It didn’t take long to figure out why expatriates don’t want to leave. Who would have imagined life could be so interesting in the exotic city of Abu Dhabi, located in the United Arab Emirates, known as the UAE.

When the idea of living in the Middle East presented itself, my first thought was it was far too dangerous a place for an American woman. Don’t they hate Americans and repress women over there? Friends and family agreed; after rushing to grab their maps, they thought I lost my mind and the will to live. There was talk of setting up a hostage fund.

Never one to risk my safety for the sake of adventure, I researched and then visited the area to see for myself. What I found was a colossal distinction between what I’d thought of as the ‘Middle-East’ and what I see of the ‘Gulf Cooperation Council’, or GCC for short.
It didn’t take long to figure out why expatriates don’t want to leave. Who would have imagined life could be so interesting in the exotic city of Abu Dhabi, located in the United Arab Emirates, known as the UAE.

When the idea of living in the Middle East presented itself, my first thought was it was far too dangerous a place for an American woman. Don’t they hate Americans and repress women over there? Friends and family agreed; after rushing to grab their maps, they thought I lost my mind and the will to live. There was talk of setting up a hostage fund.

Never one to risk my safety for the sake of adventure, I researched and then visited the area to see for myself. What I found was a colossal distinction between what I’d thought of as the ‘Middle-East’ and what I see of the ‘Gulf Cooperation Council’, or GCC for short.

Arabia is the area made up of the Arabian Peninsula, located in the southwestern region of the Asian continent. Politically, the Arabian Peninsula consists of Saudi Arabia, Kuwait, Bahrain, Qatar, the UAE, Oman, and Yemen. Excluding Yemen, these countries constitute the Gulf Cooperation Council (GCC). Founded in 1981, the aim of the GCC is to promote coordination between member states and for the most part, their economies are flourishing. They even have plans for a common monetary currency within five years.

To those interested in the performance of the dollar, it should prove interesting when these oil-rich countries move their federal reserves away from dollars. Until then, the UAE’s monetary currency, the AED, is pegged to the US dollar, which means if your income, pension or savings is in USD, when you convert dollars to AED, you are neutral with regard to the dollar’s performance.

Despite the research that proved my complete ignorance about GCC countries, moving to the area did not sit well with worried loved ones in America whose steady diet of information from the area focused on terrorism and war, and certainly nothing positive. When I remarked how safe I would be with near-zero crime rates, they said, “Sure, that’s because they cut off their hands for stealing bread.” Come on.

If I can count myself as evidence, people in the UEA like and respect Americans. They may disagree with current US political decisions, but they’re hardly alone in the world in this regard. They realize regular Americans don’t control USA politics, so they don’t hold me personally responsible. From what I have seen, people in the UAE aren’t politically active. Instead, they are geared towards building seven star hotels and man-made islands shaped like palm trees and the globe. Business is booming. By offering tax-free zones, they attract major international corporations. Most of the biggies are here. Oh, and did I mention the UAE has no sales tax or income tax? That makes for an attractive working environment for citizens from countries not obliged to pay taxes on foreign income.

Living here is easy because the UAE is one of the most tolerant countries in the Muslim world. Foreign workers make up 90% of the population and somewhere down the line, it was decided to take a moderated ‘live and let live’ attitude. For instance, Muslims don’t eat pork but some grocery stores have a separate section where every imaginable pork item is available, including Milano salami, German bratwurst and USA bacon. Muslims don’t drink alcohol either, but non-Muslims can get a license to purchase alcohol.

Now that I’m here, I’m learning first-hand about a place on the planet I knew nothing about. At the same time, my American friends and family are learning about the region vicariously and no longer worry about me. As for my European friends, their first reaction was, ‘You lucky dog!’ Dubai is a hot spot for European vacationers who want sunshine; the UAE can give a money-back guarantee you’ll get sunshine any time you visit.

Here and now I must point out that this article is not about how I got here or how I can assist you in moving here, too. Simply said: a little privacy is not too much to expect, no two people’s situations are alike, and I can’t help anyone get anywhere. My only intention is to possibly spark inspiration or to provide reading material about what it’s like to live abroad.

That being said, this article addresses the first thing everyone asks about life in a different country: ‘How much does it cost to live?’ Unfortunately, housing is in short supply due to rapid growth, so rents are on the high side. You might pay $2,000 a month for an apartment, but you can certainly find cheaper accommodations. Housing here is truly a case of ‘You get what you pay for.’

Other than accommodations, everything else is cheap! The Abu Dhabi Emirate sits on 10% of the world’s oil; what they have found so far is expected to last a hundred years at current production, so everything related to oil is cheap. This is welcome news to a person ripped off by taxi drivers in at least 35 countries. In Abu Dhabi, a taxi across town costs about $1.00. Gasoline is $1.35 a gallon and someone pours it in the tank and then cheerfully washes your windows.

My first trip to the grocery store took hours to examine what was available. Regionally produced food is amazingly cheap. Imported food costs more but is available due to the large expatriate community, and in particular, Brits.

The UAE is a land where luxury services, impossible to contemplate on other continents, are easily affordable. Maids for $2.75 an hour. Professional dry cleaning a pair of slacks is $1.25 with free pickup and delivery. Jeans laundered and starched set you back a buck. Who wants to clean house or iron with these prices?

At the grocery store, someone takes my articles out of the cart and someone else bags them and carries the sacks to my car. Then the apartment lobby attendant carries them to my door. I was scarcely used to this royal treatment when the lobby attendant said he would wash my car every morning. With sand in the air (think Sahara with hi-rises), a daily car wash or dust-down is needed and I show my appreciation by way of a generous monthly tip.

At this point, you might have thought of something that also bothered me in the beginning and that is the subject of the exploitation of laborers. But, as with many things in life, seeing the situation firsthand gave me a different perspective. Many guest laborers support extended families in their home countries with what they earn in the UAE. People from neighboring countries consider themselves fortunate to snag a job, and it puts food on the table back home. Insofar as treatment is concerned, I know for a fact that people caught mistreating maids are punished and then banned from ever having another.

When people from outside the region first arrive, the first thing they notice, other than the heat and humidity, is the country appears to be sprouting cranes. Everywhere you look, particularly in Dubai, building is underway around the clock. They already have two opulent, seven star hotels. Recently, they’ve reclaimed land from the Gulf, patterned it into huge islands shaped like palm trees and topped them with luxury homes, shopping malls, convention centers and hotels. Another island underway is fantastically shaped like the globe with land forming continents. Accommodations and facilities on these islands sell out faster than they can build them. If that isn’t enough, the world’s tallest building is under construction and two shopping malls are competing to become the world’s largest. Just yesterday, I drove by an area in Dubai where 135 skyscrapers are being constructed. All I could do was gawk and point – the sight was beyond speech. The growth is simply phenomenal and returns on investment are staggering. And it’s all happening in a place many people don’t even know exists. But they will, soon. This is too big a secret to keep.

Globally more people have made more money out of property than any other asset class. Even big investors also have to live somewhere. But there are reasons behind these reasons that make property so desirable to investors both in Dubai and elsewhere.

It is a simple truth of the investment world that property has proven a better investment for more people than any other asset class. You can look at this anecdotally and think how many people do you know who have made a substantial sum through property and how many through shares or starting a business?
Globally more people have made more money out of property than any other asset class. Even big investors also have to live somewhere. But there are reasons behind these reasons that make property so desirable to investors both in Dubai and elsewhere.

It is a simple truth of the investment world that property has proven a better investment for more people than any other asset class. You can look at this anecdotally and think how many people do you know who have made a substantial sum through property and how many through shares or starting a business?

This has usually happened more through luck than judgment as most people buy a home that they actually intend to live in. However, this is also the bedrock of the property market and provides the stability of residual value. In short, everyone has to live somewhere so a house will always be worth something.

Other investments do not necessarily have residual value. Not only a hedge fund can evaporate in value overnight, so can shares in a bankrupt company. This is what equity risk is all about. Government bonds do have a residual value but ask some older investors about bonds issued by South American countries in the past; emerging market debt default is a big risk too.

War risk
Of course, a house can vanish in a war zone, as seen in Lebanon recently. But provided you buy in a geopolitically stable area then your investment is secure. Bricks and mortar are the ultimate in hard assets and need bombs to wipe them out.

Indeed, property is generally regarded as a ‘safe haven’ asset. Yet at the same time the ups and downs of the property market do provide opportunities for exceptional capital gain.

The best way to make a fortune in property is to buy at a low-point in the cycle when prices are cheap, and to do so with borrowed money. Using a loan to buy a property amplifies the upward leverage against the original equity, so the return is higher; unfortunately, the reverse applies and a fall in the value of a leveraged property will hit the equity element first.

Home improvements
There are also fortunes to be made in improving existing properties. This can be a cosmetic change like a lick of paint or an almost surgical rearrangement of internal accommodation. But the cost involved always needs to be finely measured against the potential gain.

People in Dubai often buy to avoid paying the high rents of the city. In many developed markets paying down a mortgage over 15 or 25 years is generally considered a good alternative to paying rent as the residual value is high, i.e. you end up owning a valuable property after the mortgage period instead of nothing.

Even if mortgages at first cost more than rentals, and this tends to change over time as inflation impacts on rents and house prices, then it is arguable that a mortgage is a savings discipline that the average person would otherwise just not follow. No wonder property remains the most popular investment class worldwide.

Which properties are eligible for registration of land?

Properties that are:

Completed
Fully paid
Handed over
Without any outstanding balances for charges such as services, interest and maintenance fees (All due balances should be paid till the end of the current year)

Can any owner from any project can come and register?

Which properties are eligible for registration of land?

Properties that are:

Completed
Fully paid
Handed over
Without any outstanding balances for charges such as services, interest and maintenance fees (All due balances should be paid till the end of the current year)

Can any owner from any project can come and register?

The Land Department has started to register titles in a number of projects, you should check with the Land Department and your Developer whether or not they are ready for registration of your property.

If I don’t register my property now, can I do it at a later stage or is there a deadline?

Yes, you can register your property at anytime during or after the scheduled dates given.

What happens if my property is scheduled for transfer during the registration period? Will it go under normal transfer? Or the customer should first register the land and then transfer?

Transfers will still take place and each transaction will be considered as 2 different transactions.

If I own a property in an incomplete project, when will I be able to register the property?

Shortly after the completion of the project and handover, customers will be notified about the registration dates for their property.

Do I need to turn up in person for the registration process?

Yes, or else you can authorize someone to come to register your property with a notarized Power Of Attorney.

A general power of attorney would do?

If the general POA specifies the purpose, it can be accepted or else you need a specified power of attorney where it mentions that it is for the purpose of registering the property at the Land Department.

There is no UAE embassy in the place where I live. How can I attest the power of attorney?

The POA should be attested by a government authority in your country and then it has to be attested by the UAE Embassy / Consulate in the same country and then the UAE Ministry of Foreign Affairs in Dubai. Alternatively, you can get the POA attested by your Embassy / Consulate in the UAE and the UAE Ministry of Foreign Affairs in Dubai.

Can mortgaged properties be registered?

Yes, it is possible. The Land Department will require the presence of the customer and the Bank representative.

My property is mortgaged. I don’t have the original contract?

You can provide the certified copy (from the financial institution)

If the property is mortgaged; do they pay the knowledge fee twice?

Yes, the knowledge fee applies to each transaction.

If joint owners don’t want to put percentages for each, how will it be done?

The Land Department will distribute it equally.

Does the Declaration of Name Ownership have to be filled by the Company?

No, it is only to be filled up by individuals. This is because the Company documents will be provided at the time of registration, where there will be 100% ownership for the Company.

What are the registration fees?

The Registration fees will be 1.5% of the Current Contract + AED 10 Knowledge fee + AED 100 Site plan fee + AED 10/- Knowledge fee.

Why should I pay registration fees while I have paid fees to the Developer when I transferred my property?

This fee is paid to the land department, which is applicable for the current owner to be registered.

Are there any mortgage fees?

Yes, the Mortgage fees will be 0.25% of the mortgage value + AED 10 Knowledge fee (which will be paid either by the customer or the Bank).

How many days will it take to issue and deliver the title deed?

It will take up to 7 working days.

After the registration of the property and issuing the title deed, if I wish to sell my property what will the procedure be?

The customer will have to proceed with the transfer through the Land Department. However, the same documents that were submitted for the registration have to be submitted for verification and then Emaar will issue the NOC.

Law No. (7) of 2006 concerning Real Property Registration in the Emirate of Dubai (the ‘Dubai Property Law’) was signed by His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Ruler of Dubai, on 13th March 2006 and came into force on 1st April 2006.

According to the Dubai Property Law, the Lands Department will be the only authority recognised as being able to register real property rights for property in Dubai. Real property rights capable of registration include rights of freehold ownership, rights of usufruct, long leases of up to 99 years, rights of Musataha and also collateral rights such as easements, restrictions and mortgages over real property.
Law No. (7) of 2006 concerning Real Property Registration in the Emirate of Dubai (the ‘Dubai Property Law’) was signed by His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Ruler of Dubai, on 13th March 2006 and came into force on 1st April 2006.

According to the Dubai Property Law, the Lands Department will be the only authority recognised as being able to register real property rights for property in Dubai. Real property rights capable of registration include rights of freehold ownership, rights of usufruct, long leases of up to 99 years, rights of Musataha and also collateral rights such as easements, restrictions and mortgages over real property.

A couple of the above concepts explained:

• The ‘right of usufruct’ is a concept that is found in our Federal Civil Code. It is the right to use and exploit property belonging to another person. It is a ‘right in rem’, in other words, it is a real property right. A lease is very similar. It also grants the right to use and take advantage of property belonging to another person, but according to our Federal Civil Code, a tenant does not acquire a property right through a lease, he just acquires a personal right, a right that is enforceable through a contract between himself and the landlord.

• The distinction between the ‘right of usufruct’ and a leasehold right is important in the context of foreigners’ property rights in Dubai and will be discussed in further detail hereunder. For UAE and GCC nationals, there is really very little practical distinction between the ‘right of usufruct’ and a lease. Both give a tenant the same rights, namely the right to use and exploit a property and both can be registered.

• The ‘right of musataha’ is similar to the ‘right of usufruct’. It is the right to use and exploit land belonging to another person along with the right to build on that land. It is the right that we commonly see granted to a tenant through a ‘Ground Development Lease’

Ownership by UAE and GCC Nationals

According to Article 4 of the Dubai Property Law, UAE and GCC nationals and companies wholly owned by such nationals have the right to own any property interest in the Emirate of Dubai, and to have such rights registered at the Lands Department. UAE and GCC nationals can therefore own property rights in all areas of Dubai, and so can their companies. This includes limited liability companies and private joint stock companies in which all the shareholders are UAE or GCC nationals.

If a company is incorporated in the UAE or in any of the other GCC countries and has foreign shareholders, it will not be considered a UAE or GCC national for the purpose of owning property. The only exception to this is Public Joint Stock Companies, companies such as Emaar and Union Properties, that are listed on the Dubai Financial Market. These companies allow their shares to be bought by foreigners but are still considered to be UAE nationals and can own property anywhere in Dubai.

Ownership by Nationals other than UAE or GCC Nationals

According to Article 4 of the Dubai Property Law, all nationalities other than UAE or GCC nationals are granted the right to own a freehold interest, a right of usufruct or a long lease of up to 99 years in ‘esignated areas’of Dubai as approved by the Ruler.

Regulation No. 3 of 2006 was signed by the Ruler and published in the government’s official gazette on July 3rd 2006. This Regulation provides at Article 3 that “non-locals may own properties as freehold not limited by time, or may have the usufruct right or hire right for a period not exceeding (99) years in the plot or plots shown opposite each of the under-mentioned areas according to the maps issued by the Department and attached with this Regulation”. The Maps were not published with the Regulation. Article 3 lists 23 designated areas and specifies the applicable plots by their plot numbers.

Foreign companies, as well as individuals, can own a freehold title, long lease or a usufruct right of up to 99 years in the designated areas. It is understood that the Lands Department will impose no restrictions on this and it will therefore make no difference whether the company is registered in the Cayman Islands, England, Hong Kong or any other foreign jurisdiction, provided that evidence of lawful existence in the country of incorporation is given.

Status of Long Leases granted to foreigners outside Designated Areas

Long leases, sold in areas which are not designated areas, fall outside the ambit of the Dubai Property Law, but nonetheless are not illegal in any way. They do not contravene this Law or any Federal Law. However, such unregistered leases are treated in a different way for some purposes:

o Unregistered leases remain personal rights, not rights in rem or property rights;
o Unregistered leases are still capable of being inherited;
o Disputes arising between a landlord and a tenant of an unregistered long lease will still be adjudicated by the Rents Committee.

Void Arrangements

Article 26 (1) of the Dubai Property Law provides that, “Any agreement or disposal made in violation to the provisions of this Law or with the intent to circumvent its provisions shall be null and void”. Article 26 (2) gives any interested third party, the Lands Department and the Public Prosecution the right to request the court to declare such a transaction void. This is directed at so called ‘sham arrangements’. This provision is not saying, for example, that long leases granted to foreigners in areas that are not designated areas are illegal. What this provision is aimed at, are those agreements that purport to give a property ownership right to someone who is not entitled to own it and is not entitled to register it. What would be void, for example, is a Sale & Purchase Agreement for the sale of a freehold right in favour of a foreigner in respect of a property in Deira, as foreigners do not have the right to own freehold property in Deira. That is an obvious example.

A more subtle example might be the ‘nominee ownership’ type arrangements that we sometimes see, where a foreigner who wishes to own property will reach an arrangement with a UAE national, wherein the UAE national will hold title to the property at the Lands Department, but for all intents and purpose the foreigner considers himself to be the property owner. The best advice to any foreigner wishing to ‘own’ property in a location which is not approved for foreign ownership, is to take a long lease of the property. Whilst the lease cannot be registered, the foreigner would at least have contractual rights pursuant to the lease, which can be enforced and a lease arrangement is not illegal or invalid.

How does a person prove his ownership?

Regarding proof of ownership of property, in terms of Articles 5, 22 and 24 of the Dubai Property Law, if a purchaser considers that he is the owner of a property, the contract or other agreement by which he acquires that ownership is insufficient to prove it. The purchaser needs to take the contract to the Lands Department and apply for ownership to be registered in his name. If the application is in order, the Lands Department will register his ownership in the Property Register and issue him with a ‘Title Certificate’. This is the document which proves his ownership.

If Title Certificates are conclusive evidence of property ownership, what if they have been issued incorrectly or contain incorrect information? Article 7 of the Dubai Property Law allows objections to the data recorded in the Property Register ‘on the grounds of fraud or forgery’. Further, Article 13 authorises the Lands Department to correct errors in the Property Register on its own initiative or at the request of an interested party.

In conclusion, it is the Property Register itself that at any point in time is the conclusive source of information regarding property rights, and the Title Certificates contain a mirror record of that information as of the date that they are issued. If some time has passed since a Title Certificate was issued, and a party wishes to rely on the information that it contains, he should go to the Lands Department and check it against the Property Register. The information may have changed since the Title Certificate was issued, perhaps because the Lands Department has rectified the Register pursuant to Article 7 or Article 13. Or maybe subsequent entries have been made in the Property Register without the co-operation of the title holder, and therefore without amendment to his Title Certificate, for example, some form of third party interest or a court judgment.

Registration of Third Party Interests

Article 24(2) of the Dubai Property Law provides for third party interests, any conditions, undertakings, encumbrances or any other liabilities related to Real Property Rights to be registered in the designated folio (page) of the Real Property Unit.

Many of the new private communities that we see in Dubai are managed and maintained through a Master Community Declaration and multi-owned buildings are managed through a Constitution of the Co-owners Association. These two documents contain a number of covenants and easements, such as the promise to pay service charges and so on. The Lands Department has confirmed to us that the third party interests contained in these documents will be registered on the individual property titles.

Dealing with Property Disputes

In the case of a property dispute, Article 10 of the Dubai Property Law provides that the liability for breaching an undertaking to transfer any Real Property Right shall be limited to payment of indemnity, whether or not such undertaking provides for an indemnity. Therefore if a seller defaults on his obligations under a Sale & Purchase Agreement and fails to transfer the property to the purchaser, the purchaser can claim damages from the seller for his losses suffered, but cannot force the seller to transfer the property to him. In other words, specific performance is not available as a remedy.

The question arises as to which forum should be utilised for settling disputes arising under this Law? Article 27 of the Law specifically repeals a Decree dated 6th November 1977. That 1977 Decree prevented any property related disputes from being filed at court unless the case was referred to it by the Lands Department. Now that Decree has been repealed and any aggrieved party can now file a claim direct with the Dubai Courts or implement any agreed arbitration process.