BizBahrain Magazine Nov-Dec 2017

ASAR | Corporate Law Analysis
THE
DEATH OF
RENT
CONTROL
by Ghufran Fadhul
In 2014, Bahrain issued a statute
initiating the end to mandatory rent
control in Bahrain, a system which
has been in place since 1944 and had
experienced numerous amendments of
the years. The 2014 law, widely known
as the New Rents Act, eliminated the
mandatory nature of two primary
features of rent control in Bahrain:
Pricing Control and Renewal Rights.
This type of legislation is seen in
many major cities around the world,
even seeping into popular culture
through television references. Rent
control arguably plays an important
role to enhance social justice; however,
its breadth in Bahrain legislation,
particularly its application also to
merchants, rather than exclusively to
residential property, has remained a
thorn in the side of landlords. There
are reasons to believe that rent control
has increased the dilapidation of
buildings in the areas where it applies.
The impending end of rent control
in Bahrain is expected to be a time
of upheaval but also should result
in economic normalization between
longstanding businesses and new
start-ups.
How Rent Control Worked
The primary aspects of rent control
are Pricing Control - a limitation on
the quantum of rental rate increases
that property owners can charge - and
64 November-December 2017