Leasing endowed property: the competent body and the form of the contract
A lease of endowed property is not an ordinary landlord–tenant contract. The lessor is a body managing assets held for a purpose that may only be dealt with as the law allows, so the legislature gave such leases special rules. The office of lawyer Ali Barakat, in Baghdad, al-Yarmouk, follows these rules for people who want to rent endowed property and for existing tenants who want to understand where they stand.
Who has authority to lease
It depends on the kind of endowment. A controlled endowment is run directly by the endowment office, so the office leases it through its governorate directorate or through its authority for administering and investing endowment funds. That authority appears among the formations in article 9 of the Sunni Endowment Office Law No. 56 of 2012 and article 9 of the Shia Endowment Office Law No. 57 of 2012. An attached endowment has its own trustee who manages it under the office's supervision, so the trustee leases, collects the income and accounts for it each year under article 4 of the Endowments Administration Law No. 64 of 1966. The first thing to check before signing is who represents the endowment on the land register and in the office's letters.
The legal frame of the contract
Article 8(1) of the Endowments Administration Law provides that endowed property is leased under a regulation, and that the rights and obligations arising from the lease are set by instructions. The terms are therefore not left entirely to the parties; these regulatory texts govern them. Article 8(2) allows a lease of endowed property for more than three years by decision of the board of the authority for the administration and investment of endowment funds formed under Law No. 18 of 1993. A long lease thus needs a higher level of decision than an ordinary one.
What to read in the contract before signing
Before signing it helps to look at a few specific points: the identity and capacity of the leasing body; the term and whether it needs the authority's decision; the permitted use; the conditions for development or alteration; and how the property is handed back when the term ends. A tenant who wants to build or renovate cannot rely on the lease alone, because building on endowed property has its own rules, covered in building on endowed property.
A tenant's breach
Article 13 of the Endowments Administration Law gives the endowment body two measures where a tenant breaches contractual obligations or violates laws, regulations or instructions. The first is to take possession of the property and evict through execution procedures once thirty days have passed from notifying the tenant of the eviction order; the competent execution directorate carries it out. The second is to make the tenant liable for twice the value of the damage caused to the property or its contents. This is an administrative enforcement route, different from the eviction case an ordinary landlord brings in court.
The term ends without handover
Article 14 applies articles 12 and 13 to every tenant whose lease has ended without handing the property back to the endowment directorate. Staying on after the contract ends puts the occupier in the position of an encroacher. Article 12 punishes encroachment with imprisonment and imposes twice the fair rent from the start of the encroachment until it is removed, plus twice the damage, after a warning to remove the encroachment within no more than thirty days of notification, followed by recourse to the investigation court, which hears the case urgently.
Objecting to an eviction order
An eviction order is an administrative decision of the endowment body. A tenant who believes it was issued without a valid ground, for example because the lease was honoured or its term has not ended, looks at the available route for challenging it. See challenging decisions of an endowment office. In every case the written lease, payment receipts and the directorate's letters are the first evidence.
Legal basis and sources
- Endowments Administration Law No. 64 of 1966 (Official Gazette No. 1293 of 31/7/1966) — Articles 4, 8, 12, 13 and 14
- Sunni Endowment Office Law No. 56 of 2012 (Official Gazette No. 4254 of 15/10/2012) — Article 9
- Shia Endowment Office Law No. 57 of 2012 (Official Gazette No. 4254 of 15/10/2012) — Article 9
Frequently asked questions
Can endowed property be rented for five years?
A lease of more than three years is allowed by decision of the board of the authority for the administration and investment of endowment funds, under article 8(2) of the Endowments Administration Law.
Does the endowment directorate need a court case to evict a tenant in breach?
Article 13 lets it take possession and evict through the execution directorate thirty days after notifying the tenant of the eviction order.
What follows staying in endowed property after the lease ends?
Articles 12 and 13 apply under article 14: the rules on encroachment and liability for twice the fair rent and twice the damage.
Who leases an endowment that has its own trustee?
The trustee, under the supervision and yearly audit of the endowment office under article 4 of the Endowments Administration Law.
Related topics and articles
- 01The Sunni Endowment Office: jurisdiction and property transactionsThe jurisdiction of the Sunni Endowment Office under Law No. 56 of 2012: its council, its investment authority, controlled and attached endowments, and property transactions.
- 02Building on or altering endowed propertyBuilding, repairing or altering endowed property: office approval for the trustee, the office council's decision, building rights and long leases, and recording buildings.
- 03Challenging decisions of the competent endowment officeRoutes for challenging endowment office decisions: objecting to trustee-audit committee decisions within ten days, grievance and appeal to the Administrative Court, the Personal Status Court, and cassation.
- 04The Shia Endowment Office: jurisdiction and property transactionsThe jurisdiction of the Shia Endowment Office under Law No. 57 of 2012: endowments without a private trustee, appointing and removing trustees, sale and substitution, and the holy shrines.
- 05The Office of Endowments of the Christian, Yazidi and Sabean Mandaean ReligionsThe Office of Endowments of the Christian, Yazidi and Sabean Mandaean Religions under Law No. 58 of 2012: attachment, council, a directorate for each faith, and support for trustees.