CARACAS—Venezuelan President Hugo Chávez signed a new rental law into effect over the weekend that obliges landlords to sell their property to tenants of more than 20 years at state-mandated discounts based on how long the space has been rented.
Mr. Chávez hailed the law as a way of opening housing to the country's poor and extending tenants' rights, but critics see the law as a political ploy to compensate for a struggling state home-building initiative.
Under the law, the state will create a fund to provide loans to tenants interested in buying rented real estate, while landlords, who will have to register all their holdings, face heavy fines for violating the regulations and the possibility of having their property expropriated by the government for repeat offenses.
Owners also are forbidden from requesting security deposits from tenants.
"There are urban landlords who own 15, 20 buildings and exploit the people," Mr. Chávez said during the signing ceremony for the law. "Many times they leave the country; they don't even live here, nobody knows them."
Housing is set to be a major issue in next year's presidential elections, and Venezuela's top real-estate association says Mr. Chávez is using the law to provide constituents with housing that his government promised but is struggling to deliver.
"They are completely violating the concept of private property with this law," said Aquiles Martini, president of the Venezuela Real Estate Chamber.
"The government has a target for construction in its housing mission, but there's no way they are going to be able to do it so they are using laws like these to meet the deficit," he added.
In February, Mr. Chávez pledged his government would build two million homes for the poor over the next seven years as part of his "Grand Housing Mission Venezuela" project. The government, which set a target of 153,000 homes for 2011, says it has so far this year overseen the construction of 85,000.
wsj.com
Mr. Chávez hailed the law as a way of opening housing to the country's poor and extending tenants' rights, but critics see the law as a political ploy to compensate for a struggling state home-building initiative.
Under the law, the state will create a fund to provide loans to tenants interested in buying rented real estate, while landlords, who will have to register all their holdings, face heavy fines for violating the regulations and the possibility of having their property expropriated by the government for repeat offenses.
Owners also are forbidden from requesting security deposits from tenants.
"There are urban landlords who own 15, 20 buildings and exploit the people," Mr. Chávez said during the signing ceremony for the law. "Many times they leave the country; they don't even live here, nobody knows them."
Housing is set to be a major issue in next year's presidential elections, and Venezuela's top real-estate association says Mr. Chávez is using the law to provide constituents with housing that his government promised but is struggling to deliver.
"They are completely violating the concept of private property with this law," said Aquiles Martini, president of the Venezuela Real Estate Chamber.
"The government has a target for construction in its housing mission, but there's no way they are going to be able to do it so they are using laws like these to meet the deficit," he added.
In February, Mr. Chávez pledged his government would build two million homes for the poor over the next seven years as part of his "Grand Housing Mission Venezuela" project. The government, which set a target of 153,000 homes for 2011, says it has so far this year overseen the construction of 85,000.
wsj.com
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