Rent Control and Administration Proclamation No. 1320/2024 establishes a Rent Control and Administration framework for residential houses in Ethiopian urban centers (including Addis Ababa and Dire Dawa). Below is a concise summary of the law:
- Key words:
Residential House, Rent Control, Rent Administration, registered rent, Baseline rent price, Annual rent adjustment, Contract renewal, Freely negotiated rent (initially), Newly constructed houses, First-time rental contracts, Advance payment limit, Tax on vacant houses, Additional tax for long-term vacancy
- Purpose:
• To Control rent increases
• To Ensure fair pricing and transparency
• To Encourage housing supply
• To Prevent speculation and vacancy
- Scope & Applicability
• Applies to residential rent contracts in cities accountable to regions, plus Addis Ababa & Dire Dawa.
• Excludes hotels, resorts, guesthouses, and commercial-licensed rentals.
- Written Contracts & Registration
• All rental contracts must be written, authenticated, and registered with the designated Regulatory Body within 30 days of signing.
• Unregistered contracts have no legal effect. Penalties (up to 3 months’ rent) for non-compliance.
- Contract Renewal
• Contracts can be renewed by agreement in writing.
• Rent increase during renewal Cannot exceed the official cap.
- Minimum Term and Rent Price Control
• Minimum rental term is 2 years (unless shorter term existed before this law).
• Rent increase is permitted only once per year based on economic conditions, determined by the Regulatory Body.
• Landlords must notify tenants and the authority in writing when increasing rent.
• Annual rent price adjustment will be announced on June 1 (effective June 30 to following June 30).
• Rent for newly built or first-time rentals is freely agreed between landlord and tenant
• Baseline rent for new tenants or renewed contracts shall be rent from prior registered contract + allowed annual increase.
• Advance payment shall not exceed 2 months’ rent.
• Rent must be paid via bank or legal electronic system only. Receipts must be kept.
- Vacant or Previously Rented Houses Penalty
• If a previously rented or newly completed house is left vacant for more than 6 months, owner pays tax on imputed rental income
- . Incentives for Landlords
• New constructions: 4 years exemption from rent caps.
• First-time rental of existing houses: 2 years exemption from rent caps.
- Termination of Rental contract
• Contracts can be terminated by mutual agreement, tenant’s 2-month notice, or owner’s 6-month notice upon ownership transfer (except donation – tenant can stay until term ends).
• Owner can terminate without notice for non-payment (15 days late → 1st time; 7 days → 2nd time), illegal use, disturbance, property damage, etc.
- Regulatory Bodies
• Ministry of Urban & Infrastructure: oversight, coordination, research.
• Regional Regulatory Bodies: registration, model contract, directive issuance, complaint handling, penalties.
- Disputes & Appeals
• Complaints to Regulatory Body → decision within 30 days.
• Appeal to Grievance Hearing Committee (within 15 days) → final administrative decision.
• Further appeal to court → final decision within 30 days.
- Effective Date – May 9, 2024
Leave a Reply
You must be logged in to post a comment.