How to ensure protection for an investor with rental units

How to ensure protection for an investor with rental units

Finding suitable rental housing is becoming increasingly difficult; in general, rent in prominent cities in Turkey has risen by 30-50%. And in Izmir, the rent has tripled in some places compared to the «pre-COVID» period.

And besides, due to the sharp reduction in the supply of «free» apartments, fraudulent schemes are becoming more sophisticated.

Even if everything is fine with the housing, the owners try to take as much money as possible in advance, in addition to the deposit and payment to the realtor. This is done under various pretexts (guarantee of solvency, etc.). However, what is illegal is that when an apartment is essential, there is no time to defend your interests in court, not to mention that it is very troublesome.

Content:

Emlaksayfasi advised tenants what to pay attention to when choosing a rental housing option, what they can save on, and how not to let themselves be deceived. However, these instructions are also crucial to owners: how to protect yourself from fraudulent tenants who can reduce the profit from your property to nothing.

This is especially critical for foreigners who do not live in Turkey permanently and have decided to rent out their apartment or house while it is idle. And even more so if we are talking about housing purchased for investment purposes (rental business).

Not knowing the local laws and regulations makes it more challenging to navigate; therefore, TurkEstate decided to «introduce» you to who and what pays during the tenant's stay on the landlord's territory (utility bills, minor repairs, etc.), as well as the basic principles of drawing up the rental agreement. This will minimize «blind spots» and protect yourself from scammers and so-called «consumer terrorists».

So, what should you pay attention to when renting a property?

How to ensure protection for an investor with rental units

Practical guide

Let's raise a few important topics that you should pay attention to before signing a rent agreement.

The fundamental rule: we fix everything in writing

Advice to both the renter and the owner: do not forget to draw up an agreement concerning real estate rental in writing. If the contract has already been concluded, an additional agreement can be added to it at any time (annex to the contract). There can also be as many applications as you want.

Remember that in a conflict situation, oral agreements are not valid, and neither are recorded audio calls or correspondence on social networks. The court has sometimes begun to consider those, but so far, this is more often the exception than the rule in Turkey.

Both parties must have a copy of the contract with all appendices and a «wet» seal. Both parties must sign each page of the contract.

Who owns the house?

Advice to the renter: it is essential whether the person from whom you rent the house or whose information will be specified in the rent agreement is the actual owner (or co-owner). Check this before making a deal.

If the person who rents the house is the landlord's legal representative, make sure that a power of attorney is executed correctly.

In Turkey, cases have become especially frequent when housing is rented by a «friend-brother-matchmaker» of the owner, demonstrating proof of kinship or close friendship. And when the renter has already made all the payments and moved, new renters, appear here, to whom the owner personally rented his apartment.

In this case, as a rule, all parties have to go to court, but a lot of money has already been invested, and other successful rental housing options have been missed.

Advice to the owner: if you do not rent the apartment personally, then take care of obtaining a power of attorney for a reliable person who will represent your interests in Turkey. Besides, it will be safer for all parties if your representative can give your contacts for communication at the tenant's request in case he needs to clarify any questions directly. Although, if you want your property to be rented out, and you don't think about it at all, you can entrust everything to intermediaries: direct contact between the owner and the landlord in the presence of a trusted representative with the relevant documents is not obligatory.

Check the quality of housing

Advice to the renter: What should I pay attention to? Inspect the apartment or house in detail-the "physical condition." Is there anything that needs repair? In what condition are the sockets, lamps, and fixtures; are they in good condition? Is everything OK with the taps in the kitchen and bathroom; with the plumbing? Is there water flowing somewhere; is the pressure of hot and cold water normal; is there mold in the corners and on the ceiling; are there ants running on the floor?

Ideally, it would be nice to check how the apartment «feels» in different seasons, in sunny and windy weather – is it too hot or damp, does the apartment on the top floor overheat from the roof in the summer, etc., but this is not always possible.

Advice to the owner: Knowing your apartment's condition. You can honestly inform a potential renter about some of its disadvantages. At the same time, you are advising on how to avoid them («it's a little hot in this room in the summer, we can hang blinds», or «if you open all the windows, you won't need to keep the air conditioner on all the time»).

If the renter feels confidence in you, it will be easier for you to settle any disputes in the future.

How to ensure protection for an investor with rental units

The use of «word of mouth»

Advice to the renter: It is beneficial to talk to and get further information from your future neighbors when considering a rental unit.

This way it will be possible for you to collect much more information about the house's condition. The walls, the roof, and the quality of work of the management company. Make sure to get all the necessary phone numbers. Perhaps the neighbors will even warn you about the disadvantages of the apartment because they communicated with the tenants who lived in it before you. In this case, it would be helpful to find out how long the previous tenants lived and why they decided to move; tenants who change too often and do not live longer than a few months are a serious «red flag».

You can also find out if pets are allowed, and even if they are, how other residents treat them: suddenly, there are «haters» of animals in the complex.

Your neighbors can give you vital info on the easiest way to resolve disputes concerning the maintenance of the house. After moving in, they can be an excellent resource for information such as where are the nearest shops, good bakeries, etc. Not all residential complexes have so-called «communal chats», so «word of mouth» with neighbors is indispensable.

Advice to the owner: The same will be helpful to you. If you make friends among the neighbors, living in a complex can help you find out about tenants' inappropriate (for example) behavior promptly. They can also be entrusted with spare keys to the apartment on occasion: in many complexes, the gatekeeper has a copy of the keys (in case of an emergency), but not in all.

What expenses can be deducted from the rent?

If, after the renter moves into the house, there are any difficulties associated with the functioning of the apartment or house, he can cover them out of his pocket and deduct them from the rent: this is his legal right.

For example, with plumbing problems or boiler failure, the renter can withhold the amount spent on necessary repairs and provide bills to the landlord without prior consent. After all, in such cases, every minute is precious.

The most important thing here is the fact that there are bills and receipts for expenses incurred: if the renter does not have them on hand, then the renter cannot claim a deduction of these expenses from the amount of rent, even if «I changed the mixer myself, I can; therefore, we will pay 200 liras less this month».

The landlord, for his part, is obliged to make the necessary repairs at the request of the renter. If he refuses or does not agree to the deduction, when the renter organized the repair and provided all the checks, the renter has the right to solve this problem in court: the courts are always on the tenant's side in such matters.

Repair work

Advice to the renter: If something needs repair (cosmetic repairs of housing as a whole, or replacement of taps or sockets), specify this in the contract or annex to it: at whose expense the work will be carried out.

If additional financial investments are significant (not just «replace a burned-out light bulb»), this is all the more necessary to reflect in the documents: who will do the repairs and who pays for it. If the renter pays for some, it is possible to set off this amount in the rental amount.

Because if you drove into an apartment where something is faulty, and it was not reflected in the documents, it is considered that «they broke it themselves». Then you will have to fix the breakdown at your own expense or get a deduction from the deposit.

Advice to the owner: having a detailed description of the apartment's contents and the condition of the housing, it will be much easier for you to prove what exactly was broken by the renter.

Advice to both parties: it is better to add photographic materials to the contract – photos of the property before arrival. This is especially true of problem places.

By the way, «photo evidence» of the condition of taps, sockets, and lamps is significant.

Thus, you will have strong arguments in case of any dispute.

How to ensure protection for an investor with rental units

Whose area of responsibility?

As a rule, the solution of critical technical issues («clogged» electrical wiring, replacement of a broken boiler, replacement of a failed washing machine) is the owner's responsibility.

But many issues fall into the category of «controversial»: for example, periodically appearing mold on the walls, which is not uncommon for resort regions in winter.

Many issues can be resolved through negotiations: sometimes, it is easier to let the renter pay a smaller amount for a month to decide everything himself than to bother with repairs. If you are a foreigner, you don't live in Turkey, and local residents rent your property, they might know both building materials and reliable contractors well, making it easier for them to arrange for repairs.

Do not forget that it is essential for both parties to record (in writing) which works, when precisely, and by whom were produced. It makes sense to make copies of all receipts (for the purchase of materials, payment for work, etc.): the originals remain with one party (owner or tenant), copies – with the other.

How to prepare the text of the rent agreement?

Let's repeat once again: to protect the rights of both the landlord and the tenant and prevent future disputes, all the details both parties agreed upon must be stated in writing. The contract protects against the so-called «consumer terrorists», who know many ways to threaten or pressure pity and thereby reduce the amounts they are obliged to pay for rent almost to zero.

In the contract, we prescribe the address of the rented housing (the type of housing and information about the owner must be specified in total). Be sure to double-check the information defined in the contract so that both the owner's/ tenant's ID (passport data, etc.) and the data for the house match.

It is necessary to clarify how and when the rent will be paid and the amount. How many months in advance will the renter pay? Monthly? Per quarter? A year in advance? This format is gaining popularity, but we highly recommend not paying 12 months in advance: if something happens, it will be very difficult to return it.

The rent payment period should also be clearly stated: for example, «on the 5th of each calendar month» or «from the 5th to the 10th of the calendar month».

It is necessary to specify the details of the rent increase rate in the contract. For long-term contracts, it is recalculated annually. Monthly payment renegotiation should not exceed the official figure. In October 2021, this was 16.42%. Almost 16.5%-this is quite a lot: the indicators of the previous months were kept within a little over 14%.

If a deposit was made during the time of the rent agreement, this should be indicated in the contract. You should mention separately and in detail:

  • whether it will be refunded or credited as payment for the last month of stay;
  • in what cases it is not returned in full or in part (for example, in case of repair of damaged furniture or appliances; or failure to fulfill the conditions of termination of the contract – for example, tenants suddenly decided to move out three weeks after they arrived).

By law, rental payments must be transferred to the bank of the landlord's account or the PTT account (via mail). Therefore, the owner's account number must also be specified in the contract.

If you, together with the tenant, decide to pay in cash, check with a lawyer how to do this accurately (laws in Turkey change very often) and how both sides will record the transfer of money. Different judges react differently to the receipt: for some, it is not proof; for others, it is indisputable proof.

As a result, a «consumer terrorist» can fabricate a receipt with your signature on accepting payment for a year in advance, and you will be tormented in court to prove that you did not write it. The same graphological examination in Turkey is costly.

Utility bills as a component of rent and other nuances

It should be decided who will pay the fees, etc.

The renter is obliged to bear the operating costs, such as heating, lighting, and water, unless otherwise stated in the contract.

The party bearing the costs must provide copies of the documents confirming the payment to the other party upon request.

Mandatory earthquake insurance in accordance with the law must be covered by the house owner (owner).

However, it will be beneficial to specify how such expenses as electricity and water will be covered in the contract. For example, the owner takes care of everything, and the renter has «no headache». Or vice versa: the renter pays IDAT and the amounts according to the meters, reporting to the landlord monthly.

Accordingly, it is possible to prescribe in the contract that the renter pays for water and electricity in addition to the amount for accommodation. You or your representative will need to regularly check the payment of bills by the renter or take the appropriate amounts from the renter to pay for the communal service.

With non-payment for communal services in Turkey strictly: electricity can be turned off literally in a day.

The terms of the rental agreement and the articles on repairing the tenant's house also need to be clarified in the text.

Suppose the rented house has debts, such as contributions, water, electricity, and natural gas, for the previous period (from the former tenant). In that case, the owner should add a clause stating that these debts do not «fall» on the new renter.

How much do you need to deposit as collateral?

A deposit is a temporary guarantee provided to compensate for possible damage to the rented house in the period after the end of the rental period in exchange for rental obligations.

The deposit amount is legally limited by the legislation of the Republic of Turkey and cannot exceed the rent for 3 months.

Can the renter count the deposit as the last rent agreement? Although this situation does not fully comply with the letter of the law, sometimes the renter who believes that he has been mistreated may not pay the last rent and ask the landlord to deduct from the rent because he will not be able to get his deposit back.

However, under normal conditions, the renter cannot demand that the deposit be counted as rent; this is decided only by the parties' agreement if the landlord does not mind.

If the housing has damage, in addition to withholding the deposit, the landlord may require the renter to pay for damage to repairs, furniture, equipment, etc. In case of non-payment, the lessor has the right to file a lawsuit in court.

How to ensure protection for an investor with rental units

The renter decided to move out; how to rent-to accept real estate

Advice to the renter: We recommend keeping the apartment in order and eliminating minor breakdowns like a cracked outlet. Otherwise, the amount that the owner wishes to deduct from the deposit may exceed these costs and much more.

The better the condition of the rented housing, the higher the chance to get your deposit back safe and sound, without deductions.

Take photos of the house's condition, the condition of the lamps, and the latest meter readings; forward it all to the owner.

When acquainted with them, compare the photos «before» and «after» and draw up an act of acceptance of housing.

Determine whether something needs to be compensated (in the sense of damage). If both parties agree, draw up an official document, which will indicate how much the landlord will transfer to you after the costs are deducted from the deposit.

If there is a disagreement between the owner and the renter, draw up a written document and attach photos of the «disputed points».

For the owner, all these tips are also relevant.

Let's clarify that following the «action plan» presented above can significantly protect you from unscrupulous partners (tenants or landlords) even at the stage of processing all these documents and lists: seeing that the second party approaches the issue extremely carefully and fixes everything, scammers will most likely prefer not to get involved.

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