The term “real estate” is not defined in any UAE legislation. However, Article 101 of Federal Civil Transactions Law No. 5 of 1985 (“Civil Code”) states that “anything of a permanently fixed nature and which cannot be removed without damaging or altering its surroundings shall be regarded as real property.”
Law No. 7 of 2006 Concerning Land Registration in the Emirate of Dubai defines property as “any immoveable object with a fixed space that cannot be moved without destroying or changing its feature” and Law No. 13 of 2008 Regulating the Interim Real Property Register in the Emirate of Dubai defines real property as “land and any fixed structures constructed on it which cannot be moved without damage or alteration to its structure.”
The UAE is a civil law legal system based on a constitution, Sharia principles, federal law and local emirate laws and regulations. In addition to this, some free zones within Dubai, such as the Dubai International Financial Centre (DIFC) have their own real estate laws and regulations.
The Civil Code governs the day-to-day matters in the UAE and the emirates will have jurisdiction in all the matters not conferred upon by the federal authorities as per Articles 121 and 122 of the UAE Constitution of 1971 (as revised in 2009).
Dubai
In Dubai, the following specific legislation exists for matters, such as:
Abu Dhabi
In Abu Dhabi, the following specific legislation exists for matters, such as:
Real property rights are defined as in rem rights over real property, as opposed to being purely contractual rights, and include musataha and usufruct rights. All real property rights are required to be registered, regardless of the term length.
Dubai recognizes freehold title to land, leasehold, usufruct and musataha interests in land, off-plan property and short-term leases. In Abu Dhabi, all real property rights, including rights of usufruct and musataha, are required to be registered, regardless of the term length.
Law No. (7) of 2006 Concerning Land Registration in the Emirate of Dubai requires that all dispositions relating to real property rights must be registered at the Dubai Land Department otherwise they will not be deemed effective.
Dubai Law No. 13 of 2008, as amended by Dubai Law No. 9 of 2009, requires real estate developers to register off-plan property in the Interim Register (Oqood) also maintained by the Dubai Land Department.
Short-term leases must be registered on the Ejari system, maintained by the Dubai Land Department.
Dubai
In Dubai all instruments affecting land are registered at the Dubai Land Department.
Abu Dhabi
In the Abu Dhabi Global Market (ADGM), all real estate transfers that are recognized by the ADGM must be registered with the ADGM Land Register.
Dubai
In Dubai, short-term leases (i.e., with a term of less than 10 years) must be registered with the Real Estate Regulatory Agency (RERA) on the Ejari system.
Long-term leases of not less than 10 years and not more than 99 years must be registered on the Real Estate Register of the Dubai Land Department.
All mortgages must be registered at the Dubai Land Department pursuant to Law No. 14 of 2008.
A developer must register all off-plan property in the Interim Register at the Dubai Land Department.
Abu Dhabi
In Abu Dhabi, there is a differentiation between a long-term lease and short-term lease by the term. A short-term lease (i.e., with a term of less than four years) must be registered on the Tawtheeq system and typically, a tenant will be responsible for the registration process and fees. Leases for a term over four years but less than 25 years will be registered with the Tamleeq system and the responsibility for registration may be provided for in the lease. Any leasehold interests located within the ADGM must be registered with the ADGM Land Registrar.
Normally, landowners will have to produce the following, in addition to the Oqood certificate for off-plan property:
Dubai
Abu Dhabi
No. The title deed must be physically inspected.
Prospective buyers can conduct an ownership certification validation search on the Dubai Land Department website, which will identify the owner and if there is a mortgage over the property, but it does not replace a review of the physical title deed.
The right to own real property in Dubai is restricted to UAE nationals, nationals of the Gulf Cooperation Council (GCC) member states and to companies fully owned by these, and to public joint-stock companies. Non-UAE nationals may, in certain areas and subject to the approval of the Ruler, be granted the following rights:
Dubai
The designated areas where foreigners are permitted to acquire leasehold or usufruct interests in property are determined by the Ruler of the Emirate of Dubai by way of decrees and regulations issued from time to time.
A foreign company can only own freehold, leasehold or usufruct in the designated areas of Dubai by establishing one of the following company vehicles:
A fund or a trust cannot own property anywhere in Dubai.
Within the DIFC, all foreign nationals, foreign companies and GCC nationals have a right to acquire real estate without restriction on the type of vehicle used.
Abu Dhabi
In Abu Dhabi, unless the real estate asset is located within an investment zone, only individuals or companies ultimately wholly owned by UAE nationals are able to hold real rights (rights in rem) in real estate. Essentially, the four categories of rights in property that the foreign ownership restrictions apply to are as follows:
The investment zones are as follows:
Yes. Pursuant to Article 1135 of the Civil Code, local and federal authorities can acquire real estate compulsorily if it is necessary for the public’s benefit, such as the construction of highways, and just compensation is paid. In addition, each emirate can pass its own laws to regulate compensation. The quantum of compensation payable depends on the value of what is expropriated along with loss of profit and any other damage that may arise as a result of the expropriation.
Each emirate can pass its own laws to regulate compensation. Dubai Law No. 2 of 2022 provides that the Acquisition Committee rules on applications for compensation by persons affected by expropriation.
The Civil Code provides for the following types of tenure:
Property is usually held in the name of individuals as tenants in common or in the name of corporate entities.
Generally, a special purpose vehicle is used to purchase or develop land due to the ability to ringfence liability.
Structures used to invest in real estate include joint-stock companies, limited liability companies, a Jebel Ali Free Zone company, a Dubai Multi Commodities Centre company, a company incorporated in the ADGM or a company incorporated in the DIFC.
The acquisition of real estate is usually financed by the buyer’s own funds and by bank loans (if the buyer does not have enough funds or if the buyer wishes to have financing).
A transaction will usually begin when heads of terms or a memorandum of understanding is produced by the broker on behalf of the seller and the buyer. This document sets out the fundamental commercial terms that have been agreed between the parties. Once the seller’s lawyer has received the heads of terms or memorandum of understanding, they will prepare the initial draft of the sale and purchase agreement. In the meantime, the buyer’s lawyer will carry out due diligence, the results of which will steer the negotiations on the sale and purchase agreement received from the seller.
Dubai
To effect registration in Dubai, a standard Form F agreement produced by the Dubai Land Department will be entered into by the seller, buyer and broker and lodged with the Dubai Land Department. The agreed sale and purchase agreement will be appended to Form F.
Abu Dhabi
To effect registration in Abu Dhabi, a standard form lease agreement produced by Tamleeq (for a term over four years but less than 25 years) or Tawtheeq (for a term under four years) will need to be submitted to the Abu Dhabi Municipality.
Generally, a buyer would require that a seller provides an indemnity for any liability that the seller may have following completion.
If a seller has provided any indemnities, then it may retain liability following a sale.
On expiry of a lease, a tenant is obligated to hand back the property to the landlord in the same condition that it was at the beginning of the tenancy, subject to fair wear and tear. Similarly, a landlord must hand over a property to a tenant in good condition.
In respect of damage to the environment, liability remains with the person responsible.