How Iraqi real estate became the subject of corrupt dealings

Real estate in Baghdad and other Iraqi areas has been subject to corrupt deals and law violations for some time, sparking governmental and popular concern about a growing phenomenon involving criminal gangs and corrupt public employees.

al-monitor A "For Sale" sign hangs outside the gate of a house in Baghdad, Iraq, Sept. 10, 2008. Photo by REUTERS/Ceerwan Aziz.

Topics covered

real estate, housing, corruption, christians, basra, baghdad

Oct 31, 2016

Baghdad — When the Iraqi Commission of Integrity Court entered a default judgment Oct. 16 against the head of the Karbala Real Estate Registration Directorate, ordering her imprisonment for tampering with citizens' real estate records, it came not as a surprise but rather as a manifestation of a known underlying phenomenon.

This situation has been raising both popular and governmental concern, as it has spread to various regions, such as Babil, south of Baghdad, where a case of corruption was reported at the Real Estate Registration Directorate earlier this year. In Baghdad, this phenomenon is even more pervasive, according to the parliamentary integrity commission's annual report published March 3; this prompted an investigation into forged property deeds.

Several cases of illegal seizure of real estate properties were reported in Baghdad involving property dealers and employees from governmental bodies involved with real estate registration. Real estate owned by emigrants — especially Christians — has been the main target because of the owners’ long absence from the country.

In some areas of Baghdad where signs of this phenomenon have become noticeable, one is bound to come across houses with walls marked with writing saying things such as “confiscated,” “not for sale or purchase due to problems” and “house claimed by tribes.” Capt. Ali Bahadeli of the Baghdad anti-corruption police told Al-Monitor, “Most of these incidents are deliberate and intended to force the owners to sell at a very cheap price, especially since they live abroad and it is not possible for them to learn about the details.”

He said, “Those behind these fraudulent deals have gone as far as threatening the owners by alleging that it is not in their best interests to leave their properties unsold at this time, since no one will buy them later should the owner reject the deal.” 

Not only that, but these swindlers are said to be affiliated with an armed force, according to the secretary-general of the Christian Movement in Iraq, Rayyan al-Kildani. He previously made a Feb. 13 statement to the local press saying, “They have seized eight houses belonging to Christians.”

It has been reported that some outlaw gangs have been involved in these incidents. Seeking to make a profit, these gangs seize expensive properties by spreading fear and threatening owners, who are left with the option of selling their properties at low prices.

As a result, real estate owners are forced to sell under the conditions set by those benefiting from these schemes. This led the Ministry of Justice on Aug. 7 to suspend activities at real estate registration bodies. In turn, Basra’s provincial council on March 10 took measures to curb the phenomenon of fraud involving emigrant-owned properties, suspending work at agencies associated with land ownership.

A closer look into this phenomenon seems to reveal a direct correlation with the political and security situation, parliamentary legal committee member Salim Shawqi said. He told Al-Monitor, “This phenomenon began after the fall of the [former Iraqi President] Saddam Hussein regime following the US invasion in 2003, giving rise to an ongoing state of chaos, now to a lesser degree, in security and administrative affairs.”

It should be noted that many real estate registration authorities were victims of arson and looting in the tumultuous period following the ouster of Saddam's regime in April 2003.

Shawqi added, “After the ousting of Saddam, many estates belonging to former regime figures, as well as properties located on the bank of the Tigris River and in Qadisiyah province, were either illegally seized or sold at low prices.”

Given the correlation between this phenomenon and the security situation, especially in Baghdad, properties are considered valuable commodities used for political ends, to rally followers and eliminate rivals. During the Saddam era, real estate served the regime’s political agenda and power consolidation, with the regime using it to gain support and suppress dissent. During his eight-year war with Iran (1980-1988), Saddam distributed land and houses to families of war victims. Meanwhile, dissenters had to flee and saw their properties stripped from them.

In the areas outside Baghdad, the reasons were different. An employee and expert in real estate registration in Babil told Al-Monitor on condition of anonymity, “The sale and purchase operations of real estate by means of forgery are only possible with the help of influential parties, as they require legal procedures and official documents.”

However, he said, “Real estate acquisitions are conducted according to the law, as the owners officially cede ownership in return for an amount less than the actual price value of the property as a result of intimidation by the beneficiaries.”

Mohammad Koun, a member of the parliamentary integrity commission, told Al-Monitor, “Influential political and official parties are behind the violations of real estate ownership. They are associated with corrupt networks, with a record in falsifying real estate and land deeds." He added, “The government’s mission is to put an end to this phenomenon, since it is responsible for following the general policy of the state according to Article 78 of the [Iraqi] Constitution.”

The infringements on emigrant-owned properties and widespread corruption in real estate registration are examples of the general corruption in Iraq. Transparency International’s Corruption Perceptions Index released this year confirmed this. The report placed Iraq among the 10 lowest-ranking countries in terms of corruption in 2015, tying with Libya for 161st place out of 168 countries included in the index.

The problem, along with its negative social impact, cannot be solved by the temporary measures taken Aug. 7 by the Justice Ministry to suspend property registration. The situation requires the rule of law as well as security and stability in order to end all kinds of corruption

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