Article 1 – The new town refers to the demographic zone which, within the framework of the plan approved by the Supreme Council for Urbanism and Architecture of Iran, hereafter called the Supreme Council, which is planned outside the statutory limit and protective area of the cities (whichever is the greater) for the settlement of at least thirty thousands people, with buildings and facilities required for the public services, social and economic needs of its inhabitants.

Note – Article (1) is for the construction of new towns only, and does not contradict the laws and regulations relating to national divisions.

Article 2 – Location of new towns will be determined in accordance with the Government’s policies, in the form of a national, regional, and district physical plan, based on the proposal of the Ministry of Housing and Urban Development approved by the High Council.

Note – Upon approval of the construction site of the new town, the Ministry of Housing and Urban Planning may, in accordance with the provisions of current laws and regulations, take possession of the required lands and real estate.Non-governmental applicant may also proceed with the purchase of the required land and real estate in accordance with current regulations.

Article 3 – Applicant is required to prepare a comprehensive plan for the new towns after receipt of the substantive approval of the Ministry of Housing and Urban Development and in accordance with the policies approved by the government. Approval of the above-mentioned plan is one of the duties and powers of the Supreme Council.

Note – All relevant executive bodies are required to provide information to the applicant and those related to the comprehensive plan of the new towns.

Article 4 – Detailed plans of the new town and its subsequent changes as well as the plans for the separation of new lands shall be approved by the Commission of Article (5) of the law establishing the Supreme Council of Urban and Architecture of Iran – ratified in 13/3 /1973- upon proposal of the New Towns Development Company, hereinafter referred to as the Company, or the applicant. In the composition of the commission, until the establishment of the municipality, the managing director of the New Town Development Company which is established on the basis of laws and regulations for the construction of the new town and is henceforth referred to as affiliated company will be present instead of the mayor, and if the town council is not yet formed, the chairman of the relevant city council will participate in the commission.

Article 5 – All ministries, Police force of the Islamic Republic of Iran, government agencies and companies and other companies and institutions whose name shall be stipulated to be subject of the law, are obliged, in co-operation to create a new town, to plan and finance in a way that, in line with the progress of the operations and settlement of people in the new town, provide services required according to the tariffs of towns similar to the new town.

Note – Affiliated Companies or applicants for the establishment of a new town, are obligated to make available to the service provider government agencies, the municipality and the water and wastewater companies, their educational property in accordance with Article 18 of the Law on the Establishment of Educational Councils in the provinces, cities and regions of the country and its annexes approved on 16/1/1994, and other lands with service use (except for lands with commercial use) free of charge. Changing the use of the lands listed above and its assignment to others is forbidden. Investing from the company’s internal resources to create educational, service, cultural and religious spaces will be counted for the company’s finalized taxes.

Article 6 – Government affiliated companies shall provide, each year, the current and development funds required by the new town for the construction and implementation of public service plans of the new town from the land sale and other financial resources.

Article 7 – The Company, upon approval of the general assembly, is permitted to transfer the funds and revenues between the government-affiliated companies in order to help the unprofitable government-affiliated companies and cover its costs.

Article 8 – The Company or affiliated companies are authorized to issue, prior to the establishment of the municipality, , division, separation and development permits for the owners of the lands over one thousand square meters of area within the new town limits in accordance with the land-use and rules mentioned in the comprehensive and detailed plan, provided that the owner assigns to the relevant company, free of charge, its share of necessary spaces for the passageways, services, facilities and equipment of the town according to the per capita amount mentioned in the comprehensive plan approved by the Supreme Council.

Article 9 – The Company or affiliated companies and builders of new towns may separate, prepare and assign to the natural or legal persons the lands they have purchased or acquired, in accordance with the land-use of comprehensive and detailed plans. The terms of the applicants, the manner in which the price is determined, the terms of the assignment, the terms of definite transfer, and the manner of maintaining the new town until the establishment of the municipality is determined in accordance with the executive regulations of this law.

Article 10 – Correct implementation of the new town plan in accordance with the rules and regulations of the project, issuance of building permits, certificates of completion of work and no-violation, preservation and protection of the lands and maintenance of the town as well as collection of the prescribed dues (in accordance with the law of collecting some of government revenues and consumption in specified cases), in the statutory limit and protective area of the new town, , before the establishment of the municipality, will be assumed by affiliated companies or new town builders.

Article 11 – Before the establishment of the municipality, violations of construction and urban planning within the statutory limit and protective area and other laws related to the municipalities of the new towns, announced by the affiliated company or constructor of the new town, will be investigated by the commission referred to in Note 2 of clause 3 annexed to the article (99) of the municipalities law that, according to the rules of the comprehensive plan of the new town, one hundred percent (100%) of the proceeds will be credited to the account of the new town or will be credited to the account of the Company through the treasury, in order to be used for the expansion of the utilities of the new town.

Article 12 – After assuring of the settlement of at least 10,000 people in the new town, the Ministry of Housing and Urban Development is required to communicate the issue to the Ministry of the Interior. Ministry of the Interior is required to take action to establish a town council and the municipality in the new town, even if the new town project is not completed. Upon establishment the municipality, the affiliate or constructor of the new town is required to provide public spaces (green spaces, parks, pavements, squares, passages, cemetery and mortuary) foreseen in the project and infrastructures and deliver them to the municipality after completion and preparation of drawings and documents related to the permits as well as certificates issued and phased construction plans. From this date, the new town will be considered like other towns of the country.

Note – Upon establishment of the municipality, the Company or affiliated companies or constructors of the new town are still obliged to implement the preparation, construction and assignment of their land in accordance with the approved town plan and in accordance with the municipal regulations.

Article 13 – Construction of a new town by the non-governmental sector, after approval of the Supreme Council, requires obtaining a permit from the Ministry of Housing and Urban Development, and the necessary supervision over the construction is made by that Ministry. Determination of the tariff for the right of supervision is carried out upon the proposal of the Ministry of Housing and Urban Development and approval by the Cabinet of Ministers.

Article 14 – All new towns that are established on the basis of legal permits until the entry into force of this law, are subject to the provisions of this law.

Article 15 – Execution regulations of this law, including the support of the creation of a new town, provision of discounts and other items, shall be approved by the Cabinet of Ministers with due regard to the resources specified in the annual budget, upon proposal of the Ministry of Housing and Urban Development.

Executive Regulations of the Law on Establishment of New Towns

The Cabinet of Ministers, at the meeting of 6/8/2003, on the proposal No. 2/100/1879 dated 9/7/2002, Ministry of Housing and Urban Development and on the basis of Article (15) of the Law on the Establishment of New Towns, – adopted in 2001, – the implementing rules of the aforementioned law as follows:

Chapter One – Definitions, generalities, rules and regulations for creating a new town

Part One – Definitions

Article 1- The terms used in this Regulations shall have the following meaning:

1. Law: The Law on the Establishment of New Towns – Adopted in 2001

2. Supreme Council: High Council for Urbanism and Architecture of Iran.

3. Holding Company: New Towns Development Company

4. Affiliated company: New Town Development Company, affiliated company and subsidiary of New Town Development Holding Company.

5. Non-Governmental Applicant: Non-Governmental applicant requesting for license to establish a new town

6. Executor, Town Developer or New Town Builder: A public sector builder or authorized non-governmental applicant.

7. Land Preparation: determination of property lines and surface level, leveling, asphalting pavements, collecting and disposal of surface water.

8. New Town limit: a part of the designated area for the creation of a new town that is designated for the purpose of settlement and creating the required public, service, social and economic buildings and facilities in a specified period of time in the new town comprehensive plan and approved by the Supreme Council.

9. Protective area of the new town: the part of the surrounding area surrounding the new town, which requires monitoring and controlling any construction and development activities in order to preserve the town, its long-term and planned development. The mentioned area is the protective area of the new town in which villages areas should be taken into consideration in accordance with rural development plans.

Part II – Generalities, terms, conditions and common regulations for the public sector and non-governmental applicant for the purpose of creating a new town.

Article 2- The necessity and place of creating a new town with the determination of the population cap (at least thirty thousands), shall be approved by the Supreme Council, upon proposal of the Ministry of Housing and Urban Development, in accordance with the state policies in the form of a national, regional or district physical plan.

Article 3- In cases where the necessity of creating a new town has not been approved in national and regional physical plans, location studies shall be performed in the form of regional design studies or special plans, subject of the approval No. 55837/21414 dated 10/1 / 2000 of the Cabinet of Ministers. The result of these studies should be to find the most suitable place, taking into consideration the population cap and the area needed to create a new town and its territory consisting of the lands adjacent to the new town limits, which requires monitoring and control of any development activity in order to preserve the new town. The protective area of the new town should also be specified in the plan. This plan is also proposed by the Ministry of Housing and Urban Development, and approved by the Supreme Council.

Article 4- In cases where a regional plan has already been prepared and only the need for creation and the population cap of the new town is approved in this plan or upstream plans, location studies as described above are performed on a case-by-case basis at the district level and according to the approved district plan and will be proposed by the secretariat of the Supreme Council to the Supreme Council, for consideration and approval.

Article 5 – In cases where, in a special situation, the designated land for the creation of a new town is located in more than one division or bigger units, the High Council shall, when approving the location plan, determine, after obtaining the opinion of Ministry of the Interior, that the new town is located within the territory of which division or city. Subsequently, Ministry of the Interior performs the legal formalities in order to improve the boundaries of that district or city.

Article 6- Preparation of the new town comprehensive plan, after notification of the Supreme Council on the necessity, scope of location and population cap of the new town, is the responsibility of the constructor of the new town.

Article 7- From the date of approval of the comprehensive plan, the new town will be one of the towns under Article 4 of the Law on Engineering and Building Control Organization – adopted in 1995, and any construction in it shall be in accordance with article 30 of the said law.

Article 8- Reviewing and approving the detailed plans and land division plans and their subsequent changes, if there is no fundamental contradiction with the comprehensive plan, is entrusted to the Commission referred to in Article (5) of the Law on the Establishment of the Supreme Council for Urban Development and Architecture of Iran, approved in 1972. In the composition of the said commission, until the establishment of the municipality, instead of the mayor, the managing director of the affiliated company, and for reviewing the proposal of a non-governmental applicant, the director of the holding company or his representative will be present, and if the town council is not yet formed, the head of the relevant city council will attend the commission. . Presence of the non-governmental applicant in the commission, without the right to vote, is possible.

Article 9: New town builders are obligated to make available to the service provider government agencies, the municipality and the water and wastewater companies, their educational property in accordance with Article 18 of the Law on the Establishment of Educational Councils in the provinces, cities and regions of the country and its subsequent amendments approved on 16/1/1994, and other lands with service use such as green spaces, Cultural sites, parks, pavements, squares, passages, children’s playgrounds, cemetery, sports, religious and therapeutic venues, fire station, garbage collection and landfill sites, construction site of water and wastewater treatment plants, location of police forces (except for lands with commercial use), free of charge after providing a timetable and providing funds for construction of buildings, facilities and its allocation and appropriate to the progress of the operation. Changing the use of the lands listed above and its assignment to others is forbidden. .

Article 10 – All ministries, Police force of the Islamic Republic of Iran, government agencies and companies and other companies and institutions whose name shall be stipulated to be subject of the law, are obliged, after the approval of the comprehensive plan of the new town and its protective area, to plan and finance in a way that, in line with the progress of the operations and settlement of people in the new town, provide the required services as in the similar towns within the same geographical area.

Article 11- The Management and Planning Organization of the country is obliged to provide the credit required for the service provider agencies in their annual budget by virtue of the provisions of Article (5) of the Act and Article (10) of these Regulations and with due regard to the phased and scheduled plan for the implementation of the new town, and appropriate to the progress of the work.

Article 12 – The correct implementation of the new town plan in compliance with the rules and regulations of the project, the issuance of the building permit, certificates of completion of work and no-violation, maintenance of the land and town, collection of the prescribed dues (in accordance with the law of collecting some of government revenues and consumption in specified cases) Approved in 1990 – in the statutory limit and protective area of the new town, , before the establishment of the municipality, will be assumed by new town builders. The builder is authorized to use the received funds, in accordance with the relevant regulations, for the construction and provision of services in the new town.

Article 13- In order to preserve and protect the lands and prevent violations and aggressions to the lands and buildings in the new towns, as well as violations in regard to construction and urban development in the town limit and its protective area, the new town builder is required, by requesting the police forces, to prevent abuse, aggression or violations and after filing documents regarding construction and urban violations, notify the Commission referred to in note (2) of paragraph (3) annexed to the Article (99) of the Municipal Law – approved in 1993. The commission, taking into account the rules of the comprehensive plan of the new town and the opinions of the new town’s builder, will investigate the matter and decide on demolishing the building or imposing a fine equal to fifty to seventy percent of the market price of the buildings. In the event of fines, the proceeds will be credited to the account of the builder or through the treasury to the account of the affiliated company, as appropriate, in order to be used for public utilities in the new town. However, as long as the construction and planning violations are decided by the commission, builder of the new town is obliged to prevent further violations and police and other competent authorities are also required to cooperate with the builder of the new town.

Article 14- The builder of the new town is authorized to issue, prior to the establishment of the municipality, , division, separation and development( whether preparation or construction) permits for the owners of the lands over one thousand square meters of area within the new town limits in accordance with the land-use and rules mentioned in the comprehensive and detailed plan, provided that the owner assigns to the relevant company, free of charge, and to non-governmental applicants through an agreement, its share of necessary spaces for the passageways, services, facilities and equipment of the town according to the per capita amount mentioned in the comprehensive plan approved by the Supreme Council

Note 1- If the share allocated to the applicant is not separable or suitable for use, the applicant may pay or receive his share in the form of a consideration or services agreed upon or equivalent to the market price.

Note 2: Division and separation of gardens within the new town boundaries shall be subject to the rules and regulations relating to the division and separation of gardens.

Note 3: Any transaction and transfer by owners whose lands are located within the new town and its protective area are permissible after inquiry from the constructor of the new town and subject to the rules of the comprehensive plan, land use and other relevant regulations.

Note 4. The Organization of Endowment and Charity Affairs is obliged to mention the necessity of observance of land-use and detailed plan in the contracts for transfer of the endowed lands in the town limit and surrounding areas, and it should observe the same.

Article 15- The Islamic Revolutionary Housing Foundation is obliged to take measures, in coordination with the constructor and within the framework of the comprehensive plan, to prepare or revise the rural guide plans for the villages located in the area of the protection of the new town and approve them in the relevant authorities.

Article 16- The constructor of the new town is obliged to prepare the timetable and implementation stages of the project in terms of financial, executive and physical aspects of the project, and to act according to the aforementioned plan after its approval by the Ministry of Housing and Urban Development.

Article 17- Constructor of the new town shall be obliged to separate and prepare the lands purchased and acquired by him with due regard to the phased plan and assign to the natural and legal persons according to the land-uses mentioned in the comprehensive plans. Definite transfer of the title deed to the buyer is subject to submission of the certificate of completion. For transfer of the new town’s lands, non-governmental applicant, in addition to the above conditions, must also comply with the provisions of Article 30 of this regulations.

Note – Determining the conditions of applicants, the price, terms of assignment and discounts on government-owned companies will be the responsibility of the general assembly of affiliated companies and in the case of non-governmental construction companies, it will be the responsibility of the company itself.

Article 18- Before the establishment of the municipality, the new town builder may, in coordination with the Ministry of Housing and Urban Development, provide for the common expenses of the maintenance of the new town, in the transfer contract or in the transfer deed.

Article 19- In the stages of granting the bank facilities and facilities that the social security organization grants to the social security subjects or other organizations or credit institutions grants to their customers the land transfer contract in new towns will be regarded as an official document and the affiliated company is authorized to sign the regulatory documents exclusively for the purpose of mortgages; however, in the event that the borrower does not fulfill its obligations, the constructor of the new town will agree with substitution of the bank or the lending institution or credit institution or any other person introduced by them, instead of the applicant or the buyer.

Article 20. After the settlement of at least 10,000 people in the new town, the holding company, according to the report of the affiliated company or non-governmental applicant, shall inform the Ministry of Housing and Urban Planning, and the Ministry shall, after ensuring the settlement of the said population, communicate the issue to the Ministry of the Interior. Ministry of the Interior is obliged to act within six months from the date of the Ministry of Housing and Urban Development’s announcement for establishment of a town council and establishment of a municipality, even if the new town project is not completed.

Article 21. Upon establishment of the municipality, constructor of the new town is required to provide public spaces (green spaces, parks, pavements, squares, passages, cemetery and mortuary) foreseen in the project as well as the related infrastructure within a maximum of one month, and deliver them to the municipality after completion and preparation of drawings and documents related to the permits as well as certificate of completion and no-violation certificate and phased construction plans. The municipality is also required to admit and comply with the said licenses.

Article 22- From the date of the minutes of delivery, the new town is considered like other towns of the country and the municipality, in accordance with the relevant regulations, is obliged to provide all services and prevent construction and urban violations in accordance with article (100) of the Laws of Municipalities, its Notes and other relevant laws.

Note – Investigating the complaints related to the construction and urban planning violations that have been filed with the relevant authorities before the establishment of the municipality, will be the responsibility of the constructor of the new town until issuance of the final decision, and the proceeds collected will be credited to the account of the new town constructor.

Chapter Two – Terms and Conditions for the holding company and its subsidiaries

Article 23 – All affiliated companies shall provide the required current and development funds for the construction and implementation of related projects through the resources envisaged in the annual budget approved by the company.

Article 24- Investments made from the internal resources of affiliated companies for the creation of educational, service, cultural, artistic and religious spaces will be counted as prepayment for the company’s finalized tax.

Note – All expenses incurred by an affiliate to create the spaces mentioned in this article or for the provision of public services and preparation (including construction, maintenance, repairs and exploitation) are regarded as development project funds and its insurance tariffs will be calculated on the basis of tariffs for the construction projects.

Article 25- In order to enforce Article 7 of the law, the funds and revenues of affiliated companies shall be concentrated on an account determined by the holding company at the treasury. The holding company is required to determine the non-profitable affiliated companies and, in the form of their approved budget, transfer the fund and revenue between affiliated companies and cover its own costs. This transfer is not regarded as the company’s income.

Chapter Three – Specific Rules for Non-Governmental Applicants

Article 26. Non-governmental applicant is required to submit his application for establishment of the new town specified in the approved district plan, along with the following documents to the Ministry of Housing and Urban Development:

1. Designation of the intended area (at least 300 hectares) and submission of sufficient documentation that, if the final approval of the plan is made, the non-governmental applicant will be able to supply the required land.

2. Confirmation by the Ministry of Agriculture and the Environmental Protection Agency that the use of the land concerned is not obstructed

3. Identifying and introducing competent consultant engineers of urban planning and architecture responsible for planning and supervision.

4. Submission of an undertaking that the land is provided, on the basis of per capita amount mentioned in the approved comprehensive plan, for public roads, green spaces, squares, public and social facilities and non-possessable private facilities, and that the lands for the uses referred to in Article 9 of these Regulations are transferred free of charge and that the applicant will comply with all rules and regulations stipulated in the law and this by-law , approvals of the Supreme Council and rules of the Ministry of Housing and Urban Planning.

Article 27- The Ministry of Housing and Urban Development, after receiving the documents and filing them, shall examine the subject of the application and the applicant’s capabilities, the type and location of the land and the location proposed, and, upon confirmation and issuance of the substantive approval, shall notify the non-governmental applicant, to prepare location plan in the form of a district plan and submit it to the High Council for approval.

Note- If the location of the new town is not specified in the approved district plans, it is necessary for the non-governmental applicant to obtain a primary approval prior to determination of the exact location of the new town at the district level. Reviewing and adopting a preliminary decision on the proposed construction of a new town and its approximate location with regard to the national, regional and district physical plans, security, political, social and other requirements of each region in the center of each province is the responsibility of council for planning and development of the province. Final approval of the location of new town will be the responsibility of the Supreme Council.

Article 28. After the approval of the comprehensive town plan, the Ministry of Housing and Urban Planning shall issue a new town permit for the applicant. The non-governmental applicant, without the written consent of the Ministry of Housing and Urban Development, is not authorized to transfer the license to others.

Article 29- Ministry of Housing and Urban Development shall be responsible for supervising , directly or through the Housing and Urban Planning Organization of the province, all measures and construction of the non-governmental applicant and for the detailed implementation of the comprehensive plan, and, in the event of a violation of the said plans or non-compliance with the National Building and Urban Planning regulations must inform the non-governmental applicant and the consultant engineer in writing. The Ministry is also authorized to cancel the permit of construction of the new town in case of non-cooperation of a non-governmental applicant and failure to pay attention to written notices after two (45) days written notice.

Note – The rate of supervision fee will be approved by the Cabinet of Ministers on the proposal of the Ministry of Housing and Urban Development.

Article 30- Any transfer of land in new towns by the non-governmental constructor prior to the separation, preparation and completion of the infrastructure at each stage, and pledging a necessary commitment to the Ministry of Housing and Urban Development to provide the public services required by the inhabitants of that phase and to continue the infrastructure operations of subsequent phases is forbidden.

Article 31- Priority is given to a non-governmental applicant for the establishment of a new town, when both the holding company and the non-governmental sector are applicants.

Article 32. The non-governmental applicant for establishing a new town will enjoy all the benefits and facilities that the Ministry of Housing and urban planning has or will provide to mass-house builders.

Article 33- All provisions of this regulations will also apply to the new towns that have been approved, created and constructed so far.