Russians can rent apartments with a mortgage, but some mortgage banks do not allow this without prior permission, real estate lawyer Irina Nigmatullina told socialbites.ca.
“The good news is that banks rarely exercise their right to audit. They do not have the resources for this; they will have to create special control departments with a large staff of inspectors. But at the same time, if the debtor does not pay the bank, the apartment will become the property of the bank, and all problems with the tenant will have to be resolved by the bank,” the lawyer explained.
Therefore, he recommended informing the bank in advance that the apartment will be rented out. According to Nigmatullina, there will most likely be no refusal: the bank is interested in the borrower receiving additional income.
The lawyer warned that if the credit institution was not warned about renting the apartment, the bank has the right to demand early repayment of the entire amount of the mortgage loan from a person, together with interest and penalties, and found out about it on its own. In such a case, the borrower will be in violation of the loan agreement.
Nigmatullina advised that it is mandatory to inform the bank about the apartment rental if it is a daily option. In this case, the bank sees the tenant’s activities (complaints of neighbors about noise, contacting the police, etc.) as a business that also carries risks. The lawyer explained that in such cases the bank may demand an increase in the mortgage interest rate before the rental permit is issued. According to him, hiding the daily rent from the bank is much more difficult than hiding the monthly rent.
Nigmatullina emphasized that if a person rents a mortgaged apartment, the bank is interested in the legal activities of the borrower. This means that a person must pay taxes, obtain the status of an individual entrepreneur or freelancer, and report to the tax service. The lawyer concluded that the bank may request a formal agreement in exchange for the consent of the landlord.
Previously reported Housing rents in Russia are becoming more expensive.
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Source: Gazeta
Ben Stock is a business analyst and writer for “Social Bites”. He offers insightful articles on the latest business news and developments, providing readers with a comprehensive understanding of the business world.