An interest in land can consist of:
Usufructs and musatahas are investment interests allowing exploitation and development respectively as well as occupancy. Non-UAE nationals may only hold these interests within the designated investment areas, subject to the time limits which apply. A standard form musataha agreement has been introduced for use within Abu Dhabi for government-owned property.
A real estate owner can also grant non-exclusive rights, known as easements, to third parties to use the relevant land, such as granting a right of way. If correctly registered, easements are binding on any successors in title to the property.
In Abu Dhabi, a lease is a personal contract of hire, more akin to a licence and not an interest in land. Most non-owner occupiers in both the residential and commercial sectors are tenants under leases. Please see section on Commercial Leases for more information on leases in Abu Dhabi.
There are 10 categories of real estate interests that can be created in the Abu Dhabi Global Market free zone:
The real estate laws of Abu Dhabi in relation to usufructs and musatahas apply to such rights located throughout Abu Dhabi, including those located within the ADGM where such rights were created prior to 3 March 2015 (the date upon which the ADGM regulations came into force) and where no election has been made by the parties to the musataha or usufruct (as applicable) to convert the relevant agreement to a lease. Under the ADGM regulations, usufructuary and musataha rights are not recognised interests and so no further usufructuary or musataha interests will be created within the ADGM following the implementation of the regulations.
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Yes, foreign individuals or companies can only acquire property that is located in one of the investment areas of Abu Dhabi. In these areas foreigners can hold the following land interests:
In April 2019, a new law came into force allowing foreigners and GCC nationals to hold freehold interests (conferring ‘absolute’ ownership) within one of the investment areas.
The Abu Dhabi Executive Council is permitted to designate certain individuals, companies and parties as having the same status as UAE nationals regarding land ownership in the Emirate. This has been done to date for two real estate development companies listed in Abu Dhabi – Aldar Properties PJSC and Sorouh Properties PJSC, the two of which have since merged to form one company (being Aldar Properties PJSC). This designation enables these companies to own land interests throughout Abu Dhabi despite them having an element of foreign ownership.
In the Abu Dhabi Global Market free zone, only GCC citizens and companies wholly own by them may hold a freehold interest in land. There are no restrictions on foreigners purchasing other interests in freehold land, such as units and floors.
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Pre-emption rights are not imposed by statute in either Abu Dhabi or the Abu Dhabi Global Market free zone.
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The following legislation applies:
There is an extensive list of statutes and regulations that apply to property within the Abu Dhabi Global Market free zone. These include:
We have not listed the prescribed list of applicable English and Welsh Acts of Parliament here as it is extensive. However, it can be viewed on the Abu Dhabi Global Market website.
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No, there is no specific set of laws applying to any one type of property in either Abu Dhabi or the Abu Dhabi Global Market free zone.
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The transfer of real estate to a purchaser must be recorded at the Land Registration Department of Abu Dhabi (LRD). Purchasers’ interests under contracts for sale cannot be registered.
Personal attendance by all the parties involved (eg buyer, seller, mortgagee or real estate broker) is required at the LRD to complete the process of approval and registration of the sale contract. A party not able to attend in person may appoint a representative by using a power of attorney, either executed before a notary in Abu Dhabi or executed overseas and authenticated and legalised for use in the UAE.
The parties must sign the relevant standard forms at the LRD and manager’s cheques are commonly used to pay the purchase price and are required to pay the fees arising from a transfer of ownership. Written consent is likely to be required from any person with a security interest over the property being sold and from any occupiers of the property to confirm they are vacating.
Additional documents will be required by the LRD depending on the nature of the transaction. For transfer of real estate within a master community, a no-objection certificate will be required from the master developer and this will only be issued if all service or community charges have been paid up to date by the seller and if there are no outstanding issues such as breach of community rules and regulations. If the real estate being transferred is a plot of land to be developed then no-objection certificates are also likely to be required form the Department of Transport, Abu Dhabi Water and Electricity Authority and the relevant telecommunications authority.
Following attendance at the LRD, the application to transfer is processed. This may be completed on the same day or within a few days. Upon completion the LRD issues a new title certificate in the name of the purchaser. If the purchaser has granted a mortgage over the property, then the LRD will issue the original title deed to the mortgagee.
There are special provisions relating to off-plan sales.
In the Abu Dhabi Global Market free zone (ADGM), real estate interests that are recognised by the ADGM must be registered in the ADGM Land Register. Agreements to create conveyances must also be registered. It is the grantor’s responsibility to register the conveyance. The obligation is on the grantor of the conveyance to register it, Registration fees are 2% of the total value of the interest being conveyed (subject to no maximum level). Conveyances should be executed in the English language and, if not, a translation into English should be provided.
An interest which is required to be registered does not convey an interest in real property until the instrument is registered.
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Not all land is registered. Once registered, the details of ownership of the land are made available only to the interested parties (ie it is not available to the public) and therefore a potential purchaser must request a copy of the seller’s title deed rather than carry out a public search.
In the Abu Dhabi Global Market free zone (ADGM), all real estate transfers that are recognised by the ADGM must be registered in the ADGM Land Register, including agreements to create conveyances. The ADGM Land Register is publicly searchable and the ADGM shall issue certificates of title to interested parties and also priority searches (which can be used by lenders when taking security), These are very useful features that are not currently available through the Abu Dhabi land registration system.
There are no express references in the ADGM regulations to compensation being paid to purchasers who rely on incorrect information in the registered title maintained by the ADGM Land Register or fraudulently registered conveyances.
Yes and failure to register means ownership does not pass and the documentation is considered not to be enforceable save for the personal obligations between the parties.
An instrument which is required to be registered does not convey an interest in real property until the instrument is registered. However, nothing in the Abu Dhabi Global Market Real Property Regulations prevents an instrument that is:
from operating as a contract between the parties thereto, or from being otherwise enforceable according to its terms.
No.
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Pre-contractual documents may take the form of a memorandum of understanding, a letter of intent or heads of terms. Due to the emphasis local and public sector parties place on relationships, there is a tendency to consider such documents as the contract (since a good relationship between the parties will resolve all other issues that are not provided for in the document itself). This view is changing and parties are advised to treat such documents as pre-contractual only.
Following the investigation of title, the parties will enter into a contract for the sale and purchase of the property. There may be an interval between the date of the contract and the date when the transfer takes place.
In addition to the above, in relation to transactions with the Abu Dhabi Global Market free zone, agreements to create conveyances are also recognised and must be registered on the ADGM Land Register.
Once the sale and purchase agreement has been entered into, a binding contract has been made. For properties located within Abu Dhabi (excluding the ADGM), it is not possible for a purchaser to lodge a priority notice at the LRD to ensure that the property is not transferred to another party before the completion date agreed between the seller and purchaser. By requiring completion to take place by personal attendance at the LRD (or a trustee office), the risks associated with this are mitigated to a certain extent. In contrast to the rest of Abu Dhabi, it is possible to lodge a priority notice at the ADGM Land Register in relation to property within its jurisdiction.
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Yes. Buyers should rely on their own investigation of title and survey.
The buyer’s lawyer will review the title information and any searches (which are private and only available to interested parties) provided by the seller’s lawyer (including copies of the registered title, if applicable) and then raise enquiries with the seller’s lawyer. In relation to property located within the Abu Dhabi Global Market free zone, (ADGM), the ADGM land register is publicly searchable and certificates of title can be obtained by interested parties. The seller’s lawyer will then prepare responses to queries relating to the property for the buyer’s lawyer to review.
Searches of public utilities cannot be done by the public and therefore, again, the purchaser is reliant on obtaining due diligence materials by request to the seller. The law does not imply any warranties into the sale and purchase of real estate so it is important for a purchaser to carry out as detailed investigation as possible before entering into a binding agreement, A valuation will be conducted by a bank if the purchaser is seeking to grant a mortgage over the property, Generally, the buyer and seller will not enter into a sale and purchase agreement until the due diligence is completed and is satisfactory.
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Consent may be required from anyone who has lent money to the seller and has a security interest in the property being sold (unless the mortgage is to be paid off at completion) and from any other occupiers (together with confirmation that they will move out). Consents are also required from any party with a superior interest.
In the Abu Dhabi Global Market free zone, where the consent of a person is necessary for any dealing with real property, the consent must be written on the relevant instrument, or be lodged with the relevant instrument.
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Yes. The contract must be in writing and signed by each party. It must contain all the essential elements of the transaction (including the parties’ details, the property details, the purchase price and the timing for completion) and any details particular to the specific transaction. In a more complex commercial property, this may include details of leases the property is subject to, the details of any assignments of commercial contracts or warranties to be effected upon completion, etc The Abu Dhabi Land Registration Department and the Abu Dhabi Global Market Land Register do not require a particular form of contract to be completed by the seller and purchaser.
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No warranties are implied by law.
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If a misrepresentation occurs, a party can cancel the contract. This ground can be established if:
In the Abu Dhabi Global Market free zone, a buyer may seek damages whether the misrepresentation was made fraudulently or innocently, and where the buyer has suffered loss. Where the misrepresentation was innocent, the misrepresentation must form part of the contract, or the contract must have been performed, for the buyer to be eligible to seek damages or rescind the contract.
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Planning, construction and environmental laws may all apply. Buyers should obtain assurances that the statutory approvals relating to the initial construction were obtained.
Depending on the use of the property, further statutory regulations may apply, for example, fire safety and other health and safety regulations.
The potential retrospective nature of UAE law is a feature that investors should bear in mind when considering an investment in Abu Dhabi real estate.
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Environmental legislation is in its infancy in Abu Dhabi and in the UAE in general. Legislation covering this area is awaited.
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The permitted use should be noted on the title.
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The Department of Urban Planning and Municipalities' mandate is to ensure that public and private land and infrastructure development proposals are in line with the emirate’s long-term development vision, Plan Abu Dhabi 2030 and Plan Al Ain 2030.
The Department of Urban Planning and Municipalities has a streamlined process to review development proposals. It involves:
Developers can work with the Department of Urban Planning and Municipalities during this process to facilitate their project. The Department of Urban Planning and Municipalities will work with developers in satisfying the development regulations.
Under Law No. 3 of 2015 there is also the ability for developers to subdivide land (effectively creating a form of "strata title"). Developers wishing to subdivide land in Abu Dhabi must make various applications to the Department of Municipal Affairs for approval prior to commencing any development activity or subdividing the land.
It is possible to submit strata development proposals to the Relevant Authority in Abu Dhabi Global Market free zone.
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Yes, the Executive Council can pass a law dealing with any property that it requires to assume ownership of for the purpose of ‘public benefit’. The property should only then be expropriated in return for ‘just compensation’ and in accordance with the provisions of the applicable law passed by the Executive Council.
Yes, a public authority may acquire real property from a person. If the Abu Dhabi Global Market Regulations do not provide the person with compensation on just terms, then the Court can determine and order the public authority to pay appropriate compensation.
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These could include:
These are payable to the Land Registration Department of the Abu Dhabi Municipality.
In the case of investment properties, the transaction may be treated as the "transfer of a going concern" which is considered out of the scope of VAT. The conditions for obtaining this treatment are complex and advice should be assessed on a case-by-case basis.
In the Abu Dhabi Global Market free zone, fees are payable in respect of the following:
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At the date of publication, none.
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Do mandatory pre-emption rights apply to the sale of real estate assets in this country?
Pre-emption rights are not imposed by statute in either Abu Dhabi or the Abu Dhabi Global Market free zone.
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