Dubai Real Estate Law

Attention! This is the First draft of the law that will be implemented when it is published in the Court gazette in the nearest future.

The new property law in Dubai that everyone has been waiting for, was issued on 14/03/06. The law states that expatriates are now among those who can own properties in Dubai. Law No.7 of 2006 stipulates that freehold is limited to UAE and GCC citizens and companies wholly owned by them, as well as public shareholding companies. The law also stipulates that upon approval of Dubai's Ruler, non-UAE nationals may be given the right to own properties in some parts of Dubai. The so-called freehold areas of Dubai that would be available for expatriates to own with ruler's approval will be later designated.

So Expatriates may be given the right to acquire a freehold property, or a 99-year lease property, in areas designated by the Ruler. The new law contemplates the issuance of freehold title or the grant of 99-year lease holds to non-GCC nationals in some designated areas of Dubai. The law also states that Dubai Land and Property Department' register will record any conditions, pledges, restrictions, or other commitments that may apply to the title.

Article 24(2) of the new Law contemplates the registration of a mortgage against title for a property. Therefore, the law makes provisions on how to register a pledge which can be a home mortgage granted to a financial institution against the title of a property owned by a non-GCC national. More detailed provisions about the grant of the mortgage with respect to real properties are contained in the Civil Code which has no restrictions for borrowing funds that will not be used for a home mortgage. So one of the main benefits for this new law is that financial institutions can use properties in Dubai as collateral with respect to home mortgages.

The law stipulates the setting up of a property registration office at the Dubai Land and Property Department which will be responsible for documenting property rights and their amendments. On the Issue of inheritance, Article No. 2 states that the certificate of the rights of heirs of a deceased must be registered with the ‘Dubai Land and Property department' property register if the estate includes property. On the other hand, the law also states that no actions of such heirs with respect to such rights shall be effective unless registered in this register. The office records hold the ultimate evidence against all - without exceptions and its records cannot be challenged except in the case of forgery.

The new real estate property law does not distinguish between residential and commercial property. The law states that, a multi-storey property is considered a single property unit that shall be given one entry in the property record. All apartments of a single property unit will have supplementary records that include names of the owners of its apartments, stories and any common facilities.

There will also be initial registration fee payable to the Dubai Land and Property Department upon registration of the title in the name of the owner. Once the property is registered in the name of the owner, the transfer fee payable upon sale of the property by the owner to another owner will be payable to the Dubai Land and Property Department and no longer to the developers.

The law also includes 11 chapters compromising 29 articles covering the issues of definitions, general rules, the implementation system of property hold and the jurisdictions of the Dubai land and property Department.