Dubai Real Estate News
UAE Property Market Trends and Reviews

The government in Ras Al Khaimah plans to offer long term residence visas (more than three-year residency permits) to property buyers, revealed a top government official.

The Ras Al Khaimah Government is making an effort to facilitate long term residence visas to property buyers, announced Dr. Khater Massasad, the Chief Executive of RAKIA (Ras Al Khaimah Investment Authority).

Dr. Khater said that he hopes that this will happen in future, and boost foreign investments in property sector.

At present, UAE grants a three-year renewable employment and residence visas to expat workers and professionals in private sectors, sponsored by their employers and spouses, while the public sector employees are granted a five-year visa.

The discussions are on regarding issuance of long-term residence and business visas that are likely to help expatriate investors and businessmen in boosting investor confidence. This initiative, if successful, will boost investments further. Currently property investors are granted three-year renewable residency permits, facilitated through offshore companies and developers.

There is no federal law that guarantees residence visas to property owners, and it is being facilitated through companies. The companies sponsor the residence visas of investors. This enables investors to get their visas, while also being able to live in these properties.

Labels: Latest News, Property Law, Ras Al Khaima

More transparency likely in property-related matters, say developers

Dubai will house a new realty court which deals exclusively with property-related cases from September, announced a top official at the Dubai Courts.

The Judge Mohammed Yousuf A Sulaiman, the Deputy Director for Dubai Courts and Cassation Court's Senior Judge, has revealed that the Property Court will be established as per Law No.1 of year 2003, under the main section of the court called 'The First Instance Court.'

It will include jurisdictions over all properties in Dubai, except those associated to Dubai International Financial Center, which has its own judiciary system.

Yousuf said this is being done as per the directives of H.H. Sheikh Mohammed bin Rashid Al Maktoum, the Vice President and Prime Minister of UAE, and Ruler of Dubai. Following the success of the Labour Court, this new court specializing in all property related matters is being launched.

The Chief of the Court of First Instance (Properties Court), Judge Abdul Qadir Mosa, will be responsible for setting up the property court.

At present all property-related cases are being tried under the Civil Law. In case of any new law being enforced within the jurisdiction of the property court, the law will override the Civil Law for all property cases, said the judge. The judgment passed in the property court, can be confronted in the Appellate Court.

There will be a minimum of ten judges in the property court, and the numbers would vary depending on the number of property-related cases.

Yousuf said that currently there are no cases pertaining to real estate issues that are pending at the Dubai Courts. The Dubai Courts do not hear rental disputes, which is solely being dealty by the Rent Committee of Dubai Municipality.

The establishment of this property court is expected to bring more transparency among developers in Dubai, while investors will continue to be inclined towards taking risk, agreed developers and analysts.

Following the announcement of establishment of the court, the Chief Executive of Amlak Finance, Arif Alharmi, commented that the establishment of the property court is a positive development as real estate market is heading towards maturity, and the value of transactions are on the rise.

Arab Richardson, the Nakheel Spokesperson, said that this court would help in efficiently dispensing matters pertaining to property ownership and mortgage enforcement. This move marks a part of futuristic development of legal process pertaining to property industry.

The Director of Research in EFG Hermes, Stephan Schurmann said that investors would be willing to take risks and there will be less illegal activities by developers. However, the question remains as to how well the court would be implemented and how the structure and setting up of the court would be.

The Chairman of Pearl Dubai, Abdul Majeed, agreed that it is a good initiative and will boost market confidence, and will bring more regulation and transparency to the market, while the property disputes too will be solved quickly.

The Tamweel CEO, Wasim Saifi, says that the initiative to create a separate court, by itself, shows the significance that the Dubai Government gives to realty sector. This specific court meant for realty sector will help in crossing hurdles bringing in greater transparency.

The court should work in co-ordination with RERA, rather than developers having to deal with multiple bodies, as at present the Land Department and RERA handles property cases. It should be brought under one umbrella, the Executive Director of ETA Star Properties, Abid Junaid, was quoted as saying.

Labels: Dubai Real Estate, Latest News, Property Law

The expatriates are less likely to buy properties in Dubai henceforth, following the new regulation by the emirate's real estate regulator, that homeowners are not automatically entitled for long-term residency rights, reveals media reports.

Marwin bin Ghalita of RERA (Real Estate Regulatory Authority) in Dubai, had mentioned that Dubai will introduce short-term visas for foreign investors in the realty sector, and that "there is no direct link" between owning a property in Dubai and obtaining long-term residency rights.

These comments were quite contrary to the earlier statements made by local developers such as Emaar Properties, the leading real estate firm of Arab world.

Dubai, being the commercial hub of Arab world, has been witnessing a property boom ever-since the government permitted foreigners to invest in properties during 2002. Thereafter, a real estate regulation issued during 2006 permitted foreign freehold ownership in certain localities.
Expatriates from neighboring countries such as Pakistan, Lebanon and Iran, who have been facing political instabilities in their respective countries, were being lured to Dubai, over the assumption that owning a property here would ensure long-term visas to them, as it would prove to be a huge asset for them if situation in their own countries turned sour. Dubai was the only market in the region, offering such a link.

The recent comments by bin Ghalita, has now left the foreigners doubtful about the promise of residency from developers, including the Dubai Properties and Nakheel, which are state-owned and has legal backing.

"Developers should not lure investors to property sector with the promise of a residence visa," bin Ghalita commented.

The existence of "safety homes" in Dubai was a main factor for the huge property demand, and any decision on the part of regulators to review the visa status of existing homeowners would bring about "legal hazzles" and may badly hit the image of the emirate, says the media.

Owners are likely to feel that they have been offered a worthless investment, particularly, with the developers being close linked to the state in Dubai.

Already the shares of Emaar Properties slipped 0.45 percent and that of Union Properties by 2.68 percent, following the announcement by RERA on Tuesday.

In the meanwhile, the regulator has submitted a proposal to the government to grant visit visas to foreign homeowners, which may also be made applicable to existing homeowners if approved, revealed bin Ghalita.

About 80 percent to of UAE population are foreigners, with majority from the Indian subcontinent, Iran, and other Arab countries.

Labels: Latest News, Market Trends, Property Law

A new property law has been issued in Ajman, which is expected to take the property sector in Ajman to further heights.

The Member of Supreme Council and Ruler of Ajman, H.H. Shaikh Humaid Bin Rashid al Nuaimi, issued Amiri Decree No.7 and 8, 2008, to regulate the land and property sector in the emirate last week.

The prices in Ajman's property sector have climbed up from Dh.350 per square foot to Dh.500 per square foot over the past six months. Billions of dollars are being invested in the property sector of the emirate, and the growing housing sector in Ajman has drawn considerable interest from the investors.

The 34 articles in the decree legalizes freehold ownership of property and land for UAE and GCC citizens, and the companies wholly owned by them, as well as to the public stock companies. GCC buyers and developers also have the right to own land and properties on freehold basis or on 50-year leasehold basis, renewable in designated areas to be determined and approved by the Ajman Ruler.

The law designates the Department of Land and Property to regulate the sector, and the department is entirely responsible for registration of property rights and long-term leasing contracts.

The bank guarantees need to be deposited for those wishing to invest in Ajman, and that amount should be used only for the project. An amount of five percent of project value will be frozen and will not be released until completion of construction of the project.

The Law stipulates that a developer cannot advertise projects without written approval from the department. The developers will be responsible for maintaining the project for ten years, following handover.

The law mandates a fine of Dh.100,000 on those who practice real estate business in the emirate without license.

Labels: Ajman, Latest News, Property Law

Ras Al Khaimah has passed an order freezing the new rent law, and has announced that the earlier law would remain effective until 1st October 2008. In the meanwhile, new amendments will be done to the new legislation.

A senior government official revealed that the controversial Law No.8 for 2008, issued during 26th May 2008 required amendments, as it was vague.

The new law which states capping of rent increases at five percent for residential properties and seven percent for commercial properties has been criticized as it leaves landlords with an upper hand.

According to the official, Article No.24 of the new law has many interpretations, which gives landlords the right to evict their tenants. This aspect is being reviewed. Besides, the residents had been approaching the Rental Dispute Authority, and the Courts, with enquiries, questions and complaints.

The Rental Dispute Authority is yet to invoke the new law in any dispute, and has not accepted any dispute cases, as it has been awaiting the clarification of the new law from the Emiri Court.
The official revealed that by re-imposing the earlier law with 15 percent rent cap is being done to protect the rights of both tenants and landlords.

Ever-since the announcement of the new law, people have been complaining that it is vague and unfair to the tenants, as it gives the landlords the right to evict them and re-rent the properties.
Several landlords had approached the courts to file eviction cases, but their cases were put on hold, until the government decided to enforce the older law.

Labels: Property Law, Ras Al Khaima

The implementation of bylaws of Law No.3 of 2005 issued by the President, H.H. Sheikh Khalifa Bin Zayed Al Nahyan, for regulating property registration, has already commenced in Abu Dhabi.

The Chairman of the department, Dr. Jua'an Salem Al Daheri, said the property law and its bylaws are being issued to keep pace with the comprehensive development in Abu Dhabi. The bylaws are being issued taking into account public interest after consultation with associated parties.

The bylaws are aimed to regulate affairs pertaining to property registrations in the emirate. This includes the terms and conditions of real estate activities, the parties involved, along with their jurisdictions and responsibilities.

Other factors stipulated in the bylaws include specialties of property registration department, attestation of signatories, search memos and transaction certificates, and terms and conditions of selling and buying properties.

Labels: Property Law

The Dubai Land Department (DLD) has granted permission to the First Gulf Bank to open Escrow Accounts for the registered property developers of the department. The DLD is the 'only' real estate title registry in the emirate to approve the Bank to open and manage Escrow Accounts.

The Escrow Accounts that are operated by the First Gulf Bank will be regulated by RERA (Real Estate Regulatory Authority) which currently licenses about 400 developers in the Dubai market, and is the authority behind implementing the new escrow account law.

The Head of National Housing Loans, at the First Gulf Bank, Al Ghafli, said "The new RERA rules are a major step ahead in the maturing Dubai market. These rules protect the interest of both developers and buyers, while the investors feel secure that their funds are safely deposited by a reputable financial institution, like the First Gulf Bank."

First Gulf Bank has a good reputation in the real estate segment within UAE, offering a range of financial solutions to investors and developers alike. The Escrow Account Law was issued by the Dubai Government last year, aiming to control the malpractices by property developers, and enhance the standard of the Dubai real estate market.

Labels: Dubai Real Estate, Mortgages, Property Law

A senior government official has revealed that, as per the new Condominium Law, the property owners have been assigned the responsibility of levying service charge on freehold premises. Hence master developers will no longer be able to levy exorbitant service charges on freehold premises.

The Article No.22 of the Condominium Law (Law N0.27 of 2007) states "The owner of each unit shall pay to the Owners Association, his share of yearly service fee to cover the cost of management, maintenance, operation and repair of common parts."

This share will be defined on the basis of the area per unit, out of total area of joint property. The developer, irrespective of being main or subsidiary, will have to pay its share of fee for unsold units. No owner of any unit will be allowed to give up his share of common parts to avoid paying the yearly service fee, states the article.

At present, the master developers and property developers of individual towers who are developing major neighbourhoods in the freehold and leasehold areas in Dubai, are fixing and levying service charges at the rate of Dh.8 to Dh.12 per square feet, which is considered very high. This has led to conflict between home owners and master developers are freehold areas.

As there have not been any proper laws, some developers have levied even higher charges which have led to discontent of the buyers. With the new Condominium Law in place, the situation is expected to change for the better, as property buyers can dictate and fix service charges of their own premises, rather than depending on the developer.

The Condominium Law, which compliments the freehold Property Registration Law, is also expected to help facilities management sector and the maintenance firms, as it will open up freehold neighbourhoods for competition, which have been otherwise, so far, monopolized only by master developers.

Labels: Dubai Real Estate, Property Law

The Annual rent cap in Abu Dhabi has been reduced from 7 percent to 5 percent yesterday. This was done to regulate the high rentals and housing crisis in the emirate. The decision is to take effect immediately.

The decision has been issued by the Abu Dhabi Executive Council, based on Law No.20 for 2006, that speaks about landlord-tenant relationship, and aims at curbing the negative impact of high rentals on the emirate's competitiveness, sustainable economic growth and social stability.

Such a move has been initiated in response to recent reports which pointed out an unprecedented increase in rents. The new contract will remain subjected to inflationary pressures, based on factors such as the cost of construction, and shortage of supply.

The Chairman of the Construction Committee, Khalfan Al Ka'abi, said "This is a step in the right direction, and this will have a real effect on residents. However, some more time may be required to solve the housing crisis completely."

Certain units will be delivered this year, but, the majority of the units will be delivered to the market only in 2009, and this supply would ease the market to a great extent, he added.

Labels: Abu Dhabi, Property Law, Rentals

The Dubai Government is shortly expected to announce a tenancy law, that will re-define the landlord-tenant relationship, while also managing the rent disputes, and a comprehensive legal framework would be introduced, for the booming residential rental market in Dubai, said a top government official yesterday.

At the moment, it is the responsibility of Rents Committee to settle disputes through an informal arbitration system. This is likely to be replaced by a new tenancy law, which has been already approved by H.H. Shaikh Mohammad Bin Rashid Al Maktoum, the Vice President, Prime Minister of UAE and Ruler of Dubai.

The Assistant Director General of Dubai Land Department, Mohammad Sultant Thani said that all issues pertaining to rents, tenancy, bachelor accommodation, subletting, landlord-tenant disputes and all other social aspects, will be tackled by the new law. However, whether the rent cap too, will be regulated through the new law, is yet to be known.

Increasing rents have been a big cause of worry for nearly 85 percent of Dubai's expatriates, who form 1.44million of population, a majority of whom live in rental units. During the past few years, rents have hiked rampantly.

In the meanwhile, Thani revealed that so far, the Dubai Land Department, has registered 72,000 units ever-since the department was established in 1960s, while last year, we have registered 11,000 units.

Thani mentioned that the new law will further strengthen the Dubai property market, as there has been a steady growth in the property market ever-since expatriates were allowed to own property. Once the law takes effect, all existing freehold apartments, residential units and villas for rent, will come under the law.

Labels: Dubai Real Estate, Latest News, Property Law, Rentals

A new property index will soon be released in Dubai, which would be of help in establishing appropriate rents for properties in the emirate, so as to control the shooting rental prices.

The Real Estate Regulatory Authority (RERA), has said that the new index would come into effect from 15th of this month, setting up the minimum and maximum chargeable rents for properties in particular developments.

With the introduction of property index, the landlords are left with no choice but to set rents within the stipulated limits. The tenants and those in the look out for rentals, will also be benefitted as it will serve as a guide to ensure that they are not being overcharged. Any complaints thereafter could be then reported to the rental dispute committee.

Dubai has issued an annual rent cap of 5% for 2008, which is lesser in comparison to the 7% capping of 2007.

Labels: Dubai Real Estate, Property Law, Rentals

The Vice President and Prime Minister of UAE and Ruler of Dubai, H.H. Shekh Mohammad bin Rashid Al Maktoum, has issued a decree on 27th December 2007, lowering the annual rent cap in Dubai by 5% from the existing 7%, beginning 1st January, 2008. This rent cap would be implemented by the RERA (Real Estate Regulatory Authority) and the Dubai Land Department (DLD) in 2008.

This new rent cap would be applicable to new tenants, whose rents were not increased last year. However, for those tenants, who have had a rental increase in 2007, there will be no new increase.

At present, Ras Al Khaimah and Fujairah have both had a rent cap of 15%, while Abu Dhabi maintained 7% rent cap.

This move by the Dubai government has been much appreciated by the residents, realty developers and brokers, as strong demand and lack of adequate supply, had increased rents tremendously during recent past, which is a cause of concern among residents in Dubai.

The RERA Chief Executive, Marwan bin Ghalita, has warned that any increase beyond the proposed cap, is in violation of the rule, and in such a case, tenants should not agree to sign the contract.

Labels: Dubai Real Estate, Latest News, Property Law, Rentals

Abu Dhabi is planning to create a legal framework to protect the emirate's property investors to support the current property boom, said senior government officials.

Speaking during a seminar on 'Abu Dhabi Property Laws', the Undersecretary of the Department of Municipal Affairs, Ahmad Mohammad Shareef, said Abu Dhabi is currently witnessing a construction boom that is expected to continue during the next 15 years. The recent launch of Al Raha Beach, Reem Island and Saadiyat Island are sufficient proof of evidence for this.

However, an essential element for success of mixed-use projects depends is, owning the right regulatory framework that provides legal protection and clarity to property owners and investors. Currently, the Al Tamimi & Company is drafting "implementation regulations" that provides guidance on various aspects of property laws. The lawyers and property specialists have requested the Abu Dhabi government to establish a regulatory body, just as Dubai's RERA.
The experts have also urged the government to implement a property registration system in the emirate. Analysts are of the opinion that property valuations in Abu Dhabi are cheap and have further potential for growth.

With the Abu Dhabi property sector gaining credibility, the market remains extremely tight, with high growth in rents, which grew by 22 percent, and prices, which grew by 18 percent. Further improvement in Abu Dhabi's current property laws are necessary, as registration of property rights and ownership rights are expected to have a positive impact on property market.

Although, there were two laws that were issued in 2005, pertaining to ownership and registration of property rights in Abu Dhabi, the law does not stipulate the rights of the land upon which the apartment or building is located. A Strata Law is likely to be implemented shortly, that would define the rights of owners’ of units and the common property in multi-owned buildings and communities.

Labels: Abu Dhabi, Latest News, Property Law

Labels: Dubai Real Estate, Property Law

Labels: Market Trends, Property Law, UAE

Analysts are of the opinion that imposing a 'voluntary' rent cap, could turn the current situation in favour of Landlords, leading to a rampant increase in rent rates.

This statement came, following a leading government official's statement that Dubai's rent cap may become voluntary, permitting landlords to adjust rents on par with current market rates.

The CEO of RERA (Real Estate Regulatory Authority), Marwan bin Ghalita, said that the cap on price increases for renewed rents, when being renewed during the following year, should be done at a lower level than the current seven percent.

However, he emphasized that in case the commercial or residential property Landlords are of the opinion that the cap is responsible for keeping rents below the market prices, they can argue for an adjustment, based on benchmark rate, recommended by RERA.

According to Bin Ghalita, this system could be successful in reducing situations where the Landlords tend to evict tenants under silly pretexts for the sole reason of getting better rents.

"We will have a rent cap, but will permit the Landlord to adjust the rent based on market value. Both parties should be happy. If you are a tenant staying in an under-priced property, then there should be a way to resolve this. Currently, landlords feel that they have the option of kicking the tenant out of the property and re-renting it. We want to stop this," Bin Ghalita quoted.

He added that despite this, landlords will not be in a position to increase rents during the second year of a contract. In case the Landlords feel that the rent cap is responsible for keeping prices below market rates, they could seek help of Rent Committee to argue their case.

RERA has been assigned the task of registering all rental contracts in Dubai, allowing it to build up annual produced rental price index for every community in the emirate - a benchmark for rental rates.

Currently most residents feel that Landlords with an intention to avoid rent cap for renewal of contracts, are re-leasing the properties to new tenants at a higher rate.

Labels: Latest News, Property Law, Rentals

A senior official in the Abu Dhabi Rental Disputes Resolution Committee has clarified that Landlords cannot evict tenants for the sole purpose of change of business, from residential buildings to hotel apartments.

The Chairman of the Resolution Committee, Mohammad Rashid Al Hameli, said "Changing business from residential building to hotel apartments is not a legal ground to evict tenants".

Al Hameli mentioned that legally landlords do not own the right to evict tenants, unless in specific cases, such as approved demolishing for personal use, or for tenants failure to pay the rent, or subletting the property without the approval from landlord or for violating public norms.

In case of demolishing the building, the tenant should be informed about it six months in advance, and in case it is found that the landlord has not been living in the property after evicting the tenants under the pretext of personal use, or if the property has been re-rented to another party, the tenant can place a complaint before the committee, said Al Hameli.

Al Hameli also clarified that tenants should not obey any eviction orders by the landlords or other authorities, unless the eviction order has been approved by the Rental Disputes Resolution Committee. Speaking on eviction notices, Al Hameli advised that tenants have the right to receive notices but should sign clearly that although they are in receipt of the notice, the eviction order was rejected. At the end of tenancy contract, the tenants can then submit a complaint to the committee and deposit the rent or any installment pertaining to the building, as per the terms of contract in cash, so that it could be renewed.

It has been found that off-late, there is an increasing tendency for landlords to give away the building to hotel operators on a yearly lump sum rental basis so as to convert the building to hotel apartments.

Tenants have requested the Rental Dispute Resolution Committee to issue clear guidelines for tenants to understand their rights, particularly the circumstances under which they could be evicted from the building.

Labels: Property Law, Real Estate News, Rentals

Standard Chartered, the leading international bank in UAE has announced their entry into an Escrow Account Agreement with Dubai Land Department (DLD).

Through this agreement, Standard Chartered will be formally authorized as an approved bank for opening and managing Escrow accounts of property developers registered with DLD.

This makes Standard Chartered as one among the other few banks in UAE to provide both Islamic Banking Escrow Accounts and Conventional Accounts, thereby giving a wider choice for potential property investors.

The signing ceremony at the DLD office, involved the participation of Sultan Butti bin Mirjin, the Director General of DLD, Nigel Jones, the CEO of Standard Chartered-UAE, and Sultan al Suwaidi, Chief Advisor of Standard Chartered-UAE.

Mirjin said "The Dubai Land Department has adopted a practical approach for development of existing legislation in the real estate sector of the emirate to ensure the safety of investors and to boost their confidence levels in this sector."

The agreement is inline with the new Law Number 8 of 2007, which was issued by Shaikh Mohammad bin Rashid Al Maktoum, the Vice President and Prime Minister of UAE and Ruler of Dubai, and helps in safeguarding any party who goes on to sell a unit from a property development plan, before the actual completion of the project or during the construction phase. Such payments should be placed in an authorized Escrow agent accounts until the completion and delivery of the development.

Jones mentioned that recently Standard Chartered launched the first dedicated mortgage center in UAE in the Emaar Business Park, which revealed its commitment towards the property sector in UAE. This agreement further emphasizes the involvement of the Bank with the property sector, while highlighting the support that the Bank extends to the initiatives backed by government in UAE.

Labels: Dubai Real Estate, Mortgages, Property Law, Real Estate News

Shaikh Sultan bin Mohammed Al Qasimi, the Crown Prince and Deputy Ruler of Sharjah, and Chairman of Sharjah Executive Council has passed the new rental by-law for the emirate, which states that the landlord cannot increase the rent until three years after signing the lease agreement, and every two years thereafter. The bylaws were issued to help the rent dispute committee jurisdiction to handle complicated procedures in a simple manner.

Numerous factors such as the quality of the property, the location, the number of storeys, the finishing of the building and the disputed property, the age of the building, the level of service, the space of property and the like, needs to be taken into consideration while deciding a rent hike.

Subletting the property is not allowed, except with the written approval by the property owner. In such cases, the tenant can transfe