From April 2017, Mandalay city authorities will begin enforcing a long-ignored by-law which requires landlords to obtain a licence.

According to Section 76 of Mandalay City Development Committee (MCDC) Law, a business licence must be obtained in order to operate a boarding house, guesthouse or to rent out apartments. The licence fee for landlords will be set at 5 per cent of the rental fee, and will be paid yearly, said Daw Win Min Than, a section head from the Cleansing Department. Landlords will need to provide the original lease agreement and a copy made between the owner and tenant.

According to Colliers International, the licence system is unlikely to deter landlords. “While the rental market in Mandalay has significantly improved compared to the previous years, though it is still far behind the current rental market in Yangon,” said analyst Joshua De Las Alas. “The rental market in Yangon is mainly fuelled by the urban migration and expatriates employed by the sheer number of offices and other businesses that are being set up in the city. However, the office market in Mandalay is still at a nascent stage, with a large volume of the workforce still preferring Yangon. Nonetheless, with Mandalay one of the main educational hubs in central and northern Myanmar, the residential rental demand from students in the area is still significant. The proper implementation of the licensing system would not discourage landlords given that the city’s rental market could be very similar to Yangon in the long run.”

Yangon City Development Committee has said it has no plans to follow its Mandalay counterpart.  De Las Alas is unsure whether other cities will follow suit. “The taxes collected from the landlord licensing definitely gives extra income for the city government to improve on other areas of the city,” he says. “However, this practice is not the norm in neighbouring countries and it is highly unlikely that other cities in Myanmar will adopt this system given that Yangon itself has no plans to apply the same scheme.”

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