb 2017, 9:38 AM
Some expat workers, who had to sign shorter-term job contracts in Oman, are facing a debt trap due to the rent they have to pay for 12 months, Times of Oman reports.
More than 90 per cent of agreements to rent homes are for a minimum one year period in Oman.
However austerity measures and falling oil prices have forced some companies in Oman to offer shorter employment contracts - some as short as six months, the report says.
Though the workers requested to shorten rental leases, many landlords refuse to budge, say estate agents, lawyers and workers caught in the rent trap.
The landlords, who have to pay municipal fees and taxes each time they renew, are wary of short term leases.
According to the report, the rent trap has left some expat workers with huge bills to clear before they can leave the Sultanate. "It's a little tricky for some people in Oman. We have a work contract of six months and a residential contract of one year. Seems more like a leap of faith for us," said Ahmed, an Indian expat in Oman.
According to article 6 of the Oman Tenancy Law, an agreement between two parties can be signed for an agreed duration that could be yearly, half yearly or quarterly, and tenants failing to comply with the duration for any reason can be forced to pay the entire amount in the contract by the landlord.
Jeffrey Greene, Partner and Head of Corporate Advisory at Al Alawi and Co Advocates and Legal Consultants was quoted as saying in Times of Oman that if the tenant has agreed a one-year lease but decides to leave the premises, thus terminating the lease agreement before expiry of the term, then the person may be obliged through the courts to pay the rent for the whole term agreed in the lease.
Greene added that it is all about communication between the landlord and tenant. The compensatory rent can be waived by the landlord or the amount reduced to a month or two but the tenant can also be asked to pay the whole rent.
"Although recently due to drop in demand some landlords have started to accept shorter term contracts, conventionally they shy away from them because they have to pay 10 per cent municipality tax, 5 per cent agent fee and most importantly face the trouble of finding a new tenant," an official from Engel & Volkers estate agency said.
Faisal, a resident of Qurum, said that his work contract expires in May but he recently signed a rental contract until the end of the year as he had no option.
"I asked my landlord for a shorter contract but he told me that he does not want to have the hassle of looking for another tenant in the middle of the year so I had no option apart from signing the year long contract or vacating the house. I hope I get my contract renewed in May else I will have to pay out my entire contract before leaving," he said.
He added that there should be a law which allows an easy route out of the contract if the tenant has been dismissed by the company.
Yasser, a resident of Ruwi, told he was forced to leave an apartment due to flooding but paid double rent for three months as the contract in the water damaged apartment ran for a year.
"I was new in Oman and rented out a flat for a year. It seemed good until water pipes started leaking just few weeks after shifting in. The landlord did not do anything about it for months and I was forced to shift out within three months. I had to double pay rent for the next three months. I understand this may be an isolated incident but it cost me three months rent," he said.
Typically if a tenant decides to leave the rented house before the end of the contract, he/she pays around two or three month worth of rent to the landlord, the report adds.
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