The provisions of Law No. 50 of 1994 concerning the regulation for the use of land space and the explanatory note of the law No. 8 of 2008 explains in detail the provisions regarding the use of land in Kuwait. While analyzing the local real estate performance there is major economic development related to the activity of the real estate market and in the respective governmental regulations. However, the government has failed to keep pace with the growing needs. The facilities should commensurate with the increasing demands or else it would not be helpful for the citizens. Moreover, the laws are more relaxed which leads to delay in reclamation of land space which is allotted to address the requirements of the citizens. This in turn resulted in an increased demand for ‘Vouchers’ for building private residence. In the private sector the needs of citizens are not met due to the unreasonable delay. This also contributed to the increase in price steadily and rapidly. Though there is directive from the legislature that the land should not be kept idle for a long period of time, enabling the owners to speculate for the highest possible price the eligible middle class are suffering as the rising housing costs has already became unaffordable for them.
Understanding the above said problems the legislature in fact intervened to put an end to this problem of the ‘poor getting poorer and the rich getting richer’. However, due to the greed of some private investors and big companies the ordinary citizen lost their hope in getting a private residence or a respectable home so as to preserve his dignity and to protect his family.
In order to overcome the lacunae of law No. 50 of 1994 concerning the regulation of land-use space, the Law No. 8 of 2008 was introduced under which the imposition of an annual fee of ten dinars (KWD 10) on every square meter of housing lot of a person who owned land in excess of five thousand square meters.
This amendment was followed by the issuance of Law No. 9 of 2008 amending some provisions of the Commercial Companies Law No. 15 of 1960, which prevented all sole proprietorships from buying, selling, placing lien on, and issuing letters of assignment to third parties, and prevented Islamic banks from financing the residential housing.
However, it is to be noted that even after more than four years after the introduction of this law the aforementioned problems as still imminent in an exacerbated and intractable manner. With growing number of self seeking opportunists ordinary citizens still suffer under the hammer of the government, the greedy investors and land dealers. The main reason for the sustainability of this problem is due to the inaction and failure on the part of the government. The flow of resources and wealth in the market is managed without giving any consideration to the middle class citizens.
It is worth mentioning that law No. 8 of 2008 in its Article IV provides that the State (represented by its ‘General Organization for Housing Welfare Authority for Land Reclamation’) is required to provide one hundred thousand housing approvals within three years, but unfortunately during the past three years this has not been provided.
At this juncture we have to assess whether the application of Law No. 8 and 9 for the year 2008 has brought forth any positive results for the society as a whole. Sadly we have to confess that those laws did not achieve the purpose meant by the legislators. None of those laws could achieve the desired benefits or could put an end to the cries of the ordinary citizens
During the last many years, the Kuwait Finance House one of the largest dealers in real estate in general and residential real estate in particular, was vigorously addressing the needs of a large tier of clients looking for private housings. It is not permissible to comment on court rulings, but that does not prevent us from saying that the above mentioned dealings confirm that the legislative structure of these laws, has major loopholes as the law clearly states about the prohibition in dealing with residential houses or in private housing.
If one company is allowed to escape the clutches of law and avoid payment of the prescribed fine or to comply with the restrictions of the law then there is the chance that others will also be tempted to follow its foot steps. This will in turn affect the principle of equality and equal opportunities as prescribed in the constitution.
Additionally, it will create a suspicion of unconstitutionality of the content of the law to restrict the right of ownership. It will also lead to a confusion whether the rights against violation as per the provisions of Article 18 of the Constitution is also affected. Because the said provision confirms explicitly that private property is protected and the citizen is not prevented from disposing of his property except as per the provisions of law for the benefit of public at large. In such circumstances law sets forth provisions for fair compensation on any such loss.
A company recently secured a judgment in its favor even though there was violation of Laws No. 8 and 9 of 2008 and Law No. 30 of 2003. If the principle of equality and equal opportunities are even questioned and if the law itself cannot be enforced then only possible option is the amendment of provisions of Law No. 8 and 9 for the year 2008.