Ministry of Endowments is Reappraising Endowment Properties and Raising Rents

The transitional government’s Ministry of Endowments has recently begun reappraising the value of leased endowment properties such as lands, commercial shops, and residences, according to prevailing market prices with the aim of increasing rental values.

These measures cover properties subject to the compulsory extension and furough systems and are being implemented in coordination with the Ministry of Finance, which issues a statement of the property’s market value to be later adopted in determining the rental fee. These procedures are currently being applied at the Directorate of Endowments in Damascus. Dozens of tenants visit the Endowments and Finance offices daily amid concerns that they may be forced to vacate the properties.

Ministry of Endowments properties have a special nature; they are neither state-owned nor privately owned. Although most originally belonged to private individuals, they were donated as stipulated in Law No. 31 of 2018, which governs the work of the Ministry of Endowments. Endowment properties are intended for public benefit and are defined under Law No. 31 as “movable and immovable properties designated as God’s property and allocated for public benefit in accordance with the provisions of Islamic Sharia.” Endowment properties include mosques, places of worship, schools, libraries, cemeteries, shrines, and sanctuaries. Some of the endowment properties are private agricultural lands that their owners designated as endowments benefiting the public. An endowment means that the ownership of a property exits the hands of its owner, by their will, so that its benefits accrue to the people, and its ownership cannot be transferred to anyone.

Syrian laws permit the leasing of endowment properties for long periods, provided this leads to greater benefit for the endowment funds and society. This is reflected in granting investment and usufruct rights to others in exchange for rent paid to the Endowments, while the original ownership remains endowed. In application of this, the Ministry of Endowments, through its directorates, leases endowment properties via public auctions, where the winning bidder, the “tenant,” pays a donation to the Directorate of Endowments, alongside a symbolic annual rent. Article 1004 of the Civil Code issued in 1949 granted the Endowments Directorates the right to exploit endowment properties for long periods through what is known as the “dual lease right.” Under this right, a person acquires permanent usufruct rights over an endowment property in exchange for paying an amount less than the property’s value, along with a symbolic annual rent. The annual rent can be subject to reappraisal. The person may use and benefit from the property or even transfer their usufruct right to others. The usufruct right is also inherited by their heirs, but the original ownership must remain endowed.

A source familiar with the matter at the Ministry of Endowments told The Syria Report that the Ministry is also working on reclaiming certain endowment properties invested by former influential figures linked to the Assad regime, without naming them. The source also indicated that some endowment properties are leased as residences and are subject to the compulsory extension system, while others are leased as commercial shops subject to the furough system. In both cases, the Ministry seeks to reappraise the value of these properties to raise their rental prices.

A Syria Report correspondent noted that the Directorate of Endowments in Damascus Governorate has told tenants of endowment properties, particularly commercial shops, that they have to approach the Ministry of Finance to reappraise the value of the shops according to prevailing market prices, in order to determine their new rental values. The Ministry of Finance’s role in this is to provide tenants with a statement specifying the value of the leased property based on the market price in the area. Afterwards, the tenant must approach the Directorate of Endowments in the governorate and submit this statement. The Directorate of Endowments will then determine the annual rent that the tenant of the endowment property must pay, at a rate of 7/1,000 of the property’s market value. That is, a tenant of a commercial endowment property with a market value of SYP 1 billion will pay an annual rent of SYP 7 million pounds to the Directorate of Endowments. The Syria Report correspondent noted that the rent amount will be paid in dollars, not in Syrian pounds.

According to the correspondent, dozens of tenants of endowment commercial shops visit the directorates of the Ministries of Finance and Endowments in Damascus Governorate daily to process the reappraisal transaction. In Damascus alone, there are 4,000 leased endowment commercial shops.

The correspondent indicated that the reappraisal of endowment property values is a temporary measure and that next year, the Ministry intends to implement new procedures. So far, the Directorate of Endowments in Damascus continues to reassure occupants of endowment properties that there is no intention to reclaim these properties from them or to evict them, at least in the foreseeable future. However, the Ministry may increase the rental rate next year.

As for residential endowment properties, which are few in Damascus compared to commercial shops, the situation is different. The Directorate of Endowments in Damascus is quietly seeking to reappraise their values based on the occupants’ circumstances. According to the correspondent, some properties have had their rents multiplied tenfold without undergoing a reappraisal process. This raises many questions about the criteria used by the Directorate in the rent increase process. Based on available information, the Directorate will not impose a reappraisal for residential endowment properties, but will conduct periodic re-evaluations of rental values. Some tenants interviewed by The Syria Report expressed fears that rent increases may reach levels they cannot afford.

In both cases, whether concerning residential or commercial endowment properties, a state of anxiety grips the tenants.“In the end, we will leave these shops sooner or later, and all these procedures are temporary until they find a suitable formula to evict us,” a tenant said.

A real estate expert told The Syria Report that these procedures do not send reassuring messages to tenants; rather, they are rapid measures because the Ministry believes there is injustice in leasing these properties and is trying to rectify it hastily while awaiting permanent measures. The Ministry has not disclosed its full vision on this matter.

On another front, the Ministry of Endowments has recovered many endowment properties that were leased to government entities, as well as other properties that were offered for investment during the Assad regime era, such as the Yalbugha Complex and the historic Kindi Cinema in Damascus.

The measures taken by the Ministry of Endowments reveal a gradual approach to reclaiming endowment properties through reappraisal and raising rents, without explicitly announcing its future intentions. While these steps are presented as rectifying past injustices, the lack of transparency and inconsistent standards, especially between commercial and residential properties, reinforce a sense of instability among tenants. The daily visits of hundreds of people to official offices reflect the level of social anxiety resulting from these policies, which are perceived by some as a prelude to reclaiming properties or changing the nature of their occupancy.