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The New Dubai Property Law - Part IV



The New Dubai Property Law - Part IV

In the fourth and final continuation on the new Property Law, the topics discussed will be:

Unregistered long leases

Unregistered long leases

As mentioned earlier, as these fall outside the ambit of this new Law, the Rents Committee will retain jurisdiction over any disputes arising between these landlords and tenants. Other Land Department Functions Article 6, point 7, requires the Land Department to 'lay down the rules in connection with the evaluation of Real Properties'?. Apparently, the Land Department intends to employ its own expert valuers. The role of these valuers will be two-fold. Firstly, the Land Department's valuers will be asked to verify a property value in cases where the parties to a transaction have apparently undervalued the property for any reason. This is so that the applicable registration fee can be properly assessed. Secondly, where a prospective purchaser of a property requires a valuation, he will have the option of commissioning this valuation from the Land Department in return for a fee.

In due course, the Land Department will look to establish a register of approved external valuers who can also provide this valuation service. Article 6, point 6 requires the Land Department to 'lay down rules in connection with regulating and maintaining a register for real estate brokers'?. Our understanding here is that real estate brokers will still need to obtain their Trade Licences from the Dubai Department of Economic Development, but as an additional requirement, if they wish to be involved in the sale and purchase of property, they will need to also register themselves with the Land Department. The specifics are still being considered by the Land Department, but it is anticipated that certain criteria will need to be met by a broker as a condition of his registration and that a mandatory Code of Ethics will be imposed upon all brokers dealing in the sale and purchase of property. Breach of this Code of Ethics by a broker will potentially lead to him being struck off the register and therefore unable to lawfully continue his business. Inheritance Article 11 of the new Law provides that 'Any Inheritance Declaration shall be registered in the Real Property Register if the inheritance includes Real Property Rights. No dispositions by any heir in connection with any such rights shall be valid or effective against third parties unless such dispositions are registered in the Real Property Register'?.

This Article is referring to the process here in Dubai whereby the relatives of a deceased person must apply to the Dubai courts for a Declaration identifying the beneficiaries of the deceased. The beneficiaries may then apply to the Sharia'h court to institute succession proceedings, in which the assets of the deceased are ascertained. At the end of that process, the Inheritance Declaration must be registered on the deceased's title at the Land Department and only then are the beneficiaries recognized as the owners of the property. But what Law will the courts apply in determining who the beneficiaries are of a deceased foreign national, and will the Will of the deceased by recognized? The Federal Civil Code, Article 17 (5), provides that the Law of the UAE will apply to Wills made by expatriates disposing of their real property located in the UAE. This gave a great deal of concern to foreign owners of property in Dubai as it suggested that Sharia'h Law would apply and override the terms of any Will.

However, a new Federal Law was passed at the end of 2005, the Personal Affairs Law (No. 28 of 2005). Whilst it is not entirely clear, it would seem that as a result of the new Personal Affairs Law, a foreigner can opt for the Laws of his own domicile to apply on the question of inheritance of his property. The Land Department, we believe, supports this view and it is expected that guidelines will be issued by the Land Department to confirm the situation in due course. In conclusion, In reply to the question on whether this new Law provides legal confirmation of a foreign investor's right to own property in these projects, secure registration of his title at the Land Department and enforce the owners freehold property rights in Dubai, we believe that this Law does provide the appropriate legal framework that we have been waiting for. However, as this Law itself acknowledges, it is just a starting point and more regulation and legislation is required to meet the needs If a market that is rapidly growing in both size and complexity. In time, this Law will be supplemented by Rules issued by the Land Department related to administrative procedures and property related matters and other land laws, such as the Strata Law, will be issued.


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