Monday, November 22, 2010

Clarification needed

It's all too frequent that the papers report an extremely important subject with an utterly confusing article.

There's another one from what is no longer Emirates Business 24/7 but emirates247.com

It's about freehold property ownership in Dubai, a subject important to a lot of people.

Going back to the property boom beginnings, Sheikh Mohammed decreed that non-GCC foreigners could buy freehold property in special designated areas.

I think I'm right in saying that of the emirates offering property ownership to foreigners only Dubai declared it to be freehold. The others offered leasehold of 99 years.

In the Court of Cassation there was a case involving a property dispute between two expat owners of a villa.

According to emirates247, during the case the court ruled that ...in some areas such as freehold property, expatriates have the right of ownership limited with time...have the right to use property (rent or live in it) or alternatively possess right to rent for a period not exceeding 99 years.

Then an even more mystifying: The Ruler's decree is a command and ownership cases require immediate retroactive action, ruled the court.

What?

So freehold property was offered, many people bought on that basis, now the Court of Cassation seems to have declared that it's actually leasehold.

It's not the clearest article you'll ever read but I'm sure that's what it's saying.

I'm sure everyone who bought on the basis of their property being freehold would like some clarification.

The article is here.

9 comments:

alexander... said...

I really don't want to be unsympathetic, but the Federal Law has always clearly stated that property cannot be owned by foreigners.

Anyone who believed that Dubai's Freehold truly meant 'freehold' and not a 'workaround the law by cludging what is effectively a 99 year tenancy contract in the name of the developer', was being almost impossibly naive.

Sorry, but that's the fact of it. The shiny was always a lend, not a give...

Anonymous said...

The tricky part in this case is;

1. Mirdif is not considered “freehold”
2. The contract between both parties was signed in 2002, therefore before Law no. 7 of 2006.

Its not as simple as it looks. And the article doesn’t even come close to explaining it.

Lebanon News: Under Rug Swept said...

An English translation of the decree can be found on the RERA website. Article 4 of the decree states:

Subject to the Ruler's approval and in specific areas in the Emirate as determined by him, non-national persons may be granted the following rights:
A. The right to freehold ownership without time restrictions;
or
B. Usufruct right or leasehold right over a Real Property for a period not exceeding 99 years.


Input from anyone with legal knowledge is definitely required, but as I understand developers create leaseholds out of their freeholds, especially for apartments. The developer owns the land, builds the building and leases out the apartments for 99 years. Now if you have a freehold on the plot of land (where you've built your villa) then there are no time restrictions.

Anonymous said...

Hello,

Can you please provide the quote from H.H about the freehold law/decree? (Date/ reliable source)

Whenever I ask someone for it, their answers tend to be ‘’ everyone knows that’’

Thanks

D.K.C

the real nick said...

The clue is in the legalese (as quoted by the commenter above):

Subject to the Ruler's approval (i.e. he can change his mind at any time )..., non-national persons may be granted (may be, i.e. they possibly could but don't necessarily have the right to)

Most developers also included 'get out of jail free-cards' small print on marketing material, such as "reserving the right to make changes", "subject to contract" etc.

Anyone who bought in Dubai without (or even after!) doing due diligence on his rights is either a) a speculator, b) a stupid mug, or c) a long-term resident preferring a 99 year lease to an annual one.

Ace said...

Anyone who purchases property here is a fool. Rules can change in an instant. You have no rights and you can lose everything if you are not a citizen.

Dubai Property said...

I am strictly against the law stating that no foreigner can buy any property in Dubai because countries like US and Canada allow foreigners to buy properties in their countries then why not Gulf states. I think that it's a big hurdle for foreign investment in those states.

Seabee said...

DP, since 2002 foreigners have been able to buy property in Dubai (and other emirates and GCC countries). Without that there would have been no property development.

Dubai Property said...

Hi seabee, thanks for correcting my information about Dubai and I think that if more facilities and opportunities are provided to foreigners then it can help in adding more to the development of UAE.