UAE property law, is there really any reason to worry?

A statement from Dubai Chamber of Commerce Director-General Abdul Rahman G. Al Mutaiwee, a highly respected figure in the local business community, has done much to reassure buyers of freehold property in Dubai that what they are doing at least secures their rights.

At present there is no federal property law in the UAE, so freehold can not be held to be illegal, but neither is it explicitly legal.

As Mr. Al Mutaiwee said, 'We do need a law to formalized expatriate freehold ownership of properties. The Federal Government is currently working on the property ownership law'.

For current buyers, he added: 'A fair contract between a property seller and buyer would ensure the rights and privileges of the expatriates owning freehold properties in Dubai. If anyone has any doubts about his rights, he should carefully study the contract'.

The Emaar Properties sale agreement promises 'a clear and unencumbered freehold title to the Lot to the Purchaser, subject only to instruments, easements, rights of way, convenants or agreements with or in favour of a government authority.'

Now Mr. Al Mutaiwee's statement is effectively a declaration from the Dubai Government that it will safeguard the freehold rights of buyers until the federal law is passed. And it should be noted that a federal law can not be passed without the agreement of the Dubai Government.

So do buyers have any reason to worry about the present absence of a federal property law? Should they wait-and-see as some lawyers advise?

In truth if you intend to buy in Dubai then you should be aware that nothing is going to change the fact that buying in the Middle East carries different risks to some alternative locations.

However, Dubai has a long tradition of upholding property rights and has no history of arbitrary confiscation of property. Even one prominent UK based businessman who lost his UAE passport some years ago, still owns and rents out villas in Dubai.

For as a trading centre Dubai recognizes the inviolability of private property, and the only real reason for foreigners not to buy property is if they think that is going to change. That seems highly unlikely. An earthquake in San Francisco is more probable, and yet people continue to buy property there.