UAE Law and Practice Contributed by: Duncan Pickering, Nicola de Sylva and Sean Cope, DLA Piper Middle East LLP
Leasehold Interests Generally, leasehold interests in the UAE are treated as personal rights between two parties and not as real rights. An exception to this is leases of 25 years or more in Abu Dhabi and leases of ten years or more in Dubai, which are each considered as (and can be registered as) real rights. Granted Land Land may also be “granted” by the rulers of each Emirate to Emirati citizens or companies owned by Emiratis. The grant of such land can be revoked by the ruler at any time, and is sub- ject to obligations to develop and to restrictions on its use and disposal. 2.2 Laws Applicable to Transfer of Title The following federal laws are relevant: • the Civil Code; and • Federal Law No (18) of 1993 on commercial transactions, as amended (the “UAE Com - mercial Code”). Each Emirate has its own laws and regulations governing the transfer of title. In Abu Dhabi, the relevant laws relating to the transfer of title include: • Law No (3) of 2005 (as amended) concerning the regulation of property registration in the Emirate of Abu Dhabi; • Abu Dhabi Administrative Decision 51/1/2008 on the issuance of the Implementing Regula - tion of Abu Dhabi Law No 3 of 2005 concern - ing the regulation of real estate registration in the Emirate of Abu Dhabi; • Law No (19) of 2005 re-organising real prop - erty in Abu Dhabi (as amended by Law No (10) of 2013);
• UAE-listed public joint stock companies in which non-UAE national shareholding does not exceed 49%; and • any person or company specifically author - ised to hold real estate by decision of the Crown Prince or Executive Council. All other nationalities are only permitted to own real estate in areas for foreign ownership – ie, the designated “investment areas”. In Dubai, nationals of the GCC, UAE-incorpo - rated companies wholly owned by them and UAE-listed and public joint stock companies may have absolute ownership of real estate. All other nationalities are only permitted to own real estate in areas designated for foreign ownership. Usufruct and Musataha Interests A usufruct interest is a right in rem in favour of the grantee to use and exploit the property of another, provided the property remains in its original condition. A musataha interest is a type of usufruct that confers upon the grantee the right to build upon the land of another. In Abu Dhabi, both usufruct and musataha rights can be held by UAE nationals and UAE-incorpo - rated companies wholly owned by them (without restriction) and by non-UAE nationals in desig - nated investment areas only. In Dubai, both usufructs and musatahas can be held by GCC nationals and UAE-incorporated companies wholly owned by them, but by non- GCC nationals in designated areas only. In all cases, usufructs are restricted to a maxi - mum term of 99 years and musatahas to a maxi - mum term of 50 years (renewable once in Abu Dhabi).
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