Sales Regulations for Housing, Office, Retail & Leasing in Iran

Posted on Posted in Business Guidelines

For selling Residential, Office, and Retail building, there’s no needed permission if you have official completion certificate of the building issued by municipality. But for pre-sale, it’s needed to follow Presale Regulations.

Presale of Buildings (Residential, Office, and Retail) follows the law passed by parliament in 2010. Based on presale law, developer should perform the conditions as below:

  • Owner of the land could sign presale agreements with pre-buyers. But if the owner has signed agreement with developers or investors to build on the land and take ownership of parts of building units, the developers or investors could also Presale their own share
  • Also tenant who has right to build on the land due to agreement with land owner, could presale his/her constructed building
  • In presales agreement, all details of under construction units should be specified precisely.
  • Price, installments, and conditions of payment should be specified precisely.
  • The exact time of delivery should be specified.
  • Duties of pre-seller for receiving legal permits from municipality and other organizations should be specified.
  • Responsibilities for damages and losses should be specified
  • Agreed arbitrators should be specified in the agreement.
  • Presales agreement should be prepared in official Registry offices. Registry office requires some documents such as Responsibility Insurance of Building, Construction Permits, Ownership Documents, and Verification of completion of Building Foundation signed by Consulting Engineer of Building.
  • For non-Residential Buildings, if pre-seller has accepted commitments instead of issuing construction permit ( for example, perform some public services like constructing a public parking), for the start of presales, the pre-seller should complete at least 30% of the project and it must be verified by legal authorities such as municipality.
  • Pre-seller must pay late penalty if he delivers the project after agreed times.
    • If pre-seller delivers units and related items such as parking lot, he should pay late penalty which equals renting price until delivery.
    • If pre-seller didn’t finished public sections, he must pay 0.5% of update price of undelivered items in proportion to the shares of pre-buyer of total project.
    • If pre-seller didn’t transfer official ownership documents in an official Registry office in proper time, he must pay late penalty which equals 0.1% of agreement price daily
  • If the delivered unit would be smaller than the agreed one more than 5%,, pre-buyer could bring back the unit or demand loss costs.
  • Number of installments could be set by mutual agreement, but at least 10% of total price of unit should be postponed to the time when ownership documents are transferred.
  • If the speed of construction activities is less than agreements, pre-buyer can postpone installments payments until receiving verification of Consultant engineer of the project, and consultant engineer should respond to the demands of pre-seller or pre-buyer in maximum one month.
  • If pre-buyer didn’t pay the installments, pre-seller should inform the registry office, and registry office must send a warning letter to pre-buyer to pay in maximum one month, otherwise pre-seller could terminate the agreement officially.
  • Pre-seller should receive official permissions from Ministry of Roads &Urban Planning for advertisement of presale.


FAR Law Firm

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