
15. Does Islamic law impact the structure of property contracts or sales processes?
The Lebanese law follows the French law considering Lebanon was under the French mandate. Therefore, laws in Lebanon governing all legal actions, rights, and responsibilities specifically property contracts or sales processes are not impacted by Islamic law, they are explicitly subject to Lebanese law. However, in a case where a Lebanese Muslim owning property in Lebanon dies, Islamic law governs the distribution of inheritance for the beneficiary.
16 . What are the key differences between legislation on leasing in this jurisdiction and other jurisdictions?
The Lebanese rental market is divided into two broad categories: (1) the old controlled market, and (2) lease contracts signed after 23 July 1992.
Leasing can be freely agreed between landlord and tenant only in contracts signed after 23 July 1992. These contracts are governed by the leasing contracts’ chapter in the Code of Obligations and Contracts, whose main feature is contractual freedom.
Contracts relating to real estate property signed before the date above are not free as to rents signed before 1992. They are not covered by the Code of Obligations, but instead by Temporary Law No. 160 (promulgated 23/7/1992), which systematized the ‘temporary’ rent control provisions which applied in previous years.
Rent contracts for real property exceeding three years must be registered in the real estate registry.
Contracts signed after 23 July 1992
In this case, the tenant who signed a one-year contract has the right to hold onto the property for three consecutive years. This clause is implied in all rental contracts by article 543 of the Code of Obligations and Contracts, and cannot be avoided. Thereafter, the landlord is entitled to end the contract or renegotiate it.
Excluded from this rule are:
- Seasonal rent contracts for summering and wintering places.
- Rent contracts of places presented by employers to their employees.
If the tenant benefiting from an extension desires to leave, he should notify the landlord two months before the end of the extended period, by registered exposed mail, or via a notary.
Certain other terms are implied in contracts signed after 23 July 1992, but these terms can all be specifically varied by contract:
- The landlord pays taxes and other dues unless otherwise agreed.
- Subletting is allowed for the same use unless otherwise stipulated in the contract. The secondary tenant is responsible for the landlord. The landlord may pursue the original tenant, or the secondary tenant, in which case the original tenant maintains the right to intervene.
The contract is canceled if the tenant uses the place for a purpose different from that stipulated in the contract, or neglects the place so that serious damage results, or if the tenant does not pay due rent.
The contract does not end upon the death of the tenant or the landlord.
Contracts signed before 23 July 1992
In this case, the tenant has the right to continuously renew the contract for the lifetime of Law 160, with rent increases according to predetermined formulae.
Law 160 excludes:
- Rental contracts for agricultural lands and attached buildings
- Seasonal rents of summer and winter places
- Dwellings are provided as part of the work contract to employees, whether free or for pay.
- Rent contracts of villas built after March 25, 1974
- Contracts of state and municipal properties
- Contracts of furnished places specified as ‘touristic’ (Art. 2)
The contract is terminated, and the tenant may be evicted, in the following cases:
- Non-payment of rent for two months after being legally notified.
- Abuse of the property causing damage beyond ordinary use, or violating contract conditions without the written approval of the landlord.
- Total or partial concession of the property, without the written approval of the landlord.
- The tenant acquired an equivalent residential place, within a distance of seven kilometers.
- Leaving the property for other than security reasons for a full year without interruption, while paying the rent, and for 6 months, while not paying the rent.
- For non-Lebanese, leaving the property for six months without interruption. (Article 10 of law 160/90)
In case of the death of the tenant, or if he leaves the rented dwelling, he can be replaced by his spouse, his ascendants, and his children who continue to live in the dwelling, i.e. relatives who entered the dwelling at the beginning of the contract and continue to live therein (article 5 of law 160/90)
The tenant may not sub-let except with the consent of the landlord in writing, or unless stipulated in the conditions of the contract (Article 7 of law 160/90). In case of full or partial sub-letting with the landlord’s approval, the rental relationship remains a relationship between the landlord and the original tenant. The secondary contract period ends with the original contract.
The landlord may terminate the contract and regain the property, if:
- The landlord, or a member of his/her direct family, needs the dwelling for personal use, provided he/she does not own another equivalent property in the same municipal area.
- The landlord intends to demolish the building and reconstruct the property.
In both cases, the landlord should pay the tenant damages of not less than 25% and not more than 50% of the property value (article 8 of law 160/90).
17 – What are the main points for lessors to check when reviewing a lease?
In the case of a lease contract the leasers must check the following main points when reviewing a lease since they do vary according to the concerned parties:
– The identity of the lessee.
– The rental fee as well as the payment method
– The lease period
– The Private conditions governing the party’s relationship for reference in case of ruin, breaking, or the non-payment of the required fees.