Dubai Real Estate Laws and Regulations: A Comprehensive Overview

Introduction to Dubai real estate laws and regulations

To understand Dubai real estate laws and regulations, it is important to gain a clear understanding of what the DLD does. 

The DLD is a government agency, for which RERA is a division. Both authorities work in tandem to enforce real estate rules and regulations in Dubai. Their tasks include:

• Regulating foreign investment in Dubai (pertaining to real estate) 

• Collecting details of tenants and landlords 

• Resolving tenancy disputes 

• Monitoring and managing market development 

• Monitoring the legitimacy of real estate agencies and their advertisements 

• Licensing and authorizing real estate agents and developers to do their job 

• Monitoring banks, insurance, and law companies that work within the property market

The DLD and RERA consistently come up with different sets of real estate rules and regulations to ensure that Dubai’s real estate market remains stable and functions efficiently.

Key legal frameworks and authorities

While the DLD and RERA have the authority to implement new laws, there are certain Dubai real estate laws and regulations that have been long-standing cornerstones of the city’s real estate market. 

Some of them include: 

Dubai strata law

This law is applicable to multi-unit developments such as apartment buildings. The law provides rules and regulations for the maintenance of the common areas, amenities, and facilities for such properties. 

Rental property laws

As there are a large number of people who rent properties in Dubai, rental laws ensure that both the tenant and landlord have a fair experience in Dubai, as both their rights are protected. Some of the laws have clauses such as:

• Landlords can only increase the rent of a property if certain requirements are met and the correct processes are followed.  

• The tenancy agreement in Dubai for rental properties has to be at least a year long. 

• The landlord can only increase the property’s rent during the time of tenancy agreement renewal, not during the contract’s validity and at least 90 days written notice must be provided.

• In cases of rental disputes, both parties should contact the Rental Dispute Centre Dubai to help them resolve the matter. 

While these are some of the primary regulations pertaining to renting, there are more rules tenants and landlords should familiarize themselves with. 

Property inheritance laws 

When it comes to Dubai real estate laws and regulations, property inheritance laws can be a tricky chapter to navigate through. For example, if a property owner has dual citizenship, the inheritance laws of the other country are also taken into consideration. It is necessary for property owners to have a legal will that passes down the property legally to someone else. Otherwise, the Dubai courts will have to step in to determine the outcome of the property. 

Property ownership and land use regulations

Property ownership laws in Dubai are of extreme importance, as they determine who in the city is allowed to own property. 

Law No. 7 of 2006 is a pivotal real estate law pertaining to property ownership in Dubai. Article (4) of Law No. 7 of 2006 dictates that you can purchase property in Dubai if you meet either of the following criteria:

• A GCC citizens 

• A UAE citizen 

There is also a law revolving around foreign ownership of property in Dubai - which essentially allows foreigners to invest in and buy property in Dubai. 

Investment regulations and foreign ownership

Yes, foreigners are allowed to buy property in Dubai. However, there are highly specific terms and conditions that they must abide by. This is stipulated in Article 3 of Regulation No. 3 of 2006, which allows foreign nationals and non-residents to buy property in designated areas allotted by the Dubai government. 

Foreign investment is also allowed in Dubai’s property market, but can only be done in designated areas as well. 

While NRI property buyers often obtain an investor visa or a residence visa, a change of rules now means that it is not necessary to hold a residence visa in Dubai to buy property. The buyer, however, must have a valid passport that confirms their identity while buying property in Dubai. Foreigners can also avail of mortgages to buy property in Dubai, but the eligibility criteria for those mortgages will differ depending on the bank. 

The designated zones where foreigners can buy property are known as freehold zones, which are separately governed under freehold property law in Dubai. Foreigners can also buy properties in leasehold areas in Dubai, but freehold properties are a more popular option. 

Freehold ownership awards the buyer complete ownership of not only their property but also the property land - without time restrictions.

Contractual agreements and dispute resolution

Documentation is a significant part of Dubai real estate laws and regulations. Many investors and property buyers take the help of real estate agents to correctly fill and submit their agreements and other paperwork to the authorities. Failure to submit the correct document can result in delays in obtaining property, or even legal consequences. 

Here are some important documents within Dubai real estate laws and regulations:

• A No Objection Certificate (NOC) is to be obtained from the developer by the property seller in the final stages of selling a property. 

• The title deed of the property is proof of property ownership in Dubai. 

• Proof of payment in the form of receipts and submitted cheques to the relevant parties. 

• Valid passport, Emirates ID, and visa copies. 

• Valid documentation for a bank mortgage (if applicable). 

• Registration documents are done at the DLD. 

• Tenancy contract between the landlord and tenant (in case of rental properties). 

• DEWA bills (for utilities). 

Property disputes generally occur between a tenant and landlord. In the case of rental disputes, the DLD and RERA have a set of guidelines aimed to help settle such disputes. 

According to Dubai’s real estate rules and regulations, tenants and landlords should initially attempt to resolve the property dispute amicably. However, if they cannot reach a solution, they should approach RERA and file a case. In most scenarios, the dispute is resolved by RERA within a time period of 30 days. However, if there still isn’t a resolution, the parties are free to approach the Dubai courts. 

It is important to note that approaching higher authorities for property dispute resolution could require time, money, and effort from both parties. This is why it is usually recommended for both landlords and tenants to arrive at an amicable resolution amongst themselves. 

Recent updates and future trends

There have been newer additions to Dubai real estate laws and regulations, which showcase trends of regulation in the real estate market to not only stabilize it but also ensure that fair practices are being carried out by all stakeholders. 

Some of the new updates to these regulations include: 

• Law No. 19 of 2020, which allows the DLD to challenge previous decisions and cancel the sale or purchase agreement that was registered on the interim register based on specific circumstances. 

• Law No. 20 of 2020, which dissolved the DREI and transferred all its employees, services, and responsibilities to the DLD. 

• Law No. 33 of 2020, which extended the jurisdiction of the Judicial Committee to incomplete and canceled real estate projects. This committee also can handle RERA’s transfer of matters with consideration and resolution. 

Conclusion

Understanding Dubai real estate laws and regulations should be your first step as a potential investor or home buyer, as it will help you align your goals and plans with the regulations to ensure a smooth, hassle-free process. 

Many first-time home buyers and investors recruit RERA-accredited real estate agents. Whether you want to understand the department of land and real estate regulations or kickstart your property search, contact  Engel & Völkers Dubai today.