Abstract

Goodwill is among the financial rights associated with the lease of commercial premises. These rights are designed to protect commercial tenants and recognize a trader’s right to retain customers and to have priority in renewing the lease. Under the Landlord and Tenant Relations Act of 1977 (1356), the transfer of such rights is deemed valid only through an official notarized deed. However, the 1997 (1376) Act contains no provision regarding the necessity of formal registration for such transfers. In light of the enactment of The Law on the Requirement to Register Real Estate Transaction, and considering Articles 1 and 4 of this law, the present study—conducted through descriptive-analytical methodology and based on desk studies—aims to examine the applicability of Article 1 to the transfer of goodwill rights and the necessity of their formal registration.

Two perspectives are explored:

• The first perspective asserts that, based on Article 1 and the cases stipulated therein, as well as Article 4 of the said law, the transfer of goodwill rights falls under the scope of Article 1 and must therefore be carried out through official registration.

• The second perspective, based on the legal nature of goodwill rights and their connection to Article 1, as well as the principle of optional registration of documents, the principle of numerous clauses, and considering the mandatory nature of the Law and the burdensome legal obligations governing registration of transactions, suggests that the legislator did not intend to apply Article 1 of the said law to goodwill transfers. Instead, the right to conduct business or trade—as defined under the 1977 Act—is transferred exclusively under that law’s provisions and only via notarized deed as stipulated therein.