TANZANIA, Dar es Salaam: NATIONAL Housing Corporation (NHC) has warned to publicise names of its rent defaulters and submit them to the Credit Information Bureau for blacklisting not to qualify for loans in the various financial institutions.
Such move is in response to ensure NHC recovers a whopping 23.8bn/- as debt from its residential tenants, government institutions, commercial tenants and partners.
NHC Director General (DG), Mr Hamad Abdallah disclosed this in Dar es Salaam on Thursday at a meeting with editors from different media houses.
“Collection of rent in the previous financial year of 2022/2023 was averaged by 101 per cent, comprising outstanding rents which is a major challenge facing NHC,” said Mr Hamad.
He indicated that a large chunk of outstanding rents was in the area of commercial buildings generating around 20.2bn/- of the dues, while residential debts accounted for only 3.5bn/-.
Elaborating, he explained that 38 per cent of outstanding rents are in the hands of individuals, private entities (36 per cent), public institutions (14 per cent) and partners (12 per cent).
Mr Hamad observed that formerly public institutions were leading among the list of defaulters, but over the years that has changed as there is very high discipline among the institutions in paying their rents.
In the previous financial year, he highlighted that NHC was owed 28bn/- and managed to collect around 5bn/- as arrears during its rigorous campaign.
Outlining measures they aim to ensure all debts are cleared, they singled out the signing of contracts with tenants requiring them to pay their current rents and a section of their previous dues for them not to be affected.
In case of noncompliance, NHC will be forced to terminate all the contracts which have been entered between them and their tenants, as well as take legal measures to recover the debts.
As for chronic defaulters, the corporation aims to publicise their names in the various media outlets for the public to be notified.
The DG indicated that NHC has entered into an agreement with a company known as Credit Information Bureau, stressing that the implication behind this is that the names will be blacklisted by financial institutions and in turn lose their rights to access loans.
He further said that before the financial institutions dish out loans to their customers, they should usually conduct a due-diligence on them.
He revealed that the mechanism was being employed globally citing the case of the US where a person who is applying for a loan has to go through a thorough scrutiny.
“You might end up incurring major consequences by not paying NHC debts…it’s critical that the defaulters come to seek a way out,” maintains the NHC Boss.
To overcome the problem from getting out of hand, he said NHC was emphasising on a new tenant paying-the so-called security deposit besides the ordinary rent.
He noted that the mechanism has been inexistent, but there was laxity in making follow ups, adding that the entity currently acquires a new system that has a lot of controls.
“A tenant shall not be allowed in the house before paying the security deposit,” stressed the DG, while clarifying that the deposit is in form of cash and is equivalent to a three months’ rent down payment,” he pointed out.
Stressing on why it was a critical requirement, he said the money will be returned upon finalisation of the contract in the case of no default(s) and house damages.
However, in case of a one-month default, NHC will consider that the tenant has failed to pay their rents.
Thus, the security deposit will cover the one month rent and he/she will be supplied with a 30-day notice through a registered court broker, all will be accounted for.
Mr Hamad said as per the requirement, the broker shall be given 14 days and on reaching the 75th day, the tenant will be moved out of the house and the remaining days will be used to carry out renovations for a new tenant.
“The entire circle makes up a solid 90 days and the reason is we are demanding a security deposit of three months’ rent,” noted the DG.
Expounding further, he said tenants who have no security deposits have been given up to December to finalize the payments in piecemeal format.
