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Iran’s rental market continues to face economic pressures, but recent legal developments offer stronger protections for tenants. Through the Law on Organizing the Land, Housing, and Rental Market combined with the latest decree from the heads of government, authorities have capped residential rent increases at 25% nationwide for 1405 (2025-2026). Any demand beyond this limit is considered unlawful.

Understanding Lease Renewals This Year Renewal is not mandatory and depends on the tenant’s request. Contracts expiring from June 20, 2025 onward until the end of the year qualify for this protection. Landlords cannot exceed the 25% threshold relative to the previous agreement. This national rule overrides earlier provincial limits and seeks a fair balance for both parties.

That said, the law is not one-sided. Owners retain the right to seek eviction under specific justified circumstances, such as having official permits for demolition or major repairs, selling the property officially, proving genuine personal/family need through court, or when the tenant has significantly breached obligations.

What If the Landlord Demands More Than Allowed? A key advantage for tenants is the five-year window to file a claim, even after the lease ends. According to the relevant notes in Article 7, upon proving a violation the landlord must:

Refund the full excess amount paid.

Pay a fine equivalent to three times the unauthorized monthly increase.

Forfeit certain tax benefits.

Real estate agents also bear responsibility. They are required to review previous contracts and adhere to the cap. Failure to do so can result in heavy Tezirat fines and temporary or permanent bans from operating.

Step-by-Step Action Plan To effectively protect your rights, follow these practical steps:

Compile Strong Evidence: Keep both old and new leases (with tracking codes), payment proofs, correspondence, and related documents.

Start with Dialogue: Many issues resolve through respectful conversation.

Issue a Formal Notice: Use electronic judicial offices to send an official warning.

File a Formal Complaint: Submit your case to the local Dispute Resolution Council.

Report Agent Misconduct: If a brokerage was involved, file a separate report with the State Inspectorate (Tezirat).

Always verify the official approved rate through trusted platforms like the Self-Service Lease System before taking action.

By understanding these protections, tenants can confidently address unfair demands. For legal and property consultations, feel free to contact us.