President says rent penalties waived without burdening state finances

President Mohamed Muizzu on Sunday said the government has waived rent penalties for social housing flats to avoid placing a burden on the state.

Speaking at a meeting with residents of Hulhumalé Phase I, the president said penalties imposed for non-payment of rent by Hiyaa flat tenants for last year and this year have been waived. He said penalties amounting to more than MVR 1 million have been removed.

The Housing Ministry had earlier said unpaid rent places a strain on state finances and warned that action would be taken against tenants who fail to pay rent. However, the government has now decided to waive penalties after receiving complaints from residents.

Some residents expressed concern that forgiving rent penalties could affect the economy and limit the state’s ability to meet essential expenditure, particularly given the level of public debt.

Responding to these concerns, President Muizzu said the decisions were made after reviewing the issues raised by the public and assessing the impact on state finances.

“I do not want to take decisions that would harm the economy,” he said.

He added that the government has not granted concessions or penalty waivers in a way that would undermine plans to repay domestic and external debt.

“I want to assure the public that these measures are being implemented within existing limits and without creating future burdens,” the president said.

Penalties for non-payment of rent were also waived in 2023. According to figures previously released by Housing Development Corporation (HDC), outstanding rent for shelter flats stood at MVR 628 million as of July.

Of the Hiyaa flats managed by HDC, 3,219 units are paying rent regularly, while 5,099 units are in arrears.