The Effects of Residential Lease Legislation and Its Judicial Practice on Investments in Rental Housing

The investor in rental housing seeks to generate returns on invested capital through rent while safeguarding the building as property. This investor fears for capital transformed into real estate assets placed in a tenant's hands, placing hopes in lease legislation to guarantee these assets and in courts to protect them whenever threatened. Thus emerges a purely economic relationship between lease legislation and its jurisprudence on one hand, and investment in rental housing on the other. This relationship can be either favorable or unfavorable to investment depending on legal guarantees and judicial practice. Good lease legislation combined with effective judicial practice stimulates investment. Good legislation poorly applied, or judicial practice paralyzed by inadequate legislation, dissuades rental sector investments. Two possible effects emerge: stimulating or dissuasive.