Gedhoruveriya flats offered under 25-Year Rent-to-Own scheme

Minister of Construction, Housing and Infrastructure Dr Abdulla Muththalib has said that the 4000 flats being issued under Gedhoruveriya housing scheme will be issued under a 25 year Rent-to-Own scheme.

With this, recipients of the flats stand to gain ownership of the flats after completing payment of the rent or installments for this period.

Speaking on the 'Ahaashey Bunaanan' programme on State radio Dhivehi Raajjeyge Adu, the Minister said that the move was prompted by difficulties in securing rental payments for state-issued flats.

"Hence, if the places are issued as rentals, it will be easier for the government to take necessary actions when required," Muththalib said.

The minister said that the ratification of the Housing Bill, which is currently pending in parliament, will bring a resolution to the issues faced in collecting rent from State-issued housing. He said that the bill will allow for rent to be obtained without the need to take the matter to court.

"The second thing is bringing a change to how the flats are being issued now. One way would be to give it to them as mortgage under bank mortgage financing with concessions. The other is to set a specific period in which rent has to be paid, and to register the flats in their names when this period expires," the Minister said.

Muththalib said that the Gedhoruveriya flats will be issued in this way, under a Rent-to-Own scheme.

Outstanding rent from social housing has reached MVR 700 million, according to current figures. Housing Development Corporation has this month sent notice to those who default on rent payments, and set up a system to monitor this.

Muththalib went on to say that defaulting on rent on State issued housing poses far more serious ramifications than just reducing State revenues.

He said that housing projects are run on the grounds that they are feasible. While the loans have to be repaid through an escrow account, the banks also are aware when rent is not paid.

"So when rent is not paid, the banks are also aware of this. This poses huge challenges when the government seeks to take further loans. In reality, unpaid rents don't just cause loss to State revenue, but also take away the chances of many other people receiving housing through government projects," Muththalib explained.

HDC oversees 8,511 housing units in Hulhumale'. Of these, only 3,219 flats pay rent consistently. 5,099 flats do not pay rent.