The National Coronavirus Headquarters has extended last year’s (March 2020-21) tenancy rules, based on which landlords’ ability to forfeit a lease will remain suspended amid the Covid-19 pandemic, says Minister of Roads and Urban Development Mohammad Eslami.
“The mandatory extension of lease contracts shall remain in force for another year [until March 2022]. The cap on rental payment increase remains unchanged at 25% in Tehran, 20% in large cities with a population of over one million, namely Mashhad, Isfahan, Tabriz, Ahvaz, Qom, Shiraz and Karaj, and 15% in other Iranian cities,” he said.
“Exceptions to the mandatory extension of lease agreements regulated by the government during the pandemic will be the same as last year,” he was quoted as saying by IRIB News.
Deputy Minister of Roads and Urban Development Parvaneh Aslani earlier clarified on exceptions to the mandatory extension of lease agreements during the Covid-19 pandemic.
“The termination of tenancy can be enforced if the landlord has secured a demolition and construction permit for their property, or if the tenant has rent arrears from before the extension of the lease and has failed to pay the rent one month after the extension of the new lease agreement,” she was quoted as saying by IRNA.
“Landlords won’t be subject to mandatory extension if they prove that they need their properties for the use of their sons, or if the tenant does not agree with the government-mandated rise in rents.”
Tenants who have caused financial losses for the landlords or have failed to deliver on their commitments won’t be entitled to the extension of the rental period either.
Security Deposit Loans
Eslami noted that renters who have failed to take out security deposit loans have until Sept. 22 to apply.
“The value of security deposit loans has seen a slight rise compared with last year. The interest-only security deposit loans worth 700 million rials [$2,966] in Tehran, 400 million rials [$1,694] in large cities with a population of over one million namely Mashhad, Isfahan, Karaj, Shiraz, Tabriz, Qom, Ahvaz and Kermanshah, and 250 million rials [$1,059] in other Iranian cities will be paid to tenants,” he added.
The deadline to register residential properties on National Property and Housing website—http://amlak.mrud.ir was extended from June 9 to Sept. 22.
In the Iranian year ending March 2016, the Ministry of Roads and Urban Development was tasked with designing, in cooperation with a number of other affiliated organizations and entities inside and outside the administration, a database containing information on all residential units and homeowners across the country and delivering it to the tax administration.
In April, the ministry called on all heads of the households, whether homeowner or renter, to register their properties online within two months. Because of the people’s lukewarm response, the ministry has revised up the due date.
Security deposit loans worth 46 trillion rials ($191 million) were paid to households in the last fiscal year (March 2020-21).
Security deposit loans worth 500 million rials ($2,083) in Tehran, 300 million rials ($1,250) in large cities with a population of over one million, namely Mashhad, Isfahan, Karaj, Shiraz, Tabriz, Qom, Ahvaz and Kermanshah, and 150 million rials ($625) in other Iranian cities were paid to 120,000 tenants at a lending rate of 12%.
Renters of homes with an area smaller than 75 square meters in Tehran and 90 square meters in other cities will qualify for this type of funding. Those who married in the current year, breadwinning women, those who do not have a property in their name (since the year ending March 2006 and households with five members as well as those supported by charitable organizations (Imam Khomeini Relief Committee and State Welfare Organization) are the specific target groups of security deposit assistance loans. Single persons and the self-employed won’t receive such loans.
An official contract with the so-called valid tracking code needs to be finalized between the landlord and renter before the banks can begin the lending process. Workers with fixed income can provide employment verification letter from their employer to the banks and get the loan without any guarantee.
For others, promissory notes or Justice Shares (shares of government-owned companies that were given to the six lowest income deciles of Iranians 10 years ago) can be used as collateral for the loan.
In the absence of either of these, borrowers need to introduce a guarantor to the bank.
The registration for security deposit assistance loans started on July 25, 2020. Fifteen banks were introduced on August 10, 2020, as the designated banks to offer these loans.
According to the Central Bank of Iran’s latest data, the price of rented residential units in Tehran and other urban areas increased by 32.6% and 36.3% respectively during the second month of the current Iranian year (April 21-May 21) compared with the corresponding month of the year before.
