Dubai Introduces New Property Laws for DIFC

Bob Reynolds

22 June 2007

The Dubai Financial Services Authority (DFSA) has announced two new property laws which will be introduced with immediate effect. The Real Property Law (DIFC Law No 4 of 2007) guarantees ownership of freehold land and buildings, and other interest in land, within the Dubai International Financial Centre. The Strata Title Law (DIFC Law No 5 of 2007) establishes a system of guaranteed freehold title to units in buildings in the DIFC. The ruler of Dubai, Sheikh Mohammed Bin Rashid Al Maktoum, has passed these laws and a set of accompanying regulations. The Real Property Law is based on the underlying principles of English common law, but also incorporates the Torrens system of land registration, well known in countries such as Australia, New Zealand, Canada and Singapore. Under the Real Property Law, land transactions are registered in a central register administered in the DIFC. Once registered, the law certifies them to be fully effective. Unlike some other systems of land registration, title interests registered under the Real Property Law are indefeasible. In practical terms, this means that people buying real estate in the DIFC, lending on the security of real estate in the DIFC, or taking a lease of real estate in the DIFC, can be assured that their investment is backed by the full protection of the law. The Strata Title Law is based on a system originally developed in Australia, but now in use in many countries around the world, including Singapore. It combines the benefits of guaranteed title under the Real Property Law with an administrative structure designed to handle the day-to-day management of buildings. It will help overcome the complexities of co-owners association constitutions, master community declarations, and the like, by introducing a simple but comprehensive system of rights and responsibilities.