WadiOnline News - Overview Dubai's Expanding Property Law

Overview Dubai's expanding property law

Publish Date: 2010-01-25 00:00:09 Story Code: 24631

The Dubai Land Department has disclosed that it is looking at six pieces of legislation for the property sector this year. Here is an overview of the changes that could be on the horizon.

1. Conversion of granted title to freehold title

For decades, Emiratis have been granted land by the Government for development, whether that meant an office tower, a residential apartment building, farmland or their own home, but with restrictions on sales. However, the slowdown in the property sector in the past year has left many of them in a difficult spot because they cannot sell the project or mortgage it.

The Dubai Land Department is considering a draft law to allow Emiratis to convert their land grant to freehold title, which would allow them to sell it to another Emirati or GCC national. The process would make this land a �much more flexible asset�, said Lisa Dale, the head of the property practice at the law firm Al Tamimi and Company.

2. Further protection for purchasers of off-plan property

New safeguards for off-plan property investors are expected to include a refund or replacement property for buyers where the developer delivers a defective property, as well as financial penalties for late delivery. The laws would also establish the grounds upon which a purchaser may demand cancellation of the property contract if, for instance, the developer refuses to link payment plans with construction milestones.

The goal is to balance the power between developers and buyers.

3. Regulation of property valuers and property conveyancers

The providers of these services, which relate to the final processes of buying a home, will require a licence from the Dubai Land Department and the Dubai Department of Economic Development to operate in the emirate.

4. Property brokers trust account law

In some sales, the property broker will act as the middleman between a buyer and seller and hold onto the cash. The problem is that many of these brokers deposit this money into accounts in their own name, creating a risk that the account becomes available to creditors or other parties. This law will require the property broker to use the services of a licensed escrow agent.

5. Implementing regulations on strata law

The long-awaited regulations for the strata law, which governs how owners in a building take care of common property like lobbies and elevators, are expected this year. The Dubai Land Department says it expects to �shortly issue the General Regulation�.

6. Establishment of new property investments

In many developed economies, real estate investment trusts (REITs), which are like mutual funds for property, are a common method of investing in residential, industrial and commercial property without having to worry about managing the actual assets.

A new law in Dubai will pave the way for REITs and other property investments on a larger scale.

The law will �introduce for the first time in Dubai a legally recognised, regulated structure for the establishment and management of collective investment schemes analogous to the typical property fund and trust structures that exist in other jurisdictions�, according to officials at the Dubai Land Department.

These investments would �potentially provide a boost to the Dubai property market by generating an increased level of collective investment activity�, the Land Department said.

© The National 2010. All rights reserved.

Share this story:

Digg

Facebook

Del.icio.us

Technorati

Printable Copy :

Source: The National
Read : 62