Building on or altering endowed property
Endowed property does not stay the same forever. Buildings age, an empty plot becomes suitable for a project, and a tenant wants to add a floor or change a frontage. But any change to an endowed asset touches property held in perpetuity, so the legislature tied it to specific approvals. The office of lawyer Ali Barakat, in Baghdad, al-Yarmouk, follows these rules for trustees, tenants and investors who want to build on or develop endowed property.
The trustee and the endowment body's approval
Article 11 of the Endowments Administration Law No. 64 of 1966 allows the trustee to buy property, develop it, repair it or put up buildings, provided the approval of the endowment body is obtained. Two exceptions apply: a repair of limited cost within the ceiling set by the text, and a trustee who is the founder. The trustee is therefore not free to spend endowment income on building; the trustee applies to the office.
The council's decision
Article 7(VIII) of the Sunni Endowment Office Law No. 56 of 2012 and article 7(VIII) of the Shia Endowment Office Law No. 57 of 2012 make deciding trustees' requests to buy for the endowment, develop it or build on it a power of the office council. The request is prepared with an engineering and financial file showing need and feasibility, and is then put to the council.
Funding building from proceeds
Money that reaches an endowment from expropriation or substitution, along with charitable shares, may be used to build on endowed land when the council of the endowment body so decides, under article 9 of the Endowments Administration Law. If part of an endowed plot is expropriated, the proceeds can be used to build on the remainder.
Building rights and long leases
Where an investor wants to build on endowed land, the route set by the Real Estate Registration Law No. 43 of 1971 is the building right (musataha). Article 229(1) creates a building right over owned land or land under a valid endowment by registering the agreement between the landholder and the builder in the land register. Article 229(2) registers a long lease that entitles the tenant to put up buildings or other structures, and subjects its registration, term, disposal and inheritance to the rules on building rights. Article 258 lists the creation of a building right among the permitted dispositions over endowed property. An investor therefore needs more than an ordinary lease: a register entry that protects the building.
Lawfully owned buildings on endowed land
Article 56(4) of the Real Estate Registration Law deals with an existing situation. Where land under a valid endowment carries buildings or plantings lawfully owned by individuals, the land is registered afresh and the ownership of the buildings and plantings, with the rights they created, is recorded. A lawful building stays its owner's on the register, and the land stays the endowment's.
Planting rights
Article 6(4) of the Endowments Administration Law allows the endowment body and the trustee, by council decision, to acquire planting rights (mugharasa) by agreement or through the courts after paying fair compensation to the planter. This helps recover planted endowed land for a more beneficial project.
A tenant who alters without permission
A tenant who alters endowed property contrary to the lease or the instructions is exposed to article 13 of the Endowments Administration Law: repossession and eviction through the execution directorate thirty days after notification of the eviction order, and liability for twice the damage. See leasing endowed property; for registration, registering endowed property; and where taking the asset out of the endowment is the better course, substitution of endowed property.
Legal basis and sources
- Endowments Administration Law No. 64 of 1966 (Official Gazette No. 1293 of 31/7/1966) — Articles 6, 9, 11 and 13
- Sunni Endowment Office Law No. 56 of 2012 (Official Gazette No. 4254 of 15/10/2012) — Article 7
- Shia Endowment Office Law No. 57 of 2012 (Official Gazette No. 4254 of 15/10/2012) — Article 7
- Real Estate Registration Law No. 43 of 1971 (Official Gazette No. 1995 of 10/5/1971) — Articles 56, 229 and 258
Frequently asked questions
Can a trustee build without permission?
No. Article 11 of the Endowments Administration Law requires the approval of the endowment body, unless the trustee is the founder or the repair falls within the exempted limit.
How does an investor protect a building on endowed land?
By registering a building right or long lease in the land register under article 229 of the Real Estate Registration Law.
Can expropriation proceeds for part of an endowed plot be used to build on it?
Yes. Article 9 of the Endowments Administration Law allows expropriation proceeds to be spent on buildings on endowed land by council decision.
What happens to a lawful building already standing on land under a valid endowment?
Its ownership is recorded for its owner while the land stays with the endowment, under article 56(4).
Related topics and articles
- 01Leasing endowed property: the competent body and the form of the contractLeasing endowed property under article 8 of the Endowments Administration Law No. 64 of 1966: who leases, leases over three years, and what follows a tenant breach or the end of the term.
- 02Registering endowed property with the Real Estate Registration DirectorateRegistering an endowment under the Real Estate Registration Law No. 43 of 1971: fresh registration, registering an endowment over registered property, cemeteries, and permitted dispositions.
- 03Substitution of endowed property and its considerationSubstitution of endowed property under article 6 of the Endowments Administration Law: council decision, property or cash consideration, instalments and mortgage, and cassation review of substitution deeds.
- 04The Sunni Endowment Office: jurisdiction and property transactionsThe jurisdiction of the Sunni Endowment Office under Law No. 56 of 2012: its council, its investment authority, controlled and attached endowments, and property transactions.
- 05The Shia Endowment Office: jurisdiction and property transactionsThe jurisdiction of the Shia Endowment Office under Law No. 57 of 2012: endowments without a private trustee, appointing and removing trustees, sale and substitution, and the holy shrines.