Dubai has several freehold areas, allowing expats to buy properties and take 100% ownership for a lifetime. That said, expats can also get a property on a leasehold ownership. But what are the leasehold property laws? How is it different from freehold ownership?
Leasehold properties usually give buyers the right to use the property for 99 years, but they can’t make any changes to the property without the freehold owner’s permission. It’s similar to a lease contract, but it’s for a longer period.
Here are all the laws on leasehold properties in Dubai, from property use to making changes or subletting the real estate.
LAWS AND REGULATIONS FOR LEASEHOLD PROPERTY IN DUBAI
Long-term leasehold requires a commitment to laws and regulations. While leasehold and freehold properties have several differences, the main distinguishing factor is the latter gives ownership rights for a lifetime. On the other hand, leasehold properties allow the use of property for up to 99 years.
Here are the laws on leasehold properties in Dubai that one must follow to avoid any violations.
Rights to the Property
Long-term leases involve granting the right to use and occupy a property for an extended period without transferring full ownership. It is usually 99 years. Moreover, the long-term lease contract gives rights to the person of the ownership.
However, leasehold ownership in Dubai will still require landlords’ permission to make changes to the property. The law on leasehold property in Dubai works similarly for jointly-owned properties. Furthermore, the laws on leasehold properties grant a right to unit only. It doesn’t give the right to the land.
Areas for Leasehold Ownership in Dubai
As per the rules for buying property as foreigners, non-UAE nationals can buy long-term lease rights in the following freehold areas:
- Umm Hurair 2
- Al Barsha South
- Emirates Hills
- Jebel Ali
- Al Jaddaf
- The World Islands
- Ras al Khor
- Al Rowyah
- Sheikh Zayed Road
- Sofouh
- Al Qouz
- Mirdif
- Dubai Marina
- Palm Jebel Ali
- Nad al-Sheba
- Palm Jumeirah
- Warsan 1
You can understand more about leasehold ownership in this guide to buying property as an expat in Dubai. Besides, UAE and GCC nationals can buy long-term leasehold property rights for a minimum of 25 years and a maximum of 99 years.
Functions of Dubai Land Department
The Dubai Land Department (DLD) performs the following functions regarding the registration of long-term lease contracts in the emirate.
- Determine areas for survey and certification of maps drawn
- Set rules regarding real estate surveys, inspections and map issuance
- Prepare templates for various contracts related to Real Property transactions
- Set laws for storing and recording data
- Prescribe rules on property valuation in Dubai
- Create laws for property auctions and supervise real estate sales
- Set a required DLD fee for registration services and prescribe payment methods
Complaints and Violations
DLD allows one to register a complaint via a real estate violation system (RVS) in case of discrepancies or disputes. This system regulates the real estate market.
Furthermore, the Rental Dispute Settlement Centre (RDC) is another committee. However, it doesn’t resolve disputes regarding long-term lease contracts of up to 99 years. The RDC determines applications for all normal lease contracts registered with Ejari and provides an immediate solution to avoid disputes.
Contract Registration Fees
The rules for leasehold properties in Dubai have regulated fees for registration of the long-term lease contract. Here is a breakdown of the fees:
- 4% of the total value to register long-term lease contracts.
- For amendment of the long-term lease registration, AED 1,000 is the fee.
- If the area allows freehold ownership, the conversion of the leasehold contract into freehold ownership costs a fee of 1% of the real estate value.
FAQs
What will happen after 99 years of leasehold in Dubai?
The rights of the property will be transferred to the freehold owner after 99 years of leasehold ownership.
Can I sell leasehold property in Dubai?
Only the people with freehold property ownership can sell the real estate in Dubai. The new owner can continue the contract as per the laws on leasehold properties in Dubai.
Can you convert leasehold to freehold in Dubai?
Yes. Speaking about legal aspects of leasehold property in Dubai, some areas allow this ownership conversion into freehold property ownership. However, it costs a fee of 1% of the total value of the property.
These were all the laws on leasehold properties in Dubai. You can buy a property in Dubai on leasehold ownership and follow the rules to avoid discrepancies. Besides, you can learn about another type of ownership, usufruct property ownership.
If you want to own an asset in the form of property, you can learn all about the rent-to-own properties in Dubai.
For more information on real estate ownership in the UAE, keep reading the dubizzle Property blog.
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