Tenant not paying rent: how to recover arrears and terminate the lease in Uzbekistan

If a tenant has not paid for three months in a row, you can go to court to recover the debt and terminate the lease at the same time, and then have the tenant evicted — also under a court decision. For an office, shop or other non-residential property, three missed payments in a row are usually enough. For a flat let on a long-term basis the rules are stricter. Below: what to do before court, which grounds for termination the law and the contract give you, what a claim costs and what to do if the lease was never properly documented.

What kind of lease do you have: a flat or non-residential premises

The grounds for termination depend on it. The Civil Code has general rules on property lease that apply to offices, shops, warehouses and equipment (Articles 535–556), and a separate chapter on residential tenancy (Articles 600–616).

• A flat or house to live in. The agreement must be in writing, and between individuals it must be registered with the tax authorities (Article 603). If no term is stated, the tenancy is deemed to be for five years. A tenancy of up to one year counts as short-term (Article 612).
• Non-residential premises, equipment, vehicles. A lease for more than one year, and any lease involving a legal entity, must be in writing (Article 539). A lease of real estate must be state-registered and recorded with the tax authorities, except where the law provides otherwise. A lease of a building or structure for one year or more is deemed concluded from the moment of state registration (Article 574).

When does the law allow termination for non-payment

Non-residential premises and other property. A court may terminate the lease early at the landlord's request if the tenant has failed to pay by the contractual due date more than twice in a row (Article 551). With monthly payments, three consecutive missed payments are exactly that situation. The contract may also provide for other grounds.

A flat. A court terminates a residential tenancy if the tenant has not paid for six months (the contract may set a longer period). If the tenancy is short-term, i.e. up to one year, it is enough that the tenant has failed to pay more than twice after the due date (Article 615). Many flats are let for 11 months, and then three months of arrears are already grounds.

Check the contract itself too: it may allow one party to withdraw unilaterally. If the law or the parties' agreement permits such withdrawal, the contract is deemed terminated without going to court (Article 382 of the Civil Code). But a tenant who refuses to leave can still only be evicted under a court decision.

What to do before going to court

Under Article 551 of the Civil Code, a landlord may demand termination only after a written warning and a chance for the tenant to put things right. And under Article 384, you can go to court to terminate only if the other party has refused, has not replied within the stated period or, if no period was stated, within 30 days.

1. Calculate the debt: which payments were missed, the amounts and dates. Add the contractual penalty if there is one.
2. Draw up a written demand: the amount owed, a payment deadline, a warning that you will seek termination if it is not paid, and an offer to terminate the contract.
3. Send it by registered mail with acknowledgment of receipt or hand it over against a signature. Send a copy by messenger as well.
4. Wait for the deadline stated in the demand, or 30 days.
5. Record the condition of the premises: photos, video, meter readings.

Do not change the locks or remove the tenant's belongings yourself. Taking the law into your own hands can lead to liability — up to Article 229 of the Criminal Code on arbitrary action if serious harm is caused.

How to recover the debt through the courts

The fast route — a court order

A claim for rent not paid by the dates set in the lease can be dealt with by a court order (Article 171(7) of the Civil Procedure Code). A judge issues the order within three days without a hearing. But if the tenant sends objections within 10 days, the order is cancelled and you will have to file a claim (Article 181). A court order cannot terminate the lease or evict the tenant: that requires a full claim.

A claim for the debt and termination

The claim is filed with the civil court for the tenant's place of residence (Article 33 of the Civil Procedure Code). If both parties are entrepreneurs or companies and the dispute relates to their business, the case goes to the economic court. In a single claim you can ask for:

• the unpaid rent;
• the contractual penalty (Article 260 of the Civil Code) or, if there is none, interest for the use of another's money (Article 327);
• termination of the lease;
• eviction and return of the premises;
• payment for the whole period during which the tenant fails to return the premises after the lease ends (Article 554).

State fee in a civil court: for a money claim, 4% of the amount, but not less than 1 BCA (base calculation amount). For terminating a residential tenancy and other non-monetary claims, 2 BCA, i.e. 880,000 soums (annex to the Law "On State Duty"). If the court grants the claim, the tenant reimburses the costs.

Example. Suppose you let a shop for 8 million soums a month and the tenant has not paid since July. By October, three consecutive payments have been missed — 24 million soums. The fee for the money claim is 960,000 soums (4% of 24 million), plus a separate fee for the termination claim (check the amount for commercial premises with the court office). If you also claim a penalty, it increases the value of the claim.

If there is a risk that the tenant will remove property or move money away, ask the court together with the claim to freeze their property or bank balances (Articles 105–106 of the Civil Procedure Code).

Eviction: only through the court and the enforcement officer

Once the lease is terminated, the occupants are evicted on the basis of a court decision (Article 616 of the Civil Code). If the tenant does not leave voluntarily, the decision is enforced by the Bureau of Compulsory Enforcement. The officer gives notice of the date and time in advance, carries out the eviction in the presence of attesting witnesses and makes an inventory of the property. The absence of a debtor who was notified of the eviction date does not prevent it. Belongings the tenant leaves behind are stored at the tenant's expense (Article 73 of the Law "On the Execution of Judicial Acts and Acts of Other Bodies").

If there is no contract or it was not registered

A missing contract or registration does not release the tenant from paying. If the lease is found not to have been concluded or to be invalid, the person who used the premises must pay the value of that use in money (Article 114 of the Civil Code) and return what they saved at your expense as unjust enrichment (Article 1023). The amount is usually based on the rent the parties actually agreed or on the market rent.

Evidence is the harder part. Where the law requires written form, you cannot rely on witnesses, but you can rely on written and other evidence (Article 109 of the Civil Code). Useful items:

• bank transfers of rent for previous months;
• messages about payment, keys, repairs or the debt;
• a handover record for the keys or premises;
• the rental advertisement and the tenant's messages responding to it;
• utility receipts the tenant paid.

It is best to have messages certified by a notary: a plain printout is not treated as written evidence (Article 89² of the Civil Procedure Code).

Deposit and taxes

Deposit. The Civil Code does not regulate a "deposit" as such, so everything depends on the contract. If it says the deposit covers arrears and damage, keep it and tell the tenant in writing what it was applied to. If there is no such clause, you can set the deposit off against the debt: a set-off of a counterclaim of the same kind requires only a statement by one party (Article 343 of the Civil Code). It is best to show the calculation in your demand letter.

Taxes. An individual's rental income is subject to personal income tax at 12%, calculated on no less than the established minimum rental rates. If the lease was never registered and no tax was paid, this may come up in court. Before suing, it is worth putting things in order, for example by registering the lease via my.soliq.uz.

When to call a lawyer

A simple debt under a written lease can be recovered on your own. A lawyer makes things safer if:

• there is no contract, it was oral or not registered, and the debt has to be proved indirectly;
• the tenant refuses to move out, other people live on the premises, or valuable belongings remain;
• the tenant raises counterclaims: defects in the premises, repairs, offsetting expenses;
• the debt is large and the tenant may move assets away;
• one party is a company or entrepreneur and you need to work out which court has jurisdiction.

Choosing the wrong ground for termination or skipping the warning can lead to a refusal and cost you several months. A lawyer specialising in litigation and debt recovery can help prepare the demand, the calculation and the claim, and see the case through to eviction.

In short

• Non-residential premises: if the tenant misses payment more than twice in a row, that is grounds for termination through the courts.
• A flat: six months of non-payment are required, or more than two missed payments for a short-term tenancy of up to a year.
• Before going to court, send a written demand with a warning and an offer to terminate, then wait up to 30 days.
• Rent arrears can be recovered by a court order, but termination and eviction require a full claim.
• Only the Bureau of Compulsory Enforcement evicts, under a court decision; do not change the locks or remove belongings yourself.
• Even without a contract, the tenant must pay for actual use of the premises.

Photo: Pittigrilli, Wikimedia Commons (CC BY-SA 4.0)