Iran Commercial Eviction: Legacy Rights vs. Fast-Track

The procedure and legal complexity of evicting (forcing out) a commercial tenant in the Iranian judicial system depends exclusively and entirely upon which of the two governing market laws—the traditional 1977 regime (1356 SH) or the modern 1997 regime (the Landlord and Tenant Relations Act of 1376, which was approved on 17 August 1997)—the original contract was established and enforced under.

This is not a minor discrepancy; the divergence between these two systems equates to the difference between obtaining a summary executive eviction order versus sinking into several years of appellate court battles involving complex appraisals just to reclaim your own property.

1. Eviction in the Traditional Commercial System (Contracts Pre-1997)

If a commercial unit (such as an old retail shop, a textile merchant in the Grand Bazaar, or a veteran barbershop) was leased prior to 1997 (1376) under the Landlord and Tenant Relations Act of 1977 (1356 SH) and has yet to be vacated, the landlord is governed by the rules of the "Right of Business, Trade, and Profession" (Haq-e Kasb va Pisheh va Tejarat).

Under this system, the expiration of the lease term is absolutely and fundamentally not a valid legal reason to evict a commercial tenant. The tenant possesses the right to remain on the property perpetually because through their continuous operation, they have accrued the "Right of Business, Trade, and Profession".

Pathways to Petition for an Eviction Judgment:

To legally retake possession, the landlord must definitively prove one of the following circumstances in a Public Civil Court (as Dispute Resolution Councils lack jurisdiction over Right of Business disputes):

1. Demolition and Reconstruction: Under Article 15, the landlord must have secured a building permit. Catch: The judge will not issue the eviction order unless the landlord pays the tenant 100% of the court-appraised, current market value of the tenant's "Right of Business" in cash.
2. Definitive Personal Need: If the landlord proves they personally require the shop to earn a livelihood, they may evict under Article 15, provided they pay 100% of the appraised Right of Business compensation.
3. Tenant Violations (Eviction with Zero or 50% Compensation): The pathways for a landlord to seize their property while reducing or eliminating the "Right of Business" payout include:

• Vandalism and Neglect (Ta'addi and Tafrit): Under Article 14(4), if the tenant causes intentional damage or neglect, eviction is permitted without any compensation.
• Unauthorized Change of Profession: Under Article 14(7), if the tenant transforms the business type without explicit written permission, the landlord may evict without paying any compensation.
• Unauthorized Subletting / Transfer to Non-Owner: Under Article 19, if the tenant transfers the lease to a third party without formal permission, the landlord can evict by paying exactly half (50%) of the total market value of the Right of Business.

2. The Eviction Route (Commercial Contracts Post-1997)

For all modern office spaces and shopping malls whose first lease was signed after 1997 (1376), the process is governed by the 1376 Act. In this system, the automatic Right of Business is never created, though "Sargofli" (Goodwill) may exist if explicitly paid for.

Evicting a tenant under this model depends on the contract's structure:

1. Summary Eviction Order (Dastoor-e Takhliyeh): Under Article 3, an eviction order can be issued within approximately one week if the written contract has a clear expiration date and is signed by two trusted witnesses (Article 2). This rapid route is only available if no Sargofli is claimed or the amount is undisputed.
2. Eviction Judgment (Hokm-e Takhliyeh): If the tenant paid Sargofli and there is a dispute over its current value, the case must follow the "Judgment" procedure in a Public Civil Court. This involves court-appointed experts and takes significantly longer than the summary order.

The Fate of Paid-For "Sargofli" (Key Money)

If the tenant explicitly paid a sum labeled as "Sargofli" at the start of the lease, Article 6 of the 1376 Act requires the landlord to refund it at the "fair price of the day" (Gheimat-e Rooz) upon eviction.

The landlord must have the Sargofli meticulously appraised by official court experts. Under Article 9 of the Law on Dispute Resolution Councils (1394 SH), the Council is legally prohibited from hearing eviction cases involving disputes over Sargofli; these must be adjudicated in the Public Civil Courts. The eviction will only be executed once the landlord pays the newly appraised, inflation-adjusted Sargofli sum to the tenant.

The advanced Landager system serves as an unparalleled tool, meticulously categorizing and archiving legacy "Right of Business" paperwork, tracking sequential stages of modern Sargofli payouts, and securely appending electronic witness signatures. This locks in the compliance formula, guaranteeing you formidable and constant, online monitoring of your massive real estate investments within the Iranian judicial system.

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