A Legal Examination of the Judicial Approach to Establishing Ownership of Immovable Property through Informal Documents

Abstract

Many of the cases brought before the judiciary directly or indirectly stem from real estate transactions conducted through informal (non-notarized) documents. Despite the significance of such disputes and the legislature’s efforts to eliminate ambiguities, judicial practice continues to exhibit conflicting decisions and uncertainty regarding the legal fate of transactions involving this category of property. In Iranian judicial practice, the relative predictability of legal proceedings—one of the hallmarks of a developed legal system—is largely absent in cases concerning real estate transactions conducted through informal instruments. The divergence in judicial approaches is such that one court may consider the transaction void, while another deems the same informal contract valid. Under such conditions, reconciling the rights of the contracting parties with those of third parties becomes highly complex. In our view, the concept of the “unenforceability” of an informal contract can provide a balanced legal sanction in interpersonal relations. This concept renders the contract effective between the two parties while preventing claims against third parties, except where the third party had prior knowledge of the informal agreement. Properties registered in the Land Registry Office of the Organization for Registration of Deeds and Properties are called registered properties, whereas unregistered properties have not completed the legal procedures such as public notice, declaration, or objection stages. A claim for eviction of possession (khal’-e yad) is admissible only with respect to properties that possess an official title deed, whereas a claim for usurpation of possession (tasarrof-e adva’ni) is unrelated to ownership verification and concerns only the matter of physical possession.