UAE to have Unified Freehold Property Law

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Draft legislation is under way that aims to protect the UAE by restricting expatriates from automatically acquiring residency visas through freehold property ownership, according to a Federal National Council (FNC) member.

The council will shortly submit a draft law on freehold property to the government which will unify the divergent laws relating to the sector in the seven emirates.

Dr Abdul Rahim Shaheen, council member, speaking to Khaleej Times, said the council was moving to enact the proposed legislation as soon as possible.

"The Council's interim committee is studying the impacts of the Ministry of Labour's decisions and rules on expatriate workforce in view that the seven emirates handle the freehold property under different rules, which led to chaos in the sector."

"Therefore, it called for the government to issue a federal law unifying rules on dealing with foreigners regarding the freehold of properties, and pinpoints strict punishments against whoever exploits the ownership in jeopardising public interest," he said.

He said the issue endangered national interest and the identity of the UAE as Emiratis were increasingly outnumbered by expatriates, and that some residents had begun demanding rights.

"The statute was badly needed and expeditiously, for some voices belonging to countries of expatriates living and working in the country had begun to talk of granting rights, which are not stipulated in the constitution."

Expatriates are not entitled to a 25-year residency through property ownership, a senior official at the Ministry of Interior has clarified.

Colonel Rashid Sultan Al Khider, Director of Legal Department in the Ministry of Interior (MoI) told Khaleej Times, that the Naturalisation and Residency Law does not have any article that allows expatriate property owners to obtain a 25-year residency visa.

The clarification by the Ministry of Interior which calls for a new law by the FNC, comes after the practice of several property developers of advertising residency visas with their property sales.

"It is not right," he said, "As it came from some property companies and is a violation of the Naturalisation and Residency Law which states that the expatriates in the UAE are here either for work, study, medical treatment, tourism, or are sponsored as family members."

He pointed out that the FNC's move on freehold property draft law was timely before wrong practices by some property marketing companies hit the society.

"A unified property law for the UAE is better as it will accelerate the legal initiatives. But it remains to be seen what is the exact nature of the new legislation," said the Chief Executive Officer of the Bloom Properties Hani Shammah."We need a law which will make the property transactions more transparent and will put in place better processes and further liberalise the real estate sector. The law must ensure that end-user driven real estate market would get priority and the excessive speculation is eliminated," he added.

Mohammed Al Haj, CEO of Deerfields Properties said that if the law allowed residency visas to some extent, it would boost the market.

"The FNC would not take any step without proper studies. I'm sure they would have taken this initiative also after due consideration about the risks emanating from it. They will not want to create a situation where people from different countries come here and vanish with all profits when a crisis arises. The law must systematically organise and control the property sector."

© Khaleej Times 2008


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The thinking and the fears of the FNC will be the ultimate nail in the coffin of UAE property. Their fear of being over-run in their own country is just as important in all this as the credit crisis, however the credit crisis will end eventually and when it does the fear will remain to undermine all that has occurred in the past 5 years. So long as the 30 day exit rule remains the resident expat population will continue to rent at the cheapest price possible and very few will buy.

I fear next year will be the end of a sad story...
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