A promise to sell and how it differs from a completed sale
The office of lawyer Ali Barakat in Baghdad sets out the difference between a promise to sell and a completed sale of immovable property, under Civil Code No. 40 of 1951, published in the Iraqi Official Gazette, issue 3015, of 8/9/1951. The page presents articles 78, 90, 91 and 508. It is not a model contract.
The preliminary agreement and a binding promise
A future tense that amounts to a bare promise forms a binding promise if that is what the parties intended, under article 78. A preliminary agreement by which both parties, or one of them, undertake to conclude a specified contract in the future is valid only if the essential matters of the contract to be concluded, and the period within which it must be concluded, are fixed, under article 91, first paragraph. If the law requires a particular form for the contract, that form must also be observed in the preliminary agreement that contains a promise to conclude that contract, under paragraph 2.
If the law imposes a particular form for a contract, the contract does not conclude unless that form is fulfilled, unless a text provides otherwise, and the same form must also be fulfilled for any amendment of the contract, under article 90. An agreement to sell in the future is therefore an agreement whose conditions of validity are set by article 91. It is not the sale that is completed when the sale's elements and form are fulfilled.
A completed sale of immovable property concludes only by registration
A sale of immovable property does not conclude unless it is registered at the Real Estate Registration Department and the form required by law is fulfilled, under article 508 of the Civil Code. That meets article 3 of Real Estate Registration Law No. 43 of 1971: an immovable disposition does not conclude except by registration at the Real Estate Registration Department. If the sale is not registered, a sale of the immovable property does not conclude, even if a paper or an agreement describes the price and the property sold.
The difference appears from that point. A promise, or a preliminary agreement, is an undertaking to conclude the contract in the future, if what article 91 requires has been fulfilled. A completed sale of immovable property is a disposition that transfers ownership, and it does not conclude except by registration. A promise does not take the place of that registration, and neither receipt of the price, nor delivery of the keys, nor a privately written contract, dispenses with it. How to approach a Real Estate Registration Department in Baghdad is explained on the page Real Estate Registration Departments in Baghdad.
Article 91, second paragraph, requires the same form to be observed in the preliminary agreement if the law requires that form for the contract to be concluded. A sale of immovable property is a contract for which registration is required. The page presents that connection between articles 91 and 508 as it appears in the text, without adding a rule that has not been taken from the articles, and without treating every unregistered paper as producing no effect of any kind. Whether a preliminary agreement is valid, and what it produces, is read in the light of the text and the facts of the dispute.
A sale under a power of attorney to which a third party's right is attached is the subject of the page on an irrevocable power of attorney. A power of attorney is not to be confused with the conclusion of a sale by registration.
Legal basis and sources
- Civil Code No. 40 of 1951 (Iraqi Official Gazette, issue 3015 of 8/9/1951) — Articles 78, 90, 91 and 508
- Real Estate Registration Law No. 43 of 1971 (Iraqi Official Gazette, issue 1995 of 10/5/1971) — Article 3
Frequently asked questions
Does ownership of immovable property pass merely on the signing of a promise to sell or a privately written contract?
No. A sale of immovable property does not conclude unless it is registered at the Real Estate Registration Department and the form required by law is fulfilled, under article 508 and article 3 of the Real Estate Registration Law. A promise, or a privately written paper, does not take the place of that registration.
When is a preliminary agreement to conclude a sale in the future valid?
It is valid only if the essential matters of the contract to be concluded, and the period within which it must be concluded, are fixed, under article 91, first paragraph. If the law requires a particular form for that contract, the same form must also be observed in the preliminary agreement, under paragraph 2.
What is the practical difference between a promise and a completed sale?
A promise, or a preliminary agreement, is an undertaking to conclude the contract later, under articles 78 and 91. A completed sale of immovable property is a disposition that does not conclude except by registration, and ownership passes by the form the law requires. Confusing the two does not change the rule in article 508.
Related topics and articles
- 01Real Estate Registration Departments in Baghdad, Karkh and RusafaFiling at a Baghdad Real Estate Registration Department under Law 43/1971: venue follows the department's area of work, the property and its register.
- 02Sale of property under an irrevocable power of attorneyA power of attorney with a third-party right attached (Civil Code art. 947; Registration Law arts. 199 and 205); the sale concludes only by registration.
- 03Sale or mortgage and the real-estate tax step in governorates not organised in a regionSale or mortgage and the real-estate tax step in governorates not organised in a region, under Law 162/1959 and Land Registration Law 43/1971.
- 04What a landlord reviews before and after a lease in BaghdadWhat a Baghdad landlord reviews before and after a lease under Rent Law 87/1979 and the Civil Code.
- 05Ending co-ownership of shared propertyHow co-ownership of property ends under the Civil Code: agreed partition by registration, a First Instance claim, or sale if it cannot be divided.