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Tehran landlords and tenants lock horns in heat of property boom Tehran landlords and tenants lock horns in heat of property boom
(about 3 hours later)
When the unexpected sale of the aging Tehran villa in which he rented a flat threw his living situation in flux, Ali reacted stoically. Hurrying to meet his landlord's one-month deadline, the 28-year-old art teacher packed his belongings, payed off the utility bills and moved to an elevator-less high-rise block of flats with 147 steps and a price that exceeded his previous housing payment by 30%. When the unexpected sale of the ageing Tehran villa in which he rented a flat threw his living situation in flux, Ali reacted stoically. Hurrying to meet his landlord's one-month deadline, the 28-year-old art teacher packed his belongings, paid off the utility bills and moved to an elevator-less high-rise block of flats with 147 steps and a price that exceeded his previous housing payment by 30%.
At his own expense, he replaced the broken window panes, retiled the moldy bathroom, and whitewashed the walls. It was only when an unexpected visitor arrived during the final day of renovations, announcing she was in negotiations with the landlord regarding a potential purchase, that a sense of defeat sank in. At his own expense, he replaced the broken window panes, retiled the mouldy bathroom, and whitewashed the walls. It was only when an unexpected visitor arrived during the final day of renovations, announcing she was in negotiations with the landlord regarding a potential purchase, that a sense of defeat sank in.
"Mostly, I felt weak," Ali says. "It was my last day of fixing the place, and I had paint everywhere, even my eyebrows. I asked her, how are you going to do it? I have a contract.""Mostly, I felt weak," Ali says. "It was my last day of fixing the place, and I had paint everywhere, even my eyebrows. I asked her, how are you going to do it? I have a contract."
The woman, looking surprised, began talking on her mobile phone. "She was angry," Ali says. "The estate agent on the other end of the line tried to calm her down, telling her it wouldn't be a problem. He would pay my deposit back and make me leave the place."The woman, looking surprised, began talking on her mobile phone. "She was angry," Ali says. "The estate agent on the other end of the line tried to calm her down, telling her it wouldn't be a problem. He would pay my deposit back and make me leave the place."
For an ordinary Tehrani, finding a suitable home in the city of 12.2 million is often a test of physical and mental endurance. Rapid urbanisation and constant high demand has seen rent prices soaring in recent years, a trend only exacerbated by inflation and a free-falling currency. The rial has lost more than 60% of it value since December 2011 as a result of domestic and foreign factors, including international sanctions imposed on Iran. For an ordinary Tehrani, finding a suitable home in the city of 12.2 million is often a test of physical and mental endurance. Rapid urbanisation and constant high demand has seen rent prices soar in recent years, a trend only exacerbated by inflation and a free-falling currency. The rial has lost more than 60% of its value since December 2011 as a result of domestic and foreign factors, including international sanctions imposed on Iran.
Affluent Iranians, seeking a safe investment for their savings, are buying up urban property almost as fast as gold, further accelerating the already break-neck speed of construction. Speculators scour desirable neighbourhoods for lucrative parcels of land, and in north Tehran, apartment buildings no more than a decade old are often torn down to make room for luxurious high-rises catering to the rising standards of wealthy urbanites. In a stagnating economy where real estate is one of the few sectors moving, it is not unusual for property to change hands several times a year. Affluent Iranians, seeking a safe investment for their savings, are buying up urban property almost as fast as gold, further accelerating the already breakneck speed of construction. Speculators scour desirable neighbourhoods for lucrative parcels of land, and in north Tehran, apartment buildings no more than a decade old are often torn down to make room for luxurious high-rises catering to the rising standards of wealthy urbanites. In a stagnating economy where real estate is one of the few sectors moving, it is not unusual for property to change hands several times a year.
"Buyers flip it [sell a property] within six months or so for a big profit and the new buyer would do the same only a few months later," says Cyrus Tahmassebi, the former chief economist for Ashland Oil."Buyers flip it [sell a property] within six months or so for a big profit and the new buyer would do the same only a few months later," says Cyrus Tahmassebi, the former chief economist for Ashland Oil.
The housing sector has seen the success of countless get-rich-quick schemes, but is a source of existential stress for locals trying to stay afloat in the deteriorating economic climate. Building sales have had a devastating impact on evicted renters, whose returned deposits are worth just a third of what they were a year ago.The housing sector has seen the success of countless get-rich-quick schemes, but is a source of existential stress for locals trying to stay afloat in the deteriorating economic climate. Building sales have had a devastating impact on evicted renters, whose returned deposits are worth just a third of what they were a year ago.
The rental of an average flat demands a deposit of around $6,000 (£3,800) – a small fortune in a country where the average worker earns less than $200 a month. With Iran's annual inflation rate at 27.4%, property hunters must scramble for new leases to prevent the value of their original deposits from depreciating even further. Reasonably priced housing is a rare commodity, and, as Ali found out, a single listing can generate more than 40 phone calls from interested parties. The rental of an average flat demands a deposit of around $6,000 (£3,800) – a small fortune in a country where the average worker earns less than $200 a month. With Iran's annual inflation rate at 27.4%, property hunters must scramble for new leases to prevent the value of their original deposits from depreciating even further. Reasonably priced housing is a rare commodity and, as Ali found out, a single listing can generate more than 40 phone calls from interested parties.
"If you don't use your money immediately, you have to account for making a higher deposit with each month that goes by," he says. "Things get pretty desperate. What do you expect from an ordinary teacher who makes [$250] a month?""If you don't use your money immediately, you have to account for making a higher deposit with each month that goes by," he says. "Things get pretty desperate. What do you expect from an ordinary teacher who makes [$250] a month?"
Prior to his eviction, Ali had lived in a single-family villa that had been illegally subdivided into three units. Once a mainstay of the city's middle-class neighbourhoods, such houses are becoming difficult to find, as they are considered particularly lucrative among speculators. The trend has been for developers and estate agents to join forces with owners, tearing down the simple brick villas to make way for more modern apartment buildings. Recently, real estate offices have also gotten in on the game, often acting as arbiters between developers, owners and occupants. Prior to his eviction, Ali had lived in a single-family villa that had been illegally subdivided into three units. Once a mainstay of the city's middle-class neighbourhoods, such houses are becoming difficult to find as they are considered particularly lucrative among speculators. The trend has been for developers and estate agents to join forces with owners, tearing down the simple brick villas to make way for more modern apartment buildings. Recently, real estate offices have also gotten in on the game, often acting as arbiters between developers, owners and occupants.
"There are many problems between owners and tenants lately, and both sides are trying to take advantage of the rules," says Milad, an estate agent in the upper-class neighbourhood of Pasdaran. "The main problem is that if you want to take it to court, it takes half a year."There are many problems between owners and tenants lately, and both sides are trying to take advantage of the rules," says Milad, an estate agent in the upper-class neighbourhood of Pasdaran. "The main problem is that if you want to take it to court, it takes half a year.
"Sometimes the process is so challenging that people choose not to bother.""Sometimes the process is so challenging that people choose not to bother."
Though most tenants are unaware of their options, those in the know may use the sluggishness of local litigation processes to forestall eviction. When a landlord asked Mina, 36, to vacate her home owing to impending demolition, she refused to budge. As an administrative assistant at a real estate agency, she was well-versed in the intricacies of tenant's rights. As the other residents of her aging low-rise reluctantly gathered their boxes, she stayed put, snubbing her landlord with a little-known clause. Though most tenants are unaware of their options, those in the know may use the sluggishness of local litigation processes to forestall eviction. When a landlord asked Mina, 36, to vacate her home owing to impending demolition, she refused to budge. As an administrative assistant at a real estate agency, she was well-versed in the intricacies of tenants' rights. As the other residents of her ageing low-rise reluctantly gathered their boxes, she stayed put, snubbing her landlord with a little-known clause.
"The legal codes are … complicated, but ultimately renters have many options to refuse to leave," she says. "Until you have at least one personal item in the house – even a shoe – the owner is not allowed to enter. This can turn into a months-long court battle, which is why owners feel pressured to get their tenants out as soon as possible.""The legal codes are … complicated, but ultimately renters have many options to refuse to leave," she says. "Until you have at least one personal item in the house – even a shoe – the owner is not allowed to enter. This can turn into a months-long court battle, which is why owners feel pressured to get their tenants out as soon as possible."
Unfamiliarity with industry practices and lack of economic perspective can also create financial problems for landlords, some of whom are just as cash-strapped as those renting their properties. A year ago, 66-year old pensioner Reza drew up a two-year contract for the young couple renting his one-bedroom flat in a large west Tehran housing complex. With inflation devaluating the rent and deposit amount by roughly 50% in the past 12 months, the contract has become uncompetitive at a time when Reza's own living expenses have doubled. "Everything is getting more expensive and I'm expected to survive on [$130] a month," he says. Unfamiliarity with industry practices and lack of economic perspective can also create financial problems for landlords, some of whom are just as cash-strapped as those renting their properties. A year ago, 66-year-old pensioner Reza drew up a two-year contract for the young couple renting his one-bedroom flat in a large west Tehran housing complex. With inflation devaluing the rent and deposit amount by roughly 50% in the past 12 months, the contract has become uncompetitive at a time when Reza's own living expenses have doubled. "Everything is getting more expensive and I'm expected to survive on [$130] a month," he says.
With savings quickly drying up, he considered selling the home, but the tenants refused to leave, knowing they were unlikely to find a similar deal elsewhere. Unable to find a buyer until the contract expires, Reza has little choice but brace for what promises to be a challenging year. With savings quickly drying up, he considered selling the home, but the tenants refused to leave, knowing they were unlikely to find a similar deal elsewhere. Unable to find a buyer until the contract expires, Reza has little choice but to brace for what promises to be a challenging year.
"If I want to sell, I'm supposed to find a buyer who accepts the current agreement, but that's impossible," he says. "For a person like me in this age, the most important thing is living in peace, but imagine not having enough money to fix the car to go to the doctor. I've no idea what's going to happen, but I worry." "If I want to sell, I'm supposed to find a buyer who accepts the current agreement, but that's impossible," he says. "For a person like me at this age, the most important thing is living in peace, but imagine not having enough money to fix the car to go to the doctor. I've no idea what's going to happen, but I worry."