Turkmenistan’s recent rushed decision to declare war on delinquent landlords has backfired with embarrassing results and reportedly ended up with the ambassador of a friendly nation being cast out onto the street.
The story began on February 5, when President Gurbanguly Berdymukhamedov grumbled at a Cabinet meeting about the lack of regulation in the buy-to-let business.
On one hand, it was good that Turkmens have grown so affluent that they are able to buy multiple apartments, the president appeared to argue, but the government should be getting its cut too.
Berdymukhamedov criticized chiefs of police and local governments for failing to tackle the problem and demanded that a formal system be imposed for apartment rental, so as to bring the business into line with the law.
The hearts of apartment-owners will doubtless have sunk when he went on to insist that anybody renting apartment would, even for short stays, be obliged to obtain the dreaded propiska — the residency permit devised back in the days of the Russian Empire. Short-term propiskas have not until now been mandatory, not least since non-residents of the capital have found it impossible to get them.
Landlords will now have to register properly with the tax office. Presumably, most have until now been paid in cash and avoided mentioning their income to the authorities, although no data on the matter is readily available.
Top officials have been ordered to draw up an inventory of residential properties in the capital, Ashgabat, so the authorities can properly systematize the rental sector.
So far, so good.
And then on February 15, Radio Free Europe/Radio Liberty reported that numerous foreigners, including a high-ranking diplomat in the Belarusian Embassy and several employees of international companies, found themselves turfed out of their apartments.
As the RFE/RL report explained, police appear to have interpreted instructions to crack down on irregular rentals a little too energetically and did not bother waiting around for clear rules to be drawn up.
Gangs of police and security service officers went from door to door, ordering entire families to pack up and vacate the premises within a few hours unless they could provide the necessary paperwork.
The offended parties swiftly put in irate phone calls to the Foreign Ministry, which had to shamefacedly orchestrate a reversal of policy to avoid a diplomatic incident.
But as RFE/RL reported, while the situation with diplomats might have been cleared up quickly, lots of private citizens are still being forced to stay in hotels or at their offices.
This kind of decision-making is standard in Turkmenistan and promises to make life a misery mostly for the law-abiding. Many people rent out their old apartments to help keep with mortgage payments on their new homes, so it is not exactly the lucrative business that Berdymukhamedov has described.
Those wishing to fall into line with the new rules must now jump through a whole range of bureaucratic hoops, beginning with registering with the taxman through to working out how to get propiskas for short-term tenants.
Many tenants are prepared to forgo the complications, since they are not the ones that will likely face the penalties should the authorities find out.
As a result, landlords willing to take the risk of operating illegally will make a killing, while those embarking on the quixotic task of wading through the red tape will for now remain empty-handed.