Cabinet has been updated on the status of State Land lease rental arrears for the period 2017-2022.
According to Section 21 (k) of The State Lands (Leases and Licenses) Regulation 1980, at the end of each calendar year, the Ministry of Lands and Mineral Resources charges 12 per cent interest on state lease rental accounts which are in arrears.
Further, the rental dues are clearly stipulated under Regulation 6 (2) of the Regulation 1980:
In 2017, 16,913 active leases were charged the amount of $13,690,030.30 in annual rent. As of 31 December, $14,075,078.28 was received.
The highest revenue recorded to date was in 2019 whereby the Ministry received $16,950,546.18 from the rent and arrears.
This is out of the 18,273 active lessees who were charged with $14,679,785.22.
From 2020 to 2022, the number of active leases increased from 18,675 to 19,859 resulting in the increase of annual rental from $15,174,039.99 to $16,228,479.76.
The increase in annual rent came about due to the issuance of new leases and rezoning of leases on State lands.
Rezoning to higher uses normally increases rental charges. Another factor is the increase in subdivisions, which cause numerous leases to be issued over subdivided lots.
As of 31 July 2022, rental arrears were $38,852,867.00. This figure is inclusive of the annual rent for the current year, which is $15,420,572.00.
The reasons for rental arrears given by tenants include financial constraints, pending estate matters, existing legal cases and absentee lessees.
Issues and challenges identified by a review of the project include onerous manual processes, absence of up to date and relevant laws, lack of data sharing, penalties being too lenient, and an outdated Land Information System at the Ministry.
Meanwhile the Ministry is developing relevant internal policy measures developing other payment modes such as EFTPOS and MPAISA and strengthening government processes in the collection of arrears owed to State, and looking at reviewing the outdated Land Information System.