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.
For more information : http://propdubai.com/articles/17/index.php
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