Dubai is set to introduce a new real estate law to help protect the rights of property investors, a move which has been welcomed by the emirate’s real estate and legal professionals.
The Dubai Land Department will soon introduce the Tanweer legislation and while the exact details of the new law have not been revealed, experts have welcomed the move as a positive step for the market and for safeguarding investors’ rights.
Dubai was hit hard by the property downturn, which hit the region in late 2008 and early 2009, with prices dropping by up to 60 percent and some projects being stalled or cancelled.
With liquidity tight, this led to stand-offs between investors and developers over missed handover dates and delayed construction schedules.
With dozens of new projects announced in recent months, the new law is designed to restore confidence in the sector going forward.
“Detail on the content of this law is currently minimal but any law that strives to provide more clarity around the developer / investor relationship can only have a positive effect on the Dubai Real Estate Market,” said Steven Morgan, head of the Cluttons UAE real estate agency.
“Dubai is a now a world-class city on many levels and the real estate product now offered is on a par with the best in the world, any move to bring the somewhat antiquated legal system in line with the sophistication of the product is welcome.”
Joe Durkin, a partner at Davidson & Co has led some of the most high-profile disputes in the region, including the $250m Heart of Europe project on Nakheel’s The World, and he believed the new legislation was a step in the right direction.
“The details of the Tanweer property law are yet to be released. It is unclear whether or not the law will have any retrospective effect or if it will affect contracts which are sub judice. A country which has a good judiciary and clear and transparent laws relating to real estate transactions and the workings of the regulatory environment will of course be more attractive to inward investment,” Durkin said.
“If the Tanweer law can reduce the number of disputes being referred to arbitration or pursued through the courts system by setting down a clear framework, this is welcomed,” he added.
The Tanweer law is not the only new piece of legislation set to help bring more clarity to the real estate sector.
In relation to disputes with tenants, a first for the UAE has seen the introduction of United Insurance’s tenant’s legal insurance policy, said Shaun Brook of Cavendish, a specialist firm of International insurance consultants.
“The purpose of the policy is that in the event of a dispute arising between a tenant and a landlord under the terms of a lease, the tenant will have access to a leading firm of UAE lawyers who will take up their case against the landlord with a view to amicably resolving the dispute through mediation or, if necessary, by use of the UAE courts. The policy also covers Death and/or Permanent Disability, which costs AED600,” he added.