The risk of paying twice the registration and recording fees for irrevocable powers of attorney related to the notarized transfer of immovable property

Nouraei & M. Mostafavi Law Offices – September 15.2024-Tehran- For many years, in connection with the purchase and sale of immovable properties and assets, notarized powers of attorney have been very popular as an instrument for transfer of ownership. In cases where it is difficult to obtain the necessary documents and permits from the authorities, such as the municipality and the tax authority, for doing the property transfer officially, an irrevocable power of attorney given to buyer for transferring the property has somehow replaced the notarial title deed.

However, the legislator for stopping misuse of irrevocable powers of attorney and stabilization of the market of real estate transactions, has put financial pressure on the transacting parties to do the transfer of ownership in a limited time span. In this connection, Note 2 of Article 1 of the “Law on Obligation to Register Transactions of Immovable Properties,” which became effective on 2 Tir 1403 (22 June 2024), states:

“The amount of registration fee and recording fee for preparing an irrevocable power of attorney designed to transfer ownership of immovable properties in the notary public offices is equivalent to preparing an official deed for transfer of property, and if the property is transferred within nine months from the date of preparation of the said power of attorney, the official transfer deed will be prepared without the need for repayment of the property transfer fee and registration fee.”

Therefore, if the property is not transferred within nine months from the date of making the power of attorney, the registration fee and recording fee of the said property must be paid again.

(Re-publication and usage wholly or partially allowed upon naming the source J. Nouraei & M. Mostafavi Law Offices).