Fahi Union: Flat agreements contain legally risky terms

Fahi Union, on Sunday, has alleged that the agreements executed for the 4,000 flats developed by Fahi Dhiriulhun Corporation (FDC) under the former administration’s ‘Gedhoruveriya’ housing scheme contain legally risky terms.

Speaking at a Fahi Union press conference on Sunday morning, lawyer Ali Hussain stated that, until now, the government has never executed rental agreements for flats awarded under any of its social housing schemes.

On the contrary, he said a rental agreement has been signed with the recipients of the 4,000 flats, stating that they will only gain ownership of the units after paying rent for a period of 25 years.

Ali Hussain further emphasized that such an agreement could serve as a stepping stone for the current administration to shift policy regarding future social housing schemes.

“However, this cannot be done with respect to the existing flats. This is what the president has pledged as well,” he added.

Fahi Union expressed concern over some of the risky terms in the agreement.

In this regard, Ali Hussain referred to Article 18 of the agreement which empowers FDC to repossess the flat after giving notice if the tenant fails to pay rent for any reason. The other term highlighted by Fahi Union is Article which empowers FDC to sell the flat to a third party for failing to pay rent.

“The true intent of including these terms in the agreement isn’t to give citizens flat. This is evident from the government’s decision to execute a rental agreement,” Ali Hussain said.

Ali Hussain alleged that President Dr. Mohamed Muizzu might not possibly aware of this.

Citing an agreement was drawn up for the flat recipients during the former administration, he urged the government to revert back to FDC’s original agreement.

Fahi Union also expressed concern over security deposit and increased rent for the flats.

The MDP administration had announced that the monthly rent for two-bedroom flats would be MVR 6,000, and the rent for three-bedroom flats would be MVR 8,000, including a monthly maintenance fee of MVR 1,000.

But the incumbent administration has decided to charge a higher monthly rent of MVR 7,000 for two-bedroom flats and MVR 9,000 for three-bedroom flats. Tenants are required to additionally pay a security deposit of MVR 15,000 and a monthly maintenance fee of MVR 1,000 for two-bedroom apartments, and a security deposit of MVR 25,000 and a monthly maintenance fee of MVR 1,500 for three-bedroom apartments.

As such, Fahi Union has called for the following changes:

• Amending the nature of the agreement
• Amending from a rental agreement to a sale agreement
• Revoking security deposit and install payment as stipulated in the original agreement
• Handing over flats to all rightful recipients without any further delays

Former president Ibrahim Mohamed Solih, on Saturday, criticized the incumbent administration’s decision to raise the rent – pledging if MDP is re-elected to office, it will slash the rent.

The list of recipients of the flats, which was released during the last days of the MDP administration, was the subject of an investigation by the Anti-Corruption Commission (ACC). The corruption watchdog ordered for the suspension of the issuance of flats, before finally giving the Housing Ministry the go-ahead to proceed in February 2024.

The incumbent administration released a new list of recipients after a verification process that lasted a year in February in which only 1,820 applicants were declared eligible. The administration commenced executing agreements with the recipients last Monday.