Dubai Property Law

Basic rules

Whereas the fundamental principles of buying a home are the same everywhere, property law, and its local interpretation, varies widely between different countries. If you have already explored the possibilities of buying in a foreign country, you will be very aware of how different the local laws can be, compared with your own country.

Dubai status

Property law, like any law, is also a dynamic area; minor (and sometimes major) changes are constantly taking place, even in the most mature of property markets. In the case of Dubai and the UAE, property law is very young and still taking its long-term shape, although the key elements are straightforward to understand.

1) By-Law No (85) of 2006
Regarding the Regulation of Real Estate Brokers’ Register in the Emirate of Dubai

2) Law No. 8 of 2007
Concerning Guarantee Accounts of Real Estate Developments in the Emirate of Dubai

3) Law No. (13) of 2008
Regulating the Interim Real Estate Register in the Emirate of Dubai

On the 14th of March 2006, Dubai's government issued its long-awaited law legalising foreign ownership of properties in designated areas of Dubai, but doesn’t give property owners permanent residence visas or an automatic right to work in Dubai.

The Law No. 7 that legalizes freehold ownership of land and property for UAE and GCC citizens, while allowing the same rights to non-GCC expatriates to pre-designated areas that will be approved by the Ruler of Dubai.

Non-GCC expats living in the United Arab Emirates (UAE) were previously only permitted to rent property, or own property on the federal law approved 99-year leasehold basis. This all changed in 2002, when the Dubai government permitted the ownership of freehold property to expats, which has changed the real estate industry in the Middle East and Gulf regions.

The foreigners will have the privilege to lease or purchase the land, after getting endorsement from master-developers, (Emaar, Al Nakheel, and Dubai Properties).

A land will be registered in the name of a foreigner only after the developers submit a no-objection letter, stating that all the payments for the transaction have been made in full.

There are three kinds of ownership proposed in the legislation: freehold, usufruct, and common hold. The owner will have complete ownership rights over a free hold property and the building in this case will be in the owner's name.

The second category is usufruct or long-term lease. The law characterizes 'usufruct' as the right to use another's property short of destruction or waste of its substance. The right of usufruct, as per the law, should not be for less than five years. This will most probably be a long-term lease whose maximum validity period will range from anywhere between 50 to 99 years.

Common-hold allows leaseholders to dispense with their landlord and obtain a share of the freehold. Registration fee for the transaction will be two per cent of the total value of the property, of which 1.5 per cent has to be paid by the purchaser and the rest by the seller. After the payment of the whole amount, the owner is free to either bequeath the property or sell it.

The law also specifies the functions and responsibilities of the Department of Land and Property, which has so far been doing all the work by virtue of practice, sans legal clarity. As per the law, the department will determine the survey areas; approve the land map and the fees for the services provided by the department.

The confidence of the investors and buyers as the new Dubai property law ascertains on them the 100% foreign ownership for the expatriates. More banks will begin the facility of home finance as there is a guarantee in the ownership of the properties.