Enab Baladi – Besan Khalaf
“My properties are valued at millions of dollars, but the tenant pays between four to eight dollars annually.” With these words, Marwa al-Mohammad expressed to Enab Baladi her feelings of injustice due to the meager rent she receives from her grandfather’s six commercial shops in Aleppo, dating back to the 1980s, under old contracts.
Al-Mohammad inherited the properties from her grandfather, along with an “unfair” lease agreement, as she describes it, which does not fairly represent the landlord and gives the tenant the right to manage the property, such as renting it out. The lease is automatically renewed according to Decree “111,” which was instituted in 1952.
Unfair
“The old rental law is unfair to landlords; the tenant can rent the property at whatever price he wants, while the landlord is not allowed to raise the rent without a legal lawsuit, which can sometimes be rejected,” al-Mohammad said.
Even if al-Mohammad wants to sell her commercial shops, she must pay 40% of the price of each property to the tenant.
Al-Mohammad can only raise the annual rent through what is known as a “valuation lawsuit,” which takes three to four years. This allows the property owner to raise the rent corresponding to the increase in property prices. Additionally, the tenant has the right to file a lawsuit to reduce the rent.
In a valuation lawsuit, the rental value is estimated by experts appointed by the court for this purpose. A legal expert then assesses the increase according to price increases, type of use (residential, commercial), and the geographic location of the property, capped at 10% of the rental value.
Since 2011, al-Mohammad has filed three valuation lawsuits to raise the rents of her commercial shops, but to no avail, due to the overcrowding of the courts with valuation lawsuits.
Tenants have another opinion
Ahmad Nawalati inherited the craft of making copper utensils from his father, who rented a commercial shop in Old Damascus in the 1970s. He believes he has built his reputation and business name in this shop, and if the original owner sells the property, he will lose many years of hard work.
Nawalati thinks that even if the owner gives him the 40% compensation from the property sale, it does not equal his effort and work in the shop.
He pays nine dollars annually to the property owner, and he stated, “The old rental contract does not serve the landlord, but the tenant also bears the maintenance costs and taxes on the property.”
What are old rental contracts?
Rental relationships in Syria have been governed by Legislative Decree No. “111” since 1952. This decree made rental relationships subject to automatic renewal provisions and determined the rental price, interfering with the freedom of contract. It has caused many issues between the contracting parties, depriving the landlord of the right to manage his property.
Legislative Decree “111” has generated numerous valuation lawsuits which landlords are forced to resort to in order to raise rents consistent with property price increases. Furthermore, it grants the tenant the right to also file a valuation lawsuit to reduce the rent, leading to an overwhelming number of these cases in the courts.
With the evolution of laws related to rentals in Syrian law, some consider Decree “111” to be a violation of Article “148,” which states, “Contracts shall have the force of law for those who have entered into them; they may not be revoked or altered except by mutual consent of the parties or for reasons provided by law.”
Enab Baladi attempted to contact the Syrian Ministry of Justice to inquire about the intention to issue a new law that would serve both landlords and tenants, but received no response by the time of writing this report.
No violation in rental law
Lawyer Munib al-Yousfi told Enab Baladi that Decree No. “111” was “an extension of the conscience of the state at that time,” as it granted the tenant the right to remain in his dwelling. He explained that Decree “111” does not violate the principle of “contracts shall have the force of law” stated in Article “148,” as there is a subsequent clause indicating that “if the contractual terms contradict public order or morals, they shall be void even if agreed upon by both parties.”
Al-Yousfi added that public order essentially includes protecting the minimum basic rights, including the right to professional and residential stability, and not leaving the individual prey to the market law alone. Lease agreements under automatic renewal, which were rented under old laws, continued by the force of law and not by the will of the landlord.
As for modern contracts established according to the principle of “contracts shall have the force of law,” they are a legislative achievement that restored confidence in rental real estate investment. “We encourage and support it, but it should not have retroactive effects on contracts that have their historical, social, and legal specificity,” according to al-Yousfi.
He pointed out that a valuation lawsuit is a necessary tool to adjust rent according to technical bases that consider the location, condition, and overall economic situation—not just in the interest of the landlord or the tenant alone, but as a rough balance of justice.
Decree “111” is inappropriate for the current stage
Lawyer Nadine Ghazi believes that Legislative Decree “111” served a social purpose in its time, but has now become an obstacle to justice and contractual freedom. It needs either modification or radical change to ensure balance between the two parties, contractual freedom, and the protection of specialized courts. In light of developing legislation, such exceptional laws have become a burden on the real estate market, and it is preferable to replace this kind of legislation with an organized free contractual system that balances tenant protection and landlord rights.
Ghazi stated during her conversation with Enab Baladi that the decree allowed certain actions by the tenant, such as sub-letting or transferring the lease without the owner’s consent, which represents a constraint on the principle of “contracts shall have the force of law.” She added that it has placed significant burdens on the courts with valuation lawsuits and created imbalanced conditions between the rights of tenants and landlords, as sometimes the tenant enjoys greater powers than the owner himself without contractual justification. Thus, the decree has constrained the aforementioned principle under the pretext of protecting a socially weaker group.
Ghazi pointed out that a tenant should not be able to manage the property, such as renting and selling, or transferring it without the owner’s consent unless the lease contract expressly permits such actions. There have been instances where tenants exceeded the terms of the contract by renting the property to others without the owner’s permission or transferring the right to benefit for a fee, which constitutes a clear legal violation. The owner has the right to demand the termination of the contract or reclaim the property, but exceptional laws complicate and prolong proving this behavior and reclaiming rights, according to Ghazi.
Demands for new legislation to end injustice of Law 111 for old rentals Enab Baladi.
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