Endowment Property Leasing in AANES Areas

The Endowments Law No. 13 of 2023, issued by the General Council of the Autonomous Administration in North and East Syria, outlines procedures for managing and disposing of endowment funds and properties, including methods for their investment. It also provides regulations for leasing endowments, determining beneficiary rights, and specifying the judicial proceedings required for dealing with disputes.

Per Law No. 13, lease and investment contracts for endowment properties have become executive bonds subject to the Civil Procedures Law, which the General Council issued in September 2022. This means that a lease contract authenticated by the Endowments Directorate is considered a directly enforceable document at the implementation departments, without the need to file a lawsuit in court and obtain an enforceable judgment. The Endowments Directorate has the right to reclaim the property upon the expiration of the lease or investment period.

Generally, Law No. 13 of 2023, in force in the areas under the control of the AANES, aligns with the endowment laws enforced in areas under the regime’s control, including the most recent Law No. 31 of 2018. This law permits the leasing of endowment properties for long periods on the condition that they benefit the endowment fund and the community. If leasing an endowment is determined beneficial and the right of investment is granted, lessees pay the rent to the Endowment Directorate, and the ownership remains endowment-based. The Ministry of Endowments, through its directorates, may lease endowment properties, whether agricultural lands, residential buildings, or commercial premises, through public auctions. In this case, the lessee pays a “donation” to the benefit of the Endowment Directorate in addition to a nominal annual rent. The lease contract is for a specified duration but is subject to implicit renewal. These properties are subject to the provisions of the lease contracts in the Civil Law issued in 1949, with the requirement of authentication by the Ministry of Endowments and its directorates.

In AANES areas, Article 23 of Law No. 13 of 2023 stipulates that when a tenant wants to transfer their lease to a new tenant, they must seek the opinion of the Endowments Directorate and inform it about the actual occupation fee agreed upon between the original and new tenant. The Endowments Directorate has the priority right to purchase the lease when the tenant wishes to transfer it to another party. The Endowments Directorate has the right to either take a donation of 10 percent of the agreed actual rent value or purchase the lease from the old tenant. This is because the Endowments Directorate is originally the owner of the real property’s right, while the tenant holds the right to use the property during the lease term. Any transfer without the approval of the competent Endowments Directorate is considered void.

In the case of commercially used endowments properties, Law No. 13 of 2023 stipulates that the seller must obtain the approval of the Endowments Real Estate Committee, affiliated with the Endowments Directorate, before transferring the leasehold “Furough” of the commercial property to the buyer.

If the Committee does not purchase the lease, the seller must pay 10 percent of the property’s current value as a donation to the Endowments Directorate. Then, a new lease agreement is drawn up between the Endowments Real Estate Committee and the new buyer. “Furough” (perpetual leasing) contracts for commercial premises, signed before the enactment of the current leasing law, No. 10 of 2006, are indefinite and subject to compulsory extension regardless of the landlord’s desire. Under the furough system, the shop tenant pays the rent to the Endowments Directorate, usually a nominal amount that cannot be increased. The tenant has the right to transfer the shop, with all its physical and intellectual elements, to another tenant in exchange for an amount known as the furough fee, which essentially equals the real price of the shop. The new tenant then pays the same low rent to the Endowments Directorate.

Retroactively, Law No. 13 of 2023 requires an increase in the occupation fee for endowment properties rented out before the law was passed. The fee is 60 percent of their last rental value for every three years prior without an increase in their occupation fee. The law gives both the tenant and the landlord (Endowments Directorate) the right to file a valuation lawsuit in court to determine the rent value of the disputed property. The court bases its valuation on expert estimations of the leased property, aiming to balance the benefits derived from the leased property and the due rent.

Meanwhile, in regime areas, the current Law No. 31 of 2018 requires increasing the rent fees for endowment properties rented out before its issuance by 30 percent of their last rent value for every three years prior without an increase in their occupation fee.

This legal duality causes much confusion in northeast Syria, leading to uncertainty between the laws issued by the AANES and the laws enacted by the Syrian regime. Beneficiaries of endowment properties are now obliged to increase the occupation fee for these properties and make payments twice: once at a rate of 60 percent of the prevailing rent to the Endowments Directorate of the AANES, and once at a rate of 30 percent of the prevailing rent to the endowments directorates of the Ministry of Endowments in Damascus.

New and old must be registered with the Endowments Directorate under Law No. 13 of 2023. Tenants who fail to comply with the registration requirement will see their contracts become null and void three months after being notified. Tenants are notified, according to the rules of notification, through official newspapers published in northeast Syria if personal delivery to the taxpayer or their first-degree relatives is not possible. This poses a potential risk to rights, especially for expatriates and displaced individuals who may not be properly notified, thus rendering their contracts void three months after failing to register them with the Endowments Directorate.

Furthermore, Law No. 13 of 2023 penalises anyone who infringes on endowment properties with the same penalties as public property violations. Article 17 of Law No. 13 states that violators of endowment properties include anyone who occupies or utilises endowments properties or parts thereof in any capacity without a valid contract documented with the Endowments Directorate. The collection of occupation fees by the Endowments Directorate does not constitute a contract for those encroaching on such properties.