5 disadvantages of “automatic” renewal of rent

According to Tejarat News, the policy “Automatic renewalThe 1400 leases this year, based on what is called “All Contracts” as well as “Six Exceptions” in the text, contain five problems and ambiguities for market participants.

The most important blind spot of this decision is the “fate of the tenants” in determining the formula of mortgage and rent or even ending the residence in the first year of rent.

Since the “change in mortgage weight and monthly rent of the 1400 contract” is not mentioned as permissible for “non-automatic renewal”, its request can obscure and complicate the path of the agreement.

the world of economy According to the second article, he wrote, “If the owner has sold the rented property or unit and received the sales contract in the real estate transaction registration system and received the tracking code, and in addition to this information, the property in The real estate system can register the rental agreement with the current tenant.

Three obstacles for the landlord and disrupt the property sale process

On the one hand, in general, properties with tenants that are for sale are not very popular with buyers, and many buyers prefer to buy units that have the potential to negotiate with the tenant to vacate or, if desired, apply a new figure. Do not have rents.

In addition, a group of home buyers in the current market are of the kind of applicants who have become well-off and a few of the first-time homeowners who intend to live in the purchased property. As a result, landlords will have difficulty selling their property in situations where they cannot be evicted.

The tenant may also not cooperate with the landlord to visit the property and he may lose the opportunity to sell due to this problem.

The second obstacle that this clause creates for landlords is the issue of pre-sale repairs, which is not possible due to the tenant’s presence on the property.

In fact, many rental homes in the housing market need to be renovated and overhauled before they can be sold, and according to the housing market routine, the value of renovated homes usually doubles the cost of renovation.

The third obstacle is related to the initial problem that arises for buyers. However, buying a home with a tenant means accepting the risk that the tenant may not vacate the property while the new owner is expecting it, which is a primary problem for the buyer despite the fact that landlords are selling residential units. Tenants are likely to run into trouble.

Also, in the provision of the second article, it is stated that “if the tenant has not performed his / her duties in a timely manner at the discretion of the judicial authority (Dispute Resolution Council) during the previous rental period, it is possible for the landlord to refuse to extend the contract with him.”

Although this clause is ostensibly intended to serve the landlord’s interests, since the tenant’s discretion is left to the dispute resolution councils, landlords are in practice forced to go through a legal process to exercise their natural rights.

In fact, in addition to the landlord, tenant and real estate agents, according to this paragraph, from now on, the judiciary as the fourth party involved in housing rental transactions will be opened to contracts and the process of pursuing the tenants’ liability will be time consuming.

The third problem with landlords is the clause that allows the landlord not to renew the tenant’s contract if his or her child is legally married and needs to live in a rented unit at the discretion of the court.

Here, too, the process of proving that the owner intends to provide the said housing unit to his child is quite vague, and in addition, during the legal process to use the natural rights of each owner, such as allocating his property to his child, a kind of market problem It is considered a lease and can even lead some landlords to withdraw from the rental market.

Two ambiguities about tenants’ discretion

The first is that the landlord has applied for a building permit from the relevant authorities for demolition, reconstruction or repair, and the second is that the tenant refuses to accept an increase in the rent within the specified ceiling.

Naturally, the tenants ask, “Do they intend to continue living in the property or not?” Also, “Do they want to convert their rents with a different formula or a so-called different weight from the mortgage and monthly rent?” They have the right to decide. But in the text of the Tenant Protection Law, these two issues are ambiguous.

In fact, nowhere in the tenant protection package is there any mention of how the natural right of “conversion” is to be exercised for the tenant if the formula and the mortgage-rent ratio are to be changed despite the ceiling.

Another ambiguity concerns when the tenant intends to terminate the lease for any reason. In a paragraph of the second article mentioned, if the increase in the amount of rents equal to the rates approved by the tenant is not accepted, it is possible to terminate the contract.

However, in general, the text of the rules does not explicitly state that the tenant has the right to terminate his contract and refuse to renew it in any case.

Opinions of legal experts and experts on the housing market

Legal experts believe that the package is a protection law and only works when the tenant needs support.

In this case, if he intends to transfer and not renew the contract, he does not need legal protection. However, housing market participants believe that in order to prevent problems in the rental market, this issue should be explicitly mentioned in the text of the package, as otherwise, in certain cases, some landlords may insist on the tenant continuing to live. Intermediary criteria Automatic renewalRefuse to pay the tenant’s deposit and force him to go through litigation in dispute resolution councils to use his obvious authority to terminate the contract.

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