The government’s failure to manage some of its housing units in Nyabugogo bus terminus has created avenue for rogue tenants to sublet rooms to third parties, Rwanda Today has learnt.

Officials from the Office of the Ombudsman blamed the district for failing to cracking down on the tenants, who do not declare rent proceeds they get from the rooms they have sublet for taxation. At least 92 rooms in flats owned by Nyarugenge District are at the centre of the allegations.

According to Jacques Fiscal Birasa, an investigator in the Anti-Corruption Department at the Ombudsman’s Office, the district has been unable to apprehend errant tenants.

“If a tenant can earn Rwf500,000 beyond the actual rent, did the tenant pay taxes on the earnings?” Mr Birasa posed. “That was the problem, and it looked like embezzlement.

“We raised the matter in our report and the district immediately cancelled the agreements, which led to court battles between the district, tenants and the sub-tenants contesting the decision,” Mr Birasa added.

According to 2013-2014 Ombudsman’s report, tenants were expected to pay a monthly rent of Rwf300,000 for houses on ground floor and Rwf200,000 for the other floors.

“However, the tenants entered into agreements with other sub-contracted tenants illegally and started charging them as high as Rwf500,000 to Rwf1 million without paying taxes on the extra amount,” the report states.

Cancelled leases

Rwanda Today has learnt that at least 20 tenants were affected by the cancellation of the lease agreements and resolved to sue the district.

Acknowledging the fraud, district officials decried difficulties in supervision, which forced them to cancel the agreements. The case is before the Commercial Court in Nyarugenge.

Efforts to get more details from the officials proved futile although Mayor Solange Mukansonga said the district was aware of the problem.

Sources at the district offices who declined to be named the district’s council meeting had resolved to cancel lease agreements with the affected tenants.

“What happens in Nyabugogo may as well be happening somewhere else, because tenants partition houses to provide more space for willing sub tenants,” the source said. “There is a need for serious investigations,” he added.

10-year lease

Although the Ombudsman has not announced the amount of money lost as a result of the scheme, Rwanda Today has learnt that the illegal deals with the contracted tenants, who have signed a 10-year lease, have been going on for the past five years.

Mr Birasa added that the Ombudsman submitted the claim to the national prosecution office for action.

“Meanwhile, we have advised the district to consider market prices to avoid inflation of rent,” Mr Birasa said.

“They told us that the council had been working on the issue and was yet to give its verdict,” he added.