Right of disposition of agricultural land

Agricultural land in Iraq is a cornerstone for ensuring food stability and sustainable development. This necessitates regulating its possession and management through precise and effective legislation, such as the usufructuary right over agricultural lands (haq al-tasarruf). In this context, this concept emerges as a distinctive legal system that differs fundamentally from the model of absolute ownership known in traditional legal jurisprudence.

The usufructuary right is not merely a grant of authority to use the land. It represents an integrated mechanism that seeks to achieve harmony between the state's sovereignty over its real estate assets and the rights of individuals to invest in and develop them for the benefit of society as a whole. Understanding this right goes beyond knowing its official definition; it requires a deep exploration of its procedural aspects, economic and social impacts, and the obstacles it faces in the context of contemporary legislative changes.

This report aims to provide a comprehensive overview of the usufructuary right over agricultural lands, presented by Osama Ta'ma for Legal Services and Consultations. It begins with its legal foundations and essential features, moves through its acquisition and loss, and concludes with an assessment of its overall impact on the economic and social reality in Iraq.

Theoretical and Legal Foundations of the Usufructuary Right

Definition and Core Characteristics

In relation to state-owned land (amiri lands), the usufructuary right is defined as a primary real right derived from the right of ownership. It grants its holder the authority to use and invest in these lands and provides direct powers over them within the limits of the law. This definition goes beyond mere ordinary use, as it holds unique characteristics that place it among advanced real rights.

The first of these characteristics is its real nature, which gives the holder immediate authority over the land, enabling them to exercise their rights without interference from the original owner, which is the state. Secondly, it is a real estate right that applies to state-owned amiri lands while the ownership of the land itself is retained by the state treasury (bait al-mal).

Individuals acquire this right under specific conditions for development and utilization purposes. This distinguishes it from the absolute ownership that the law grants to individuals over their personal property.

Legal and Material Dispositions

The Iraqi Civil Code, specifically Article 1169, addresses the scope of the usufructuary right over agricultural lands, dividing dispositions into material and legal. Materially, it allows the possessor to cultivate the land and benefit from its crops, plant trees and vines, and construct necessary agricultural facilities such as houses, factories, and shops, provided that the construction is not expanded to turn the location into a large residential cluster.

Legally, it permits the usufructuary to sell their right through a process called "faragh" (transfer), or to exchange, or to mortgage it for security or possession. They can also lease or lend the land as if they were the owner, with all these dispositions required to be documented at the registration office to ensure their validity.

The usufructuary right over agricultural lands constitutes a fundamental part of its holder's financial liability, making it a general guarantee for their creditors. Consequently, creditors have the right to seize it and recover their debts from its proceeds even after the debtor's death, whether this right was their only asset or part of other assets.

However, the underlying ownership of the land remains preserved for the state without being compromised. These delicate balances highlight the special nature of the usufructuary right, which provides broad powers for investment while preserving national ownership.

The Difference Between Usufructuary Right and Right of Ownership

Distinguishing between these two in Iraqi law is crucial, as both grant control over the property, but they differ in the nature of this control. The right of ownership is defined as the broadest right, granting its holder unrestricted powers to use, invest in, and dispose of the property.

On the other hand, the usufructuary right is a derivative right of ownership. It grants powers of use and investment, but the authority to dispose of it is restricted from affecting the underlying land or its ownership.

The main difference lies in several aspects:

Ownership of the Underlying Land: In ownership, the land and all its rights and benefits belong to the owner, while in the usufructuary right, the land remains owned by the state, and the individual only acquires the benefit.
Power of Disposition: This is absolute for the owner, in contrast to the usufructuary, who has restrictions. The usufructuary can sell or mortgage their right without affecting the underlying land, being limited to the right of use.
Inheritance: Ownership is transferred according to Islamic Sharia. However, the usufructuary right over agricultural lands is inherited by both male and female children equally, which contradicts traditional inheritance rules and underscores its unique nature to ensure fair distribution and continued investment.

Usufructuary's Rights and Legal Restrictions

As specified in Article 1169 of the Iraqi Civil Code, the usufructuary of amiri lands enjoys broad material and legal powers, but they are governed by restrictions that ensure the integrity of state ownership.

Granted Powers:

Materially: This includes cultivating the land and benefiting from its natural or acquired products, planting trees, and converting it into gardens or pastures. The construction of agricultural facilities is also permitted.
Legally: The usufructuary has the right to sell the right through "ifragh" (transfer), exchange, or mortgage. The right can also be sold and the mortgage redeemed from the proceeds even if the land reverts to the state. Leasing or lending is also permitted.

Restrictions:

Non-Impact on Underlying Land: All dispositions must not affect state ownership.
Registration: No disposition is valid without being documented at the registration office.
Limitation to Agricultural Purpose: Constructions must be agriculturally necessary and not expanded to turn the place into a residential cluster.

These restrictions confirm the limited nature of the usufructuary right, which aims for the public good by utilizing state lands while protecting their foundation.

The Path of the Usufructuary Right

Mechanisms for Acquiring the Usufructuary Right over Agricultural Lands

This right is not acquired arbitrarily. It follows legal mechanisms designed to direct it toward productive and developmental goals. One of the most prominent ways is acquisition through specialized laws to encourage specific groups to participate in agriculture. The "Law on Regulating the Lease of Agricultural Lands and Granting the Usufructuary Right to Agricultural and Veterinary Graduates" stands out as a key model. It aims to empower unemployed graduates to establish advanced agricultural projects using scientific methods.

To obtain the right, specific conditions must be met: 10 years must have passed since the lease contract, proof of effective investment according to the agricultural plan without violations, and holding Iraqi nationality. It is granted in exchange for a financial compensation determined by a committee in the Directorate of Agriculture. This approach links the right to genuine investment, achieving the legislative purpose.

Likewise, the right is acquired by inheritance, with transfer rules that differ from general inheritance. It passes to children equally, contradicting the Islamic Sharia applied to private property. This reflects its unique nature to ensure fair distribution and continued development across generations.

Procedures for Transfer and Documentation

Legal dispositions of the usufructuary right over agricultural lands are subject to precise and centralized procedures to ensure their legitimacy. No real estate disposition—creation, transfer, modification, or termination—is valid without being registered.

Transfer (Ifragh) Procedures:

Initial Submission: Submitting an application with documents to the department.
Inspection and Appraisal: A field inspection to appraise the value.
Tax Settlement: Clearing the seller of financial obligations.
Review and Signing: Presentation to the reviewer and director.
Final Registration: Registration for the buyer.

Required Documents:

Recent Title Deed: Proof of ownership.
Statement of Notification and Information: Proof of notification and municipal documentation.
Inspection and Appraisal Decision: Determination of the initial value of the property for tax purposes.
Personal ID and Residency Card: Proof of identity and address of the parties.
Building or Renovation Permit (if applicable): Proof of the legality of constructions on the municipal land.
Tax Clearance Certificate: Proof of settlement of financial obligations.

Causes for Extinction and Loss of the Usufructuary Right

The usufructuary right over agricultural lands is not permanent. It ends for natural or legal reasons, which return the land to the state if its purpose ceases. The Civil Code specified the causes of termination: prescription due to time without use, neglect of investment, or the termination of the amiri lands system.

The state reclaims the land if the usufructuary violates their obligations, such as failing to implement the agricultural plan, in which case specialized committees investigate and withdraw the right. The right also ends for public interest, such as government projects, whether compulsorily or voluntarily. These provisions confirm the link of the right to the public benefit; if the purpose ends, the original asset reverts to the state.

Economic and Social Dimensions and Contemporary Challenges

Impact on Agricultural Development and Investment

The agricultural sector is a major economic pillar for food security. The usufructuary right over agricultural lands was designed to bolster it by encouraging investment in state lands, as seen in the Graduates Law that links possession to scientific investment. However, reality reveals a contradiction where the right has been transformed into a tool for urban expansion.

After 2003, chaos led to the shrinking of agricultural lands in favor of residential projects. This is reflected in the Council of Ministers' decision of 2022, which facilitates the conversion of unexploited lands to residential areas without addressing the neglect, threatening food security and encouraging violations.

All of this makes the law a tool for regularizing violations instead of preventing them, thus entrenching a culture of non-compliance.

Recent Legislative Trends in Iraq

The land tenure system faces conflicts between old and new legislation. Decision 320 of 2022 facilitates the conversion of lands to residential areas, contradicting Law 117 of 1970, which requires referring back to the usufructuaries. The problem stems from the difficulty of applying the old law due to the loss of rights holders and expired contracts. Therefore, a new draft law is being prepared to cancel Law 117, which would grant municipalities the power to dispose of the land without recourse.

This reflects a conflict between the principles of ownership and the political needs for housing, transforming legislation into a tool for settlement rather than agricultural protection.

Conclusion

The usufructuary right over agricultural lands represents a unique legal system designed to reconcile state ownership with the rights of individuals for development. It has granted powers for investment while preserving the underlying land. However, it faces challenges today, such as its transformation into a tool for urban sprawl, which threatens agricultural areas.

To fully benefit from the rights and opportunities provided by the usufructuary right system over agricultural lands in Iraq, and to avoid potential legal risks, it is essential to obtain specialized legal advice. You can contact the law firm in Iraq for accurate and reliable guidance, whether you are seeking to acquire this right, need assistance in completing any related transactions, or aim to protect your assets. The firm ensures that you navigate the complexities of this legal system efficiently and effectively.