Legislative Decree No. 66 of 2012, which established two zoned real estate areas within Damascus governorate as part of the general plan for the capital city, compensated some rights holders with zoning shares in these two areas. This article explains what is meant by “zoning shares” and how people obtain them.
Decree No. 66 clarified that those entitled to zoning shares are owners of built properties within the zoned real estate area who have proven their ownership with official documents and endorsements. This mainly refers to owners of properties that were registered and documented in the Land Registry prior to the establishment of the new zoned real estate areas. However, non-compliant owners who have built on public lands, or on private agricultural lands where construction is prohibited, might instead be allocated not free alternative housing but will not be entitled to zoning shares.
As for renters, Decree No. 66 stipulated that tenants of properties within the zoned real estate area whose rental agreements are subject to the provisions of the old Tenancy Law No. 111 of 1952 are also entitled to zoning shares. Essentially, this means that the property is officially documented in the Land Registry. In such a case, a tenant occupying the property is entitled to a share equivalent to 30 percent of the estimated value of the residential property they occupy, and 40 percent for a tenant occupying commercial property.
The 2012 decree also stipulated dividing the zoned real estate area into plots, which are jointly owned by the owners within the zone. The value of the plots are estimated and then distributed in the form of joint shares, or zoning shares, amongst the rights holders by a distribution committee. This committee is formed by a decision of the governor and is chaired by an advisory judge appointed by the Minister of Justice. It also includes two real estate appraisal experts appointed by the Minister of Housing, and two representatives from amongst the area’s property owners.
The zoning shares for each rights holder are calculated according to complex processes carried out by several committees, in accordance with Decree No. 66. To put it simply: an initial committee estimates the value in Syrian pounds of the properties owned by rights holders, which were constructed before the establishment of the zoned real estate area based on prevailing prices at the time of the procedure. Subsequently, the area becomes joint communal property of the rights holders, though each person theoretically retains their share. Following this, another committee calculates the Syrian pound value of the plots intended for construction, specifically designated for rights holders, as per the zoning plan. Each of these is referred to as a zoning plot. The Damascus governorate is entitled to allocate large areas within the zoned real estate area, free of charge, for the establishment of service or investment plots. There are no clear criteria for valuation, as these plots have not yet undergone construction. After the valuation, the value of the zoning plots is divided among the rights holders, who each receive their zoning shares.
The distribution committee issues its definitive final decision, which includes the names of those entitled to shares of the zoning plots as joint owners. The Damascus governorate also releases nominal data about the joint zoning plot shares and delivers them to the owners based on the distribution committee’s tables. This data should list the name of the zoned real estate area, the names of the shareholders, the number of shares, and the total count of shares for the zone.
Owners of the zoning plot shares can begin trading their shares within a year after the governorate announces the final distribution scheme. However, initially, the rights holder’s share ownership must be registered with the Damascus governorate. Subsequently, anyone can access ownership information of the shareholders from the share registry and obtain a certified copy in exchange for a fee set by the governorate. The governorate also charges a five percent fee of the traded share value for every share trading transaction.
The process of transferring and registering the ownership of zoning plots is conducted in the Land Registry, in accordance with the current status of the joint share owner. If someone has a large share, they can apply for an independent zoning plot that is equivalent in value to the shares they own. The executive office in the governorate then issues a decision to allocate the plot and register it under that person’s name. This decision is announced on the governorate’s notice board and a copy is sent to the Directorate of Cadastral Affairs for the property registration procedure.
For those who own smaller shares that don’t equate to an independent zoning plot, Decree No. 66 allows them the option to establish a joint-stock company under the Companies Law. In this scenario, the governorate issues a decision to allocate the shares to the company, announcing it on their notice board. The governorate also sends a copy of this decision to the Ministry of Economy and Trade for establishing a joint-stock company and another copy to Cadastral Affairs for registering the plot ownership under the company’s name. Properties within the decree’s zone of implementation are exempted from land registration fees.
Decree No. 66 prohibits the ownership and allocation of more than one zoning plot, whether by individuals or companies. If it is not feasible to establish or join a company, the only option left for a small shareholder is to sell their shares via public auction. In such cases, the Damascus governorate forms a special committee, in accordance with Contract Law No. 51 of 2004, to sell the zoning plots. The proceeds from the sold plots are then deposited in the Damascus governorate’s account at the Central Bank of Syria, labelled as a “trust account”. The governorate may not use the funds of the owners of the sold zoning plot shares. This group of zoning share owners is the most adversely affected as they are forced to sell at auction prices that builders compete for.
The Directorate for Implementation of Decree No. 66, which is affiliated with the Damascus governorate, announced the commencement of share trading for the second regulatory zone south of the Southern Ring Road, called Basilia City, starting from May 15, 2023. The trading period will last until May 15, 2024. A square metre consists of 339,615 shares, according to the the Finance Directorate of the Damascus governorate. Article 25 in Decree No. 66, set the price of a single share at SYP 1.