Dubai Property Law and freehold: Overview:
Prior to 1999 Non-GCC expatriates who resided in Dubai were allowed to own or rent property in accordance with UAE Federal law that approved 99-year leasehold interest.For more information desert safari dubai packages.
In 2002, the Dubai government announced it would allow expatriates to buy freehold property in select projects. This instantly created"The Dubai international property sector." Dubai international property sector.
Previous projects had been initiated by the Dubai Government owned or part owned Emaar and Nakheel Properties.
Emaar started in 1999 with Dubai Marina in 1999 - and then later, with it's Emirates Living Community projects - Emirates Hills, The Meadows, The Springs, The Lakes as well as The Views - which were initially offered on a leasehold basis - and later on a freehold basis.
In May 2002 - the Crown Prince General of Dubai, Sheikh Mohammed bin Rashid Al Maktoum - signed an order allowing foreign investors, including residents of the city - to buy and purchase freehold properties in certain projects - and the Dubai property sector rapidly grew in size and importance immediately following the signing.
Nakheel concurrently launched the Palm Jumeirah - as a freehold project - and all leasehold property previously developed was automatically converted to freehold.
The new freehold policy of 2002 and the decision of the largest government-owned master developers to subdivide master plots in individual plots of sub-par parcels to sell to developers from other companies opened up the market to new entrants such as:
Damac Properties,Dubai Properties,
ETA Star Properties,
Although the freehold liberalization policy was introduced in 1999, it was not fully incorporated in the legislation until the 14th of March 2006 - that's when Dubai government issued an ordinance allowing foreign ownership of property in designated areas of Dubai
The freehold property law in effect , any property that is purchased by a foreigner is registered under the name of the person who purchased it for life . This enables the property to be registered with the Dubai Government Lands Department.
The owner has then all rights to the possession and use of the property. This includes the ability to sell, lease , or rent it.
Property registration, including off plan units The law is No 14:
Law no 14 came into force in Dubai in October 2008 - it requires that all off-plan homes to be registered with the Dubai Lands Department - this will make the Dubai real property market a more secure place for home purchasers and investors - and responds to past complaints from investors , particularly off-plan investors.
The new law also establishes a procedure that is mandatory for any developer seeking to terminate an agreement for sale or purchase.
The new property law demands that all sales of off-plan properties must be recorded by the Land Department before they can be later resold.
This will have a natural slowing down of the pace at which any property can be the subject of speculation as well as be flipped and sold.
The registration information should comprise:
the name of the purchaser and the vendor;
the value of the property;
The location of the property;
any relevant particulars about the mortgage or plan of payment;
the payment history , and fees charged and paid.
Any sale not legally registered will be deemed to be null and void, and therefore ineffective at any level of court.
A temporary registration law went into force on August 31, 2008 - providing that any ownership changes of off-plan properties in Dubai is invalid that is not registered in RERA's Interim Register.
After registration, every registered sale is officially registered in the Land Department Register.
Sale transactions executed before the law took effect are not exempted - and must be recorded in the 60-day period following the legislation's promulgation.
The law will also stop fraudulent developers and agents from charging transfer fees , but they'll be able to charge administrative fees that will be capped - and will only be due upon land department's registration for the transfer.
So bad news for speculators because the registration process will slow down the market - but positive news for homeowners and long term property investors who will have a secured title through a Torrens registration system similar as the one used in Australia.
A new law on mortgages:
New mortgage laws which took effect on October 30, 2008 - stipulates that mortgages are ineligible if not registered at the Dubai Land Department or the new Interim Real Estate Register - and provides all procedures concerning a mortgage and its legal implications for the people who are a part of it.
Additionally, it includes the procedure for execution to mortgage the home and a set of rules for conduct between the lender and the bank.
The mortgage law was designed to give greater control to the Dubai real estate market, in order to protect buyers.
Under law 14 a mortgage is only offered by an accredited financial institution similar to a bank or finance company . The mortgage is required to be fully protected.
Every mortgage must be registered with the Land Department - the details that are required to register the mortgage include:
how much the loan
the worth of the property mortgaged;
the name of the individual to whom the money was given;
as well as the repayment time and the terms.
Real Estate Regulatory Authority [RERA]:
Reforms in Dubai's real-estate sector's rules began in July 2007 when a Real Estate Regulatory Authority [RERAwas created in Dubai to formulate policies and to create awareness of rights and obligations in the property market.
The Strata Law:
The Strata Law was issued and became effective on March 31st in 2008. It outlines the responsibilities of developers and property owners to manage common areas of multi-owner developments such as gated communities or apartment structures.
Dubai Property Court:
A brand new specialist Dubai Property Court was established in September 2008 to adjudicate over property disputes.
It's likely to lessen the work load of RERA that - since its beginning has been overwhelmed by property cases - including several for delays in developer projects and noncompliance with the property developer's original description.
In sum, the new Dubai property laws create an administrative system for the regulation for the Dubai property market, which in many ways provides superior protection for consumers to Dubai property purchasers to that provided by many jurisdictions in the west.