Hun Sen, Sam Rainsy Developing New Rent Control Law

Prime Minister Hun Sen and opposition leader Sam Rainsy said on Tuesday that they are working together to create a new law that will limit the ability of landlords to increase rental fees from one contract period to the next.

Rental rates have been a particular source of frustration for garment workers who have moved to work in Phnom Penh, with each of the three minimum wage increases introduced since 2013 met with sizable rent hikes.

Speaking to more than 4,000 graduating university students on Phnom Penh’s Koh Pich island on Tuesday, Mr. Hun Sen said he and Mr. Rainsy were cooperating to introduce new rules they say would prevent this from happening.

“We will need to make one law that protects both sides,” the prime minister said, adding that the current rental market brings undue harm upon both tenants and landlords due to the sparse use of contracts.

“The landlords just increase prices arbitrarily due to verbal contracts: The price for the room is this amount and they don’t have a problem with the number of people living together. But then, when they hear workers’ wages are being raised, they immediately increase the price,” he said.

“The other issue is that sometimes workers stay in a house [and] while they are living in their room, they look to rent another cheaper house. Then they leave their old house to live in the other house, and the landlord has no tenant,” he added.

“The leaders of the two political parties, meaning those inside and outside the government, will create a working group to begin writing this law,” Mr. Hun Sen said. “Before that law comes out, I appeal to landlords to not increase their prices so that workers keep more money.”

Mr. Rainsy said by telephone that rent-control laws exist “even in the most liberal countries” and that he hoped such a law in Cambodia would promote the use of long-term rental contracts that protect both landlords and tenants.

“It is a joint initiative of the two parties to make a law to address the broad issue of relations of landlords and tenants, because we want the relations to be clear, transparent and based on equality. We don’t want landlords to raise rents or change rental contracts as they please,” Mr. Rainsy said.

“In many countries, you can only increase rents in line with inflation—you cannot just increase rents as you please. This law will fix increases from one period to another period, and in that period, landlords will only be allowed to raise rents by a certain proportion,” he said.

“The proportion will reflect inflation, or other measures clearly defined that reflect economic conditions and indicate purchasing power. If the landlords increase rents by more than is allowed legally, the tenants can lodge a complaint and the courts will sanction the landlord,” he added.

Mr. Rainsy said he envisioned the rent-control law applying equally to all residences in Cambodia—from $30 and $40 rented rooms to $1,000 rented villas.

“In principle, the new law should cover all types of lodgings, because you cannot have double standards. The same guidelines will apply for all rents,” Mr. Rainsy said, dismissing the possibility that price controls could reduce housing supply.

“Rents will not be artificially low,” he said. “There can be possible revisions. Suppose there are improvements—the landlord improves the house or flat—then the rent can be increased accordingly. We don’t want to distort markets, but what we want to do is to prevent abuse.”

Ath Thorn, a prominent garment-worker union leader, said he supported the proposed rent-control law and that it was refreshing to see political parties competing for support.

“We have no doubt what they are doing is political,” Mr. Thorn said. “But we want to see the parties competing for the interest of the workers. That is what we want.”

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