New DIFC Real Estate Laws and Regulations
Dubai International Financial Centre (“DIFC”) announced, on 14 November 2018, a new set of real estate laws and regulations:
- the Real Property Law (DIFC Law No. 10 of 2018) which repeals and replaces the Real Property 2007 Law (DIFC Law No. 4 of 2007);
- the Real Property Regulations;
- the Strata Title Law Amendment Law (DIFC Law No. 11 of 2018) amending certain provisions of the Strata Title Law (DIFC Law no. 5 of 2007); and
- the Strata Title Regulations.
Key changes introduced by the new laws and regulations
In relation to leasing and transfer of interests
- leases for DIFC properties with terms of more than 6 months must now be registered with the DIFC Registrar of Real Property (previously only leases for more than one year required registration);
- the Real Property Regulations now provide 8 exemptions from the freehold transfer fee which is usuallycharged at 5% of the purchase price or market value;
- where properties are mortgaged, the freehold transfer fee must now be paid with 50 days of signing the sale and purchase agreement;
- there is a new schedule of registration fees applicable to the transfer of non-freehold interests;
- references to a new Leasing Law for DIFC that we expect will be issued in the near future.
In relation to strata
- there is a clear obligation to lodge a Strata Management Statement and additional detail provided around Principal Strata Schemes;
- the new legislation introduced a statutory 10 and 1 year obligations on developers to cause their contractors to rectify defects;
- there is a clear process for registering a lien in case of unpaid Service Charges;
- there is a preclusion from the right to vote at a General Assembly if Service Charges are unpaid.
Why this is significant
The new laws and regulations represent the first significant overhaul of the DIFC’s real estate framework since 2007. However, it is certainly not the final chapter as we expect additional legislation and regulations to be introduced in the short term, notably the long awaited DIFC Leasing Law.
How we can help
Al Tamimi’s Real Estate team has considerable experience and knowledge of real estate projects in DIFC. Whether your transaction involves the development of a jointly owned real estate project, acquisition and disposal of direct and indirect real estate investments or commercial letting in DIFC, we can provide the expertise you need to meet your objectives.