Property Law in Dubai

Recently the government of the Dubai has introduced new property laws that legalize foreign ownership in selected areas of Dubai.

The law basically states that:

·         GCC nationals will be able to buy property on 99 year leases and on a freehold basis.

·         Non GCC will be able to buy property on 99 year leases and on a freehold basis in selected areas

·         The new law will allow buyers to register the ownership of their property with the Dubai Land & Property Department.

·         A series of by-laws will now be issued which will stipulate which developments will be available for freehold and leasehold, the detailed procedures and costs associated with the registration process, and associated documentation required.

·         All disputes rising from the new law can be forwarded to a new arbitration service to be set up by the Land Department or ultimately to the Dubai courts.

·         Individual properties will be valued by independent values authorized by the Land Department. This department will create a register of approved values.

·         With regard to inheritance discussions are ongoing to allow non-GCC property owners to transfer ownership of property in Dubai upon their death, using the laws of their domicile, as opposed to UAE based law. We are awaiting details of these new rules to be published. Fundamentally it is understood that the new rules will use whatever will has been created by the buyer. It is crucial therefore that any buyer should produce a will.

·         In the designated areas it will be possible for non-GCC residents and offshore companies to buy property in these areas.

·         The ultimate ownership of a property and the only evidence that will be accepted under Dubai law will be at the Dubai Land department. Any other record or documentary evidence will not be considered.

·         When a buyer purchases an off-plan property (i.e. one that is still under construction) then the new law discusses 2 phases. Whilst a property is under construction a purchaser has no rights of ownership, only a signed ‘Sales and Purchase Agreement’; this is the first phase. Once the construction has completed then the purchaser becomes the true owner when they have registered it at the Land Department, which will issue the relevant title deeds.

·         For common hold property (i.e. where you own an apartment in a building) the Land Department will open a main register for the building and then a sub-register for each apartment. The owner will be registered as owning the freehold interest in the unit together with an undivided share in the common areas of the building.

·         With regard to visas there is no direct guarantee that purchasing a property will lead to a full residential visa as it will depend on each individual buyer’s application at the appropriate time. Master developers do provide full services for helping attain a visa. A visa can only be issued when construction of the property has been completed and the owner has taken possession.

To summaries then, Dubai has taken a giant leap forward with the advent of this new law and it has clarified many of the issues that concerned buyers. It is predicted that this process will provide a substantial boost to the property market in Dubai as issues of ownership are finalized. We are already seeing more finance companies introducing home loans/mortgages in the market. Competition should see interest rates and better terms and conditions which can only be good for Dubai.