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Expatriate Forums in Botswana -> Botswana Housing, Real Estate & Relocation in Botswana -> HOUSING IN BOTSWANA / BOTSWANA HOUSING GUIDE
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PostPosted: Mon Feb 26, 2007 7:29 am    Post subject: HOUSING IN BOTSWANA / BOTSWANA HOUSING GUIDE Reply with quote

HOUSING IN BOTSWANA

Botswana is a small landlocked state, covered largely by desert, savannas, wetlands, and salt pans. It is home to a wide variety of wildlife and has attracted adventure-seekers from around the world.

The tightly controlled tourism industry is developing into the country’s second most important after mining.

Botswana has been Africa’s longest running multi-party democracy since indepedence from Britain in 1966, and stability continues to the present. Botswana's population of 1.6 million is concentrated mainly on the eastern corridor, where the land is more suitable for agriculture.

Slowing diamond sales have badly hit the economy, which grew only 3.8% in 2005, compared to 7.6% in 2000. This hit residential property prices and rents, which began to fall in the first half of 2004, after five years of sustained growth. However traffic congestion is worsening, so city centre capital values are still rising.

Property prices are around BWP5,370 (US$885) to BWP6,675 (US$1,100) per sq. m. in the capital Gaborone. Foreigners are not allowed to own property freehold. Nonetheless, they can obtain leases for 55 years or more.

The law in Botswana is pro-landlord, but the force of the law is weakened by slow enforcement in the courts.

Rental Market

The rental market in Botswana is a free market. Landlord and tenant are free to agree the rent; rent control only applies to commercial properties in urban areas. The parties may also freely agree a mechanism for increasing the rent during the tenancy term.

Provision for rent to be increased during the lease may be made in the lease agreement. For instance, the parties may specify that after a period of time the rent will increase to a certain amount, or to an amount to be agreed at a future time. The parties may also make provision in the Lease agreement for an escalation clause by which at the end of each year, the rental will increase at a certain percentage. For instance in a 5 year lease, the parties can agree that the Lessee shall pay an amount for each month of every subsequent year (each subsequent year commencing on the anniversary date of the Commencement Date of the Lease Period) which is 10% greater than the amount of the rent for the last month of the preceding year.

There is no legal maximum deposit. Requiring a deposit is normal practice.

Rental Contract

As far as duration is concerned, leases fall into three main categories:

1. Fixed period leases. Provided that neither party is in default, a fixed period lease automatically terminates at the end of that period, and no notice of termination is required.

2. Leases terminating at will. These leases terminate at the will of the lessor, or of the lessee, or of either party. These normally provide for a notice period. If the lease agreement provides for termination on notice at the will of either party or in the event of default, it should provide for the steps to be taken.

3. Indefinited leases. These leases have no fixed terminal point and run from period to period, until brought to an end by notice. An indefinite lease is terminable by either party giving the other notice of termination. If the parties leave the period of the lease undefined, the law requires reasonable notice to be given by the one to the other. What constitutes reasonable notice is not laid down but depends on the circumstances of each case. Upon the expiration of the notice period, the lease terminates.

In the event the lease agreement does not provide for termination at all, the parties are bound to continue and the aggrieved party may proceed to sue for cancellation of the Lease agreement and damages as a result of breach.

Like any other contract, a lease may be terminated by mutual agreement, be it oral or in writing, or implied from the conduct of the parties.

Rent Arrears

Although the landlord’s rights are strong, the law can be slow. Whenever and so long as rent is due and payable and has not been paid, the landlord has a residual hypothec over the movable goods of the lessee on the leased premises. The effect of the hypothec is that, with the confirmation of the High Court, the Landlord can attach the property of the Lessee in security for payment of rental and arrears.

To perfect the Landlord’s hypothec, the Lessor makes an application to the High Court for an order to attach the property pending an action to be taken by him for rental arrears and damages and for cancellation if the lease does not provide for cancellation under those circumstances. Confirmation of the hypothec can take anything from one to two months.

Soon after the Landlord’s hypothec is confirmed, the Lessor will issue summons for recovery of rental arrears and damages. The summons may be unopposed or opposed by the Lessee.

It takes approximately two weeks to register the summons at Court, then a waiting period of 10 to 21 days for the Lessee to defend the action.

Where the action is unopposed, the Lessor is entitled to apply for a judgment in default of appearance. Waiting period for the judgment to be issues from the High Court is 3 to 4 months. After obtaining the judgment, and the rent remains unpaid, the Lessor can sell the attached property within a month.

Where the action opposed, it takes approximately 3 months to close pleadings, and thereafter the parties wait for the Court to appoint a trial date, which can be anything from 2 to 3 years.
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