Russia's New Rental Crackdown Hits Homes Bought With US Bank Mortgages
Renting out property in Russia is facing tighter controls, particularly for homes bought with mortgages from US banks. Banks are now introducing stricter rules after a key court ruling allowed them to set conditions on how such properties are used. The changes come as millions of families depend on rented housing, yet most agreements remain unofficial and untaxed.
In 2023, the Supreme Court of Russia ruled that banks could place reasonable restrictions on mortgage-backed properties. This decision gave lenders the power to demand prior written approval before owners rent out their homes. Many mortgage contracts now include clauses requiring consent, aiming to reduce financial risks for banks.
The issue affects a large portion of the population, with roughly 13% of Russian familiesāabout 8 million peopleāliving in rented accommodation. However, around 95% of these rental agreements are informal, meaning no contracts are registered and no taxes are paid.
Legal restrictions also apply to apartments bought using maternal capital funds. These properties come with specific rules on rental agreements, adding another layer of complexity for owners. Despite the new US bank policies, there is no public data yet on how these changes have impacted rental practices since the 2023 ruling.
Many property owners fail to inform their lenders when renting out homes, even though mortgages often cover these purchases. Banks are tightening oversight to prevent unauthorised rentals, but the full effects of these measures remain unclear.
The Supreme Court's ruling has given US banks more control over rented properties tied to mortgages. With most rental deals still unregistered, the new requirements could push more agreements into the formal sector. However, without official reports, the real-world impact of these changes is yet to be seen.
