At least 200,000 tenancy agreements in Manama, Bahrain alone will cease to be legally enforceable unless they are officially registered with the government within the next six months.

Under new tenancy registration procedures, which came into effect on February 7, landlords have until this summer to register existing agreements with the Works, Municipalities and Urban Planning Affairs Ministry or else face the contracts becoming legally void, said a report in the Gulf Daily News (GDN), our sister publication.

This was highlighted yesterday (March 3) during a meeting of the Bahrain Chamber of Commerce and Industry's (BCCI) real estate sector committee, which convened to discuss the impact of major changes to current law affecting residential, industrial, commercial, professional or other property leases.

"One of our main challenges is encouraging landlords to register tenancy agreements with the authorities," said committee member Nasser Ali Al Ahly.

"There are around 200,000 such contracts in the main residential areas of Manama alone."

Administrative Court president Saeed Abdulla Al Hamadi, who was also taking part in the session, said it was "imperative for everyone to have their paperwork in order" as otherwise a property owner could not take legal action against a tenant, under the new law.

"This law does not cover hotels, tourism projects, furnished buildings, agricultural plots, residential units used for commercial purpose and plots allocated for industrial use," he noted.

It was explained at the session that if no action was taken by either party, all existing lease agreements would terminate within three years and any replacement contract would have to be registered with the authorities.

Caps on rent increases have also been introduced with the new law, set at five per cent every two years for residential properties and 7pc for commercial.

Other additions include a grace period of one week for tenants to pay rent before an eviction notice can be issued, the right for tenants to claim compensation from landlords for any repairs undertaken in the property and the right for tenants to terminate a contract or demand a rent reduction if new construction begins in the property they are living in.

Committee member Mohammed Binfalah welcomed the changes, which he described as long overdue.

"For decades now we had two real estate laws - one for Manama and Muharraq and another that covered rest of Bahrain," he said.

"For example, you still have tenants in Manama paying BD70 ($184) a month for a shop or flat located in the heart of the capital, while in other areas people are paying BD700 for similar locations.

"The only challenge I see is the implementation of the law and how everyone responds to it, as there will be some issues." - TradeArabia News Service