Generally, only UAE nationals, or entities that are wholly owned by UAE nationals, may own real property in the UAE. Certain Emirates allow for GCC nationals to own real property as well. However, foreign parties operating within one of the designated freehold areas or free zones may apply for a freehold interest in real property.
The Land Registration Law of the Emirate of Dubai or “Dubai Property Law” allows foreign non-GCC citizens to have freehold ownership of land in certain areas designated by the UAE government. In order to establish ownership rights over their property, property owners must register with the Department of Lands and Properties. Article 4 of the Dubai Property :aw limits non-UAE and GCC nationals to a freehold interest or a usufruct or leasehold right to a period not to exceed 99 years. It should also be noted that companies with foreign shareholders, with a few exceptions, would not be considered a UAE or GCC national for the purposes of Dubai property law.
Properties outside those designated by the Dubai Government are not available to foreigners. Leases in these areas cannot be registered and are enforceable only as personal contractual rights between parties. Therefore, the Dubai Rents Committee will hear disputes with respect to leases in these areas while disputes regarding real property rights will be heard by the Dubai courts.
It is highly recommended that property owners in Dubai register their property. Third-party rights should be registered on a property’s title as well. If properly registered, any transfer of interest will also include the third-party interest. If there is no registration then the third party risks limited recourse to a breach of contract claim against the original owner. Al Nukhbah counsels clients on all aspects of property law in the UAE. Our Real Estate practice includes counsel on property dispute resolution, drafting and negotiating of sale & purchase agreements and lease agreements, foreign ownership of property, real estate development and the use of REITS, and local licenses for residential or commercial use of real property.