Buying a residential unit before it's built — known in Iran as a pish-foroush (pre-sale) contract — is extremely common, largely because construction timelines are long and material and land prices move quickly, making early commitment attractive to both builder and buyer. It's also one of the more common sources of disputes in Iranian real estate, particularly for buyers who are not in Iran to monitor construction progress themselves.
What a Pre-Sale Contract Actually Is Under Iranian Law
Iran's building pre-sale law (enacted in 2010, Qanun-e Pish-Forush-e Sakhteman) treats a pre-sale agreement as a real, binding sale contract — not merely a preliminary promise to sell later — with the seller ("pre-seller") committed to constructing and delivering the specific unit described in the contract, and the buyer ("pre-buyer") committed to paying according to the agreed schedule. Because the unit doesn't exist yet, the law builds in specific buyer protections that an ordinary completed-property sale doesn't need:
- A minimum construction threshold before pre-sale is allowed. Under the pre-sale framework, marketing or selling units before construction has reached a specified minimum progress (commonly cited around 10% completion) is restricted — a project selling units off a rendering alone, with no verifiable construction progress, is a warning sign, not a normal industry practice.
- A buyer's right to terminate and compensation tied to actual delivered size. If the finished unit's area differs from what the contract specified, the buyer generally has a defined right to terminate or to have the price adjusted based on the contract's own agreed rate for the difference — this needs to be spelled out in the contract itself, not assumed.
The Fraud Patterns Specific to Pre-Sale Deals
Because a pre-sale buyer is paying for something that doesn't physically exist yet, verification has to happen through paperwork and process rather than by inspecting the finished unit. The recurring problems reported across Iranian real estate practice include:
- Fake or double-sold titles. A seller markets and collects deposits for a unit — sometimes the same unit — to more than one buyer, exploiting weak coordination between registration offices and the pace of construction.
- Misrepresented or forged land/ownership documents underlying the entire project, discovered only after a buyer has already paid a substantial deposit.
- The "deposit trap." A buyer is pressured to pay a deposit quickly to "hold" a unit, and the seller either disappears, changes terms once funds are received, or delays indefinitely.
- Dual pricing. Buyer and seller agree to record an artificially low official price (for tax or registration purposes) while the buyer actually pays more informally — a practice that weakens the buyer's legal position if a dispute later requires proving what was actually paid.
- Final product diverging from what was promised — different finish quality, layout, or delivered square footage than marketed, without a contract clause clearly addressing the buyer's remedy.
What to Verify Before You Pay Anything
- Confirm the underlying land/project title directly with the State Organization for Registration of Deeds and Properties (SSAA) — don't rely solely on documents the seller or their agent hands you.
- Confirm actual construction progress independently rather than relying on the developer's own updates or marketing photos — through an independent site inspection by someone you trust, or an attorney who can request the project's municipal file.
- Get the delivery timeline, unit area, and finish specifications in the written contract itself, with a defined remedy (termination right, price adjustment, or penalty) if any of those aren't met — verbal assurances from a sales agent carry no legal weight if they aren't in the signed contract.
- Avoid informal dual-pricing arrangements, even if the seller frames it as tax-saving — it removes your ability to prove what you actually paid if the deal goes wrong.
- Have an independent Iranian attorney review the pre-sale contract before signing, not just before closing — most of the protective terms need to be in the contract from the start, not negotiated after a dispute arises.