Brokers create financial burden for tenants

The active presence of brokers in the Rawalpindi and Islamabad rental markets has mutually benefited proprietors and brokers; it actually has created an economic burden on the potential tenants.

“Rental housing is largely due to the large concentration of migrant populations in these cities. It enables migrants to shift places with changing job locations, locate proximity to worksites,” says Tahir Hussain.

“Rawalpindi and Islamabad are those cities that have a higher percentage of households residing in rental accommodation. Low-cost rental housing is not available in main urban centres but in unauthorised colonies and slums only,” says Baqir Ali.

“It is interesting to explore the functioning of the low-end rental housing markets in the twin cities. The monthly rental values in this particular segment range from R9,000-Rs10,000, and provides rental accommodation to low-income labourers with shared toilets,” says Ghazi Raza.

“The majority of low-income households reside in rental accommodation with the formalization of the rental agreement. This has led to the emergence of the broker class, which not only bridges the communication gap between landlords and tenants but also acts as proxy owners in the presence/absence of landlords,” says Farman Ali.

“Formerly, property owners would rent out their property directly to tenants, nowadays they prefer to avail a broker’s assistance to find potential tenants and mediate the rent setting process. Every few meters within every area, there is an office of property dealers who deal in rentals,” says Khurram Abbas.

“Apart from the property dealers, there are other individuals such as owners of grocery stores and eateries, security guards also working as part-time brokers,” adds Khurram.

“The broker normally charges one month’s rent as brokerage from the tenants. Their key role is to keep the vacancy information available for rent inside different localities,” says Dabeer Haider.

“Once a room becomes vacant, landlords inform a few local brokers to find suitable tenants. Then the information of vacant houses to be rented is disseminated among local brokers through word of mouth. Brokers who can bring tenants who will be staying for a longer duration and have a stable source of income, first clinch the deal,” says Qasim Hasan.

“Some of the brokers also have close ties with the landowners; they take up the entire responsibility of replacing tenants when someone leaves the room. However, this is more prevalent in the case of absentee property owners. Apart from bringing in new tenants, brokers also take care of the property in some cases,” says Asad Haider.

If a tenant creates any trouble after renting a house, for example, if they fight with each other, do not pay rent on time, refuse to vacate the room despite termination of the rental contract, or run away without paying rent, then it becomes the broker’s responsibility to handle these,” says Adeem Hussain.

“I preferred to rent properties in some areas, because of the relatively lower rental costs, but the involvement of brokers has now increased the amount of one-time investment such as security deposit, one-month rent, and brokerage, required to get a property,” says Gayyur Abbas.

“This also indirectly prevents tenants from frequently changing rooms in the rental market, because every time they are required to pay the brokerage fee,” adds Gayyur.Abdullah Ali says, “While renting out properties, brokers strike attractive deals with landlords due to competition among the brokers. Resultantly, it inflates the rental value.”