{"id":11362,"date":"2015-11-04T16:49:33","date_gmt":"2015-11-04T12:49:33","guid":{"rendered":"https:\/\/www.propertyfinder.ae\/blog\/?p=11362"},"modified":"2022-08-28T15:00:18","modified_gmt":"2022-08-28T11:00:18","slug":"new-abu-dhabi-property-law-in-a-nutshell","status":"publish","type":"post","link":"https:\/\/www.propertyfinder.ae\/blog\/new-abu-dhabi-property-law-in-a-nutshell\/","title":{"rendered":"New Abu Dhabi property law in a nutshell"},"content":{"rendered":"<p><span style=\"color: #000000;\"><a style=\"color: #000000;\" href=\"http:\/\/www.propertyfinder.ae\/blog\/wp-content\/uploads\/2015\/11\/abu-dhabi-skyline-1024x437.jpg\" target=\"_blank\"><img decoding=\"async\" class=\" wp-image-11363 alignnone\" src=\"\/blog\/wp-content\/uploads\/2015\/11\/abu-dhabi-skyline-1024x437-650x277.jpg\" alt=\"abu dhabi skyline\" width=\"784\" height=\"334\" srcset=\"https:\/\/www.propertyfinder.ae\/blog\/wp-content\/uploads\/2015\/11\/abu-dhabi-skyline-1024x437-650x277.jpg 650w, https:\/\/www.propertyfinder.ae\/blog\/wp-content\/uploads\/2015\/11\/abu-dhabi-skyline-1024x437-322x137.jpg 322w, https:\/\/www.propertyfinder.ae\/blog\/wp-content\/uploads\/2015\/11\/abu-dhabi-skyline-1024x437-800x341.jpg 800w, https:\/\/www.propertyfinder.ae\/blog\/wp-content\/uploads\/2015\/11\/abu-dhabi-skyline-1024x437.jpg 1024w, https:\/\/www.propertyfinder.ae\/blog\/wp-content\/uploads\/2015\/11\/abu-dhabi-skyline-1024x437-400x171.jpg 400w\" sizes=\"(max-width: 784px) 100vw, 784px\" \/><\/a><br>\nAfter more than seven years of consultation, reviewing and drafting, Abu Dhabi has finally published the new property law in hopes to better regulate the emirate&rsquo;s real estate market. &nbsp;<\/span><\/p><p><span style=\"color: #000000;\">Following are the main provisions of the new law which all parties should be aware of:<\/span><\/p><h2><span style=\"color: #000000;\"><strong>Definitions<\/strong><\/span><\/h2><p><span style=\"color: #000000;\">Part one of the law defines several important terms including: the real estate register, the interim real estate register, the real estate development register, real estate development projects, escrow accounts, <a class=\"wpil_keyword_link\" href=\"https:\/\/www.propertyfinder.ae\/en\/new-projects\" target=\"_blank\" title=\"off-plan\" data-wpil-keyword-link=\"linked\" data-wpil-monitor-id=\"3\">off-plan<\/a> sales, service charges and community charges.<\/span><\/p><h2><span style=\"color: #000000;\"><strong>Responsible Authority<\/strong><\/span><\/h2><p><span style=\"color: #000000;\">The law authorises Abu Dhabi&rsquo;s Department of Municipal Affairs (&ldquo;the DMA&rdquo;) to:<\/span><\/p><ul>\n<li><span style=\"color: #000000;\">Organise and develop the real estate sector in Abu Dhabi<\/span><\/li>\n<li><span style=\"color: #000000;\">Supervise and control all aspects related to the sector and coordinate with municipalities in this regard. <\/span><\/li>\n<li><span style=\"color: #000000;\">Implementing the law, issuing licences, controlling escrow accounts and cancelling real estate projects.&nbsp;<\/span><\/li>\n<\/ul><h2><span style=\"color: #000000;\"><strong>Licensing and Registration<\/strong><\/span><\/h2><p><span style=\"color: #000000;\">The types of entities or persons that are allowed to obtain a licence to engage in development-related activities are:<\/span><\/p><ul>\n<li><span style=\"color: #000000;\">Master developers and sub-developers.<\/span><\/li>\n<li><span style=\"color: #000000;\">Brokers and their employees.<\/span><\/li>\n<li><span style=\"color: #000000;\">Owners&rsquo; association managers, appraisers and surveyors.&nbsp;<\/span><\/li>\n<\/ul><p><span style=\"color: #000000;\">The law creates two new registers: the real estate development register and the interim real estate register. Both registries will both be kept by DMA and developers will not be allowed to engage in real estate development unless they have been registered in the real estate development register. In addition, any disposal of off-plan units that hasn&rsquo;t been registered in the interim register will not be legally binding.<\/span><\/p><p><img decoding=\"async\" class=\" wp-image-11365 alignnone\" src=\"\/blog\/wp-content\/uploads\/2015\/11\/abu-dhabi-property-prices-remain-relatively-stable1-541x350.jpg\" alt=\"Abu-Dhabi-property-prices-remain-relatively-stable\" width=\"782\" height=\"506\"><\/p><h2><span style=\"color: #000000;\"><strong>Off-plan Sales<\/strong><\/span><\/h2><p><span style=\"color: #000000;\">Regulation of off-plan sales is one of the cornerstones of the law. This is where the buyer is granted real estate rights over a property&nbsp;that was&nbsp;built in accordance with floor or complex plans:<\/span><\/p><ul>\n<li><span style=\"color: #000000;\">A developer is not allowed to sell units off-plan unless it proves that it owns a real estate right over the <strong>project land<\/strong> and that it has opened an escrow account for the project.<\/span><\/li>\n<li><span style=\"color: #000000;\">The law includes requirements for opening an escrow account and paying money from the escrow account.<\/span><\/li>\n<li><span style=\"color: #000000;\">The law prohibits developers from collecting <strong>registration<\/strong> fees from investors, and only allows developers to charge <strong>administrative<\/strong> fees, which must first be approved by the DMA.<\/span><\/li>\n<li><span style=\"color: #000000;\">Where there has been a gross breach of the contract by the developer, the investor may be able to terminate the off-plan sale contract.<\/span><\/li>\n<li><span style=\"color: #000000;\">The DMA may take into account circumstances where the delay has not been caused by a breach of the developer&rsquo;s obligations, for instance, if a competent authority has confiscated the land on which the project is to be constructed.<\/span><\/li>\n<\/ul><p><span style=\"color: #000000;\"><strong>Result<\/strong>: This should result in lower costs for buyers. The law also protects investors by requiring developers to register units sold off-plan in the interim real estate register.<\/span><\/p><h2><span style=\"color: #000000;\"><strong>Real Estate Financing<\/strong><\/span><\/h2><p><span style=\"color: #000000;\">The law allows units sold off-plan to be mortgaged only if:<\/span><\/p><ul>\n<li><span style=\"color: #000000;\">The loan amount is paid into the relevant escrow account.<\/span><\/li>\n<li><span style=\"color: #000000;\">The loan is allocated for payment of the purchase price. <\/span><\/li>\n<li><span style=\"color: #000000;\">The developer is prohibited from mortgaging the project land or any related real estate right unless it is for the purpose of financing construction of the project.<\/span><\/li>\n<li><span style=\"color: #000000;\">The purchasers of the units must be notified of the mortgage by the developer.<\/span><\/li>\n<\/ul><p><span style=\"color: #000000;\"><strong>Results<\/strong>: These new provisions on mortgages will help resolve&nbsp;the issues that banks face &nbsp;in connection with real estate financing.<\/span><\/p><h2><span style=\"color: #000000;\"><strong>Owners&rsquo; Associations<\/strong><\/span><\/h2><p><span style=\"color: #000000;\">The new law includes provisions for setting up owners&rsquo; associations, comprising all the owners of units in multi-unit real estate developments. Owners&rsquo; associations will be responsible for the management of those common parts.<\/span><\/p><h2><span style=\"color: #000000;\"><strong>Punishments<\/strong><\/span><\/h2><ul>\n<li><span style=\"line-height: 1.5; color: #000000;\">Any person who conducts the activities of real estate brokers, owners&rsquo; association managers, appraisers and surveyors without having an appropriate licence from the DMA may be punished by imprisonment or a fine of not less than 50,000AED and not exceeding 200,000AED.<\/span><\/li>\n<li><span style=\"color: #000000;\">Any person who conducts real estate development activities in the Emirate of Abu Dhabi, fraudulently markets off-plan units for sale, or does not deposit the required funds into the escrow account may be punished by a fine between 100,000AED and 2,000,000AED.<\/span><\/li>\n<li><span style=\"color: #000000;\">The DMA may cancel licences, if a licensee violates provisions of the law and the executive regulations or if the licensee is not performing its obligations properly in the opinion of the DMA.&nbsp;<\/span><\/li>\n<li><span style=\"color: #000000;\">A developer may be removed from the development register if, among other things, it fails to commence construction within six months of the date on which it has received approval to sell off-plan units. <\/span><\/li>\n<li><span style=\"color: #000000;\">The DMA can cancel a real estate project if the developer fails to start building the project within six months from the agreed commencement date or if it fails to complete the project within the agreed timeframe.<\/span><\/li>\n<\/ul><p><strong><a href=\"https:\/\/www.propertyfinder.ae\/en\/buy\/abu-dhabi\/properties-for-sale.html?ob=pa&amp;utm_medium=organic&amp;utm_source=blog&amp;utm_campaign=community&amp;utm_content=Abu%20Dhabi%20new%20property%20law%20-%20abu%20dhabi%20sale%20listings\" target=\"_blank\">Check out investment opportunities in Abu Dhabi with thousands of listings on propertyfinder.ae<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>After more than seven years of consultation, reviewing and drafting, Abu Dhabi has finally published the new property law in hopes to better regulate the emirate&rsquo;s real estate market. &nbsp;Following are the main provisions of the new law which all parties should be aware of:DefinitionsPart one of the law defines several important terms including: the&#8230;<\/p>\n","protected":false},"author":30179,"featured_media":11365,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_eb_attr":"","footnotes":""},"categories":[513],"tags":[],"class_list":["post-11362","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-laws-en"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.0 (Yoast SEO v22.5) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ 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