Endowment Property Deeds
People usually create endowments for various purposes. The most common endowments are for charitable and benevolent objectives, such as building hospitals, schools, or other projects intended by the endower. The person responsible for managing and administering an endowed property is called the trustee.
Under Iranian law, there are two types of endowment:
• Public endowment.
• Private endowment.
What Is an Endowment and What Are Its Types?
Public Endowment
A public endowment is not dedicated to a specific person or limited group, but is intended for the general public. In this type of endowment, the trustee of the endowed property is the local Endowment Organization where the property is located. Examples include endowments for mourning ceremonies or for building schools.
Private Endowment
In another form, the endower may dedicate land or property to specific individuals. In such a case, the endowment deed must clearly specify how the endowed land is to be allocated among them, and the endower must appoint a trustee from among those individuals. If no trustee is appointed, they must choose one among themselves. Ultimately, if no trustee can be identified, the Endowment Organization becomes the trustee by law.
All endowed properties have official deeds. Construction may be carried out on them, and the superstructure may be bought and sold. However, with respect to the underlying land, only leasehold rights exist, and ownership of the land itself is not transferred to private individuals.
How to Obtain an Official Deed for the Superstructure
Assume that the endower has endowed only the land and no building exists on it. In such a case, any person may, after obtaining the trustee’s permission, construct a building on the endowed land and apply for an official deed for the superstructure. In this situation, the builder must conclude a lease agreement with the trustee so that, from a legal and religious perspective, the use of the endowed land is authorized. Upon expiration of the lease term, the trustee may require the owner of the superstructure to renew the lease.
Sale of the Superstructure
If the owner of the superstructure wishes to sell the building constructed on endowed land and already holds an official deed for it, they must first obtain the trustee’s consent. In public endowments, the trustee is the Endowment Organization, and in private endowments, the trustee is the person designated in the endowment deed.
Previously, certain regulations required payment of a transfer fee known as “pazireh” before the Endowment Organization would approve the transfer. However, pursuant to a unifying judgment issued in 2018, the Endowment Organization’s collection of such fees has been annulled. Currently, the Endowment Organization is only required to conclude a new lease agreement with the new purchaser.
Permission of the Trustee
In private endowments, transactions must be conducted in accordance with the trustee’s instructions. Usually, when a lease agreement is executed, it specifies how the owner of the superstructure may later transfer it. If the lease does not require the trustee’s consent to a transfer, there is no need to obtain consent, and it is sufficient to enter into a new lease with the purchaser. However, if specific conditions are stated, both buyer and seller must strictly comply with them.
Difference Between an Endowment Deed and a Private Ownership Deed
Endowment Deed
An endowment deed does not grant full ownership rights. The holder must pay periodic rent to the Endowment Organization and must obtain its permission for any transfer or major transaction. In reality, holders of endowment deeds own only the superstructure and hold a lease over the land. Therefore, the buyer becomes the owner only of the superstructure and acquires no ownership rights over the land itself. Such property cannot be transferred without authorization, and any changes require multiple administrative steps before the Endowment Organization.
Private Ownership Deed
Private ownership deeds grant full ownership rights. They are issued as complete title deeds, and the owners’ identities are officially registered. These deeds must be executed and recorded at a notary public office; they have no legal validity.
Frequently Asked Questions About Endowment Property Deeds
An endowment is the dedication of property for charitable or benevolent purposes. There are two types: public endowment, intended for the general public, and private endowment, designated for specific individuals or groups.
The trustee is the person or entity responsible for administering the endowed property. In public endowments, the Endowment Organization acts as trustee. In private endowments, the person appointed by the endower serves as trustee.
After obtaining the trustee's permission, a person may construct a building on endowed land and, by entering into a lease agreement with the trustee, obtain an official deed for the superstructure.
For public endowments, no transfer fee is required, and the owner may transfer the superstructure, provided a lease agreement is entered into with the trustee. In private endowments, the trustee’s opinion and the terms of the lease govern the transfer, unless the contract clearly states otherwise.
An endowment deed grants ownership only of the superstructure and requires the Endowment Organization's permission for transfers. A private ownership deed grants full ownership rights and is officially registered with a notary public. What is an endowment, and what types does it have?
Who is the trustee of endowed property?
How can one construct on endowed land and obtain an official deed?
Can the owner of the superstructure sell it without the trustee’s consent?
What is the difference between an endowment deed and a private ownership deed?
