Off-Plan Housing Sales Fall Victim to Flawed Legislation: How Will People Buy Homes?

The secretary of the Real Estate Association said the ban on off-plan sales stems from a calculation error and from legislation on property sales and pre-sales, a matter that also has a significant impact on housing pricing and price trends.

In a conversation with Mehr reporter, Samaneh Moharmini-nemin, the secretary of the Union of Real Estate Consultants, criticizing the obstacles to the implementation of the pre-sale housing law, said: since 2013, when this law was approved, the preparation of pre-sale contracts was taken from real estate consultants and handed over to notaries, but since then, not even a single pre-sale contract has been registered in the notaries. An issue that has blocked the way for people to purchase housing installments.

He added: Now, in projects with 1,000 units, 8,000 units and even 800 units, pre-sales are carried out, in which the unit under construction is sold at the price of the property that is supposed to be ready three years later.

Moharrami continued: In the current situation, the unit that is still on the ground may be sold at very high prices. For example, a unit that is supposed to be worth 500 million tomans per meter in the future, may be sold today for 300 million tomans per meter and in the initial stage of construction, and the seller can justify this by paying in installments.

He stated: We have closed the pre-sale path for real estate consultants and in fact, we have also blocked the pre-sale and installment purchase path for people. Since 1390, when the housing pre-sale law was approved, it was decided that real estate consultants should not prepare pre-sale contracts and this responsibility should be entrusted to notary offices, but notary offices have not been able to register a single pre-sale contract since then.

The secretary of the Union of Real Estate Consultants reminded: As a result of this situation, people are not able to buy housing in installments. In such a situation, now many webinars and seminars are held and people are asked to purchase a housing meter. The question is, why should you buy a meter?

He clarified: When there is a declaration, a specific transaction can be made. For example, a person can buy a 40-meter unit and define the payment of its price in a three-year period. In this case, the subject of the transaction is clear and the buyer knows what property he is buying and what he is paying for.

Moharrami added: But in buying a meter, the subject of the transaction is uncertain and it is not clear where, when, in what form and on which floor the property that a person is paying for will be located in the future. In fact, we have prohibited the method that was right. This situation is caused by a miscalculation and legislation in the field of sale and pre-sale of property, and this issue also has a significant effect on pricing and housing price trends.

Referring to the prediction of loading the pre-sale housing law into the Kateb system, he said: The pre-sale housing law was supposed to be loaded into this system, but the requirements and infrastructure necessary for its proper implementation are still neglected.

The secretary of the Real Estate Consultants Union continued: According to the anticipated requirements, when setting up the pre-sale contract, the property must have a technical ID in the municipality, a trust account must be created for the builder and the owner so that the buyer can deposit his money in it and the owner's investment will also have the necessary security. Also, the manufacturer should put an amount as a guarantee in this account, but currently there is no escrow account and all these things are neglected.

In the end, Moharrami noted: If we open the way to pre-sale housing, people will be able to buy houses much more easily. I do not ignore the issue of fraud in this area and the number of these cases is also high, but many people owned houses through pre-sale before the 1390s, and we cannot deny the fact that pre-sale is one of the ways for the youth of the country to become homeowners.