By Angela Giuffrida
Ras Al Khaimah moves forward with freehold ownership shake-up, with Dubai in hot pursuit.
Ras Al Kaimah has stolen the march on other emirates by offering full freehold property ownership rights.The move is expected to provide a boost to residential construction in the emirate.
Expatriates living in Ras Al Khaimah are now entitled to full ownership of properties developed by Rak Properties, following the implementation of a freehold decree.
A similar move could soon be made in Dubai with the new ownership law expected to be rubber-stamped later this month.
“[This] is a turning point in the history of the real estate sector in Ras Al Khaimah in particular and the UAE in general,” said Mohammed Sultan Al Qadi, managing director of Rak Properties.
“This increases the responsibility laid upon Rak Properties and therefore makes us more committed to our plans and projects that will make the emirate a promising investment and tourism destination for potential investors and fulfil the expectation of our shareholders.”
The Ras Al Khaimah decree states that Rak Properties can sell its residential, commercial and tourism units as freehold and without a time-bound ownership deed. The introduction of the law is expected to lead to a surge in foreign investment.
Ras Al Khaimah is the latest emirate to announce foreign property ownership rights and follows the decision by the government of Abu Dhabi to grant long leasehold on property in designated areas.
In Dubai, legal and real estate officials are currently reviewing a draft copy of a new property law. Despite the Dubai government opening the real estate sector to foreign freehold ownership in 2002, some investors have been put off by the lack of data, transparency and a proper regulatory environment.
The new law is expected to address the relationship between master developers and secondary owners as well as give confidence to investors to buy freely without any doubts about their rights.
Bylaws will also be introduced to deal with issues relating to rental, common-use areas and brokerage commissions, and will regulate land transactions and leasehold.
“I think the government wants to ensure that every aspect of the sector is being addressed by the new law,” said Haiyan Mujarkech, chief officer for projects at Dubai Properties.
Jeremy Cama, a partner at law firm Berrymans Lace Mawer, said the law should improve market conditions. “The absence of law in the market is not good. Let’s hope that the new law is clear and helps the market.”