What Is a Purchase Agreement (Gholnameh)?

What Is a Purchase Agreement (Gholnameh)?

A gholnameh is a private agreement executed between a buyer and a seller that records the parties’ commitment to transfer ownership at a later stage. By contrast, an official deed is a document prepared by a notary public or a competent authority, such as the Registration Organization, and it carries a stronger legal effect, including enforceability and evidentiary weight.

Under Iran’s registration framework and related legislation, an official deed prevails over private instruments. In addition, pursuant to the 1403 law on the mandatory execution of official deeds for real estate, courts are required to give effect primarily to official deeds, and a private purchase agreement on its own is not treated as conclusive proof of ownership. As a result, where a property has been purchased solely through a gholnameh, the buyer may face serious difficulties proving ownership in court unless specific supporting circumstances exist, such as delivery of possession and full payment of the purchase price.

The principal difference between the two lies in their legal authority and enforceability, which is often decisive in real estate disputes.

What Are the Risks of Buying Property Only With a Gholnameh?

Purchasing real estate through a gholnameh without obtaining an official deed is among the highest-risk transaction methods in the Iranian property market. The buyer may face multiple serious exposures.

First, the buyer may be unable to prove ownership in judicial proceedings, since under the 1403 framework, a gholnameh alone is not sufficient proof of ownership, and courts primarily rely on official deeds. Second, the property may be sold again to other parties, as a seller can issue multiple private agreements for the same property, and there may be no reliable official mechanism to identify the earliest buyer. Third, the property may be seized by the seller’s creditors before the official transfer is completed, because the buyer is not yet recognized as the registered owner.

Additional issues, such as a lack of a completion certificate, missing tax clearance, or municipal debts, can also invalidate or significantly complicate the official transfer process. Accordingly, relying solely on a gholnameh without completing the formal legal steps, including official inquiries and execution of an official deed, is typically costly and risky.

Does a Gholnameh Have Legal Value in Court?

The 1403 legislation states that courts should give effect only to official documents in real estate disputes. This does not mean a gholnameh has no value in all circumstances, but it generally cannot function as an ownership deed on its own.

If a buyer relies on a gholnameh to establish ownership, the court may consider it only where there are supporting factors such as delivery of the property, full payment of the price, and the absence of third-party claims. The overall purpose of the new framework is to increase transparency in property transactions and reduce land grabbing, forgery, and conflicting transactions.

In practice, even in actions seeking compulsory execution of an official deed, the transaction often must first be recorded through the relevant official systems and then converted into an official deed. Otherwise, the claim may not be admissible. Therefore, reliance on a gholnameh alone is no longer sufficient for most property claims, and parties should prioritize obtaining an official deed.

What Problems Arise When Ownership Is Transferred Without an Official Deed?

Where a property is traded only through a gholnameh, the buyer cannot register ownership in their name and therefore is not treated as the official owner. This creates major limitations, including the inability to secure a loan, conduct an official sale, transfer by inheritance without complications, or obtain permits for construction or renovation.

Another serious risk is that the seller may resell the property, because the official registry still shows the seller as the owner until the deed is formally transferred. If the property is subject to competing claims or creditor action, the buyer’s legal remedies may be limited. Under the 1403 approach, without an official deed, the buyer may also face obstacles in pursuing certain remedies through registration procedures.

For these reasons, the safest method for lawful ownership transfer is to execute an official deed at a notary public’s office and register it through the required systems.

The Risk of Selling the Same Property to Multiple Buyers Through Private Agreements

One of the most serious risks in gholnameh-based transactions is the possibility of conflicting sales, meaning the same property is sold to multiple buyers through separate private agreements. Because a gholnameh is a private instrument and is not recorded as an official ownership transfer in the national registration system, a seller may attempt multiple transfers to different persons.

In such circumstances, the buyer must often pursue a lengthy and costly court process to prove priority, and the outcome may be uncertain. Under the 1403 framework, only an official deed provides definitive proof of ownership. Even if a buyer succeeds in court, they typically must still pursue formal proceedings to compel execution of an official deed, which involves time, cost, and procedural complexity. Preventing these problems is best achieved through executing an official deed.

Inability to Obtain Mortgage Loans or Bank Facilities

A buyer who has purchased property only through a gholnameh generally cannot obtain bank financing for that property. Banks and financial institutions typically lend only against properties with an official deed registered with the Registration Organization. A gholnameh is usually not accepted as valid collateral, and in many cases, banks will not treat it as sufficient even for evaluating the property’s legal status.

Lack of an official deed can also prevent access to financing used for construction participation or development arrangements. Over time, this reduces the property’s economic utility because the buyer lacks official tools to prove ownership and secure financing. Therefore, the absence of an official deed affects both legal protection and financial usability.

How Can an Official Deed Be Obtained?

To convert a gholnameh into an official deed, the buyer typically files a claim for compulsory execution of the official deed in court. The Gholnameh and additional evidence, such as payment receipts and proof of delivery of possession, commonly support this claim. If the seller refuses to cooperate, the court may, after verifying authenticity and confirming the transaction requirements, issue an order requiring execution of the official deed.

Once a final judgment is obtained, the buyer may proceed through the Registration Organization to complete the official transfer. Under the 1403 framework, this process may require that the transaction and property information be recorded in the relevant official systems before the matter can proceed to formal deed execution. In addition, the buyer will typically need municipal and tax clearances, and where applicable, social security clearance for commercial uses, along with a certificate of no building violation. Without these steps, a notary’s office will generally not execute the official deed. The process is often complex, but it is necessary.

What Are the Hidden Risks of Handwritten or Informal Paper Agreements?

Handwritten gholnamehs drafted without legal guidance often carry the greatest legal risk. They frequently omit essential information such as the property’s registration plaque number, the parties’ legal status, termination conditions, financial obligations, delivery date, the obligation to execute an official deed, and remedies for breach.

In many cases, agreements lacking proper signatures, fingerprints, or credible witnesses may be rejected by courts. Even where a gholnameh is deemed valid, failure to record it through official channels or a conflict with an official deed may defeat the buyer’s claim. Under the newer legal approach, only documents executed and registered through official channels carry the strongest legal effect. To reduce risk, buyers should use properly drafted agreements prepared by reputable professionals and ensure the transaction is linked to the relevant official registration systems.

Why Legal Inquiries Must Be Obtained Before Buying

Before purchasing any property, even when a gholnameh is used, obtaining legal inquiries from relevant authorities is essential. These inquiries commonly include the municipality for completion certificates and building violations, the Registration Organization to confirm ownership and check for seizure, the tax authority for tax clearance, and banks to identify mortgages or detention records.

A frequent problem in gholnameh transactions is that the property may carry debts, bank mortgages, or legal conflicts that are not disclosed in the agreement. Without proper inquiries, even if possession is delivered, the buyer may later be unable to execute an official deed or resell the property lawfully. Under the 1403 approach, notary offices generally do not execute official deeds without complete inquiries. Therefore, legal inquiries are not only risk-reducing measures but also the first practical step toward a secure and lawful transaction. As a matter of prudence, inquiries should be obtained before any payment or signature.

The Only Reliable Option Is an Official Deed

Given the legal framework and judicial practice reflected in 1403, purchasing property solely through a gholnameh is highly risky. A gholnameh alone does not reliably secure ownership, protect investment, or provide full access to legal rights. While in limited circumstances the buyer may be able to compel the seller to execute an official deed, that legal route can be time-consuming, expensive, and uncertain.

The most reliable way to prevent conflicts, seizures, confiscations, and tax or legal complications is to execute an official deed at a notary public’s office. Buyers should register the transaction, obtain the required inquiries, and proceed to an official deed as soon as possible. In recent years, relying on an official deed has become not merely a prudent choice but a legal necessity.

Frequently Asked Questions About Gholnameh