Within Abu Dhabi and outside the Abu Dhabi Global Market free zone
An interest in land can consist of:
- A freehold right
- Usufruct: A right in rem in favour of the usufructuary to use property of another and to exploit it, provided that it remains in its original condition. This right can be held by UAE nationals throughout the UAE, but may only be held by non-UAE nationals (and companies owned in whole or in part by non-UAE nationals) in one of the designated investment areas in the emirate of Abu Dhabi (and is restricted to a maximum term of 99 years).
- Musataha: A right in rem conferring upon the owner the right to build a building or to plant on the land of another. Again, this can only be held by UAE nationals throughout the UAE, but may only be held by non-UAE nationals (and companies owned in whole or in part by non-UAE nationals) in investment areas (restricted to a 50-year renewable term).
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.
Within the Abu Dhabi Global Market free zone
There are 10 categories of real estate interests that can be created in the Abu Dhabi Global Market free zone:
- Freehold interests in land (restricted to GCC-citizens) – this is an outright ownership in an estate in land for an indeterminate duration
- Freehold interests in real property (other than land)
- Future interests in real property that become effective at a future date, such as reversion and remainder interests
- Joint estates – these are interests in real property held by more than one person (including joint tenancy and tenancy in common)
- Leasehold (which could include one or more sublease interests and excludes occupational (or otherwise) licence arrangements) – this gives the tenant the right to use and occupy the property for a specified period of time
- Strata interests – as a means of dividing real property into lots or sub-lots for strata ownership
- Mortgages of real property
- Easements – an agreement giving an owner of real property a non-possessory right (such as right to light) over another parcel of real property
- Statutory charges imposing restrictions on use and dealings with real property
- Covenants – an agreement by the owner of real property in favour of another
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.
