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Abu Dhabi changes property rules
A new expat property ownership law in the capital says expats can own property… but only in investment zones. Kipp takes a closer look.
December 9, 2010 4:10 by Eva Fernandes
What’s new in the capital? Quite a mouthful, apparently: “usufruct” is the new keyword for anyone concerned with Abu Dhabi real estate. Kipp will explain all shortly.
On Wednesday, General Sheikh Mohammad Bin Zayed Al Nahyan, Abu Dhabi Crown Prince and Deputy Supreme Commander of the UAE Armed Forces, issued Resolution No. 64 of 2010 in an attempt to ease the process of property registration and real estate ownership.
According to everyone’s favourite national news agency, WAM, the resolution sets up guidelines to help facilitate acquiring loans to finance real estate investments, and eases the process of transferring ownership of property.
Many welcome the move as the introduction of the resolution is likely to increase investments in the real estate sector of Abu Dhabi. Wael Tawil, chief executive of Baniyas Investment and Development Company (BID), told Gulf News, “It gives the purchase contract legitimacy and will help the buyers [get] access to finance and mortgage finance which is crucial to end-users. I’d love to see more openness in property regulations. I hope Abu Dhabi Finance will expand financing expatriate buyers.”
The resolution also clarified the rather contentious question of nationality and ownership in the UAE. As previously known, real estate property ownership in general is limited to Emiratis alone. However, in the case of investment zones, Non-Emiratis or corporate bodies wholly owned by non-Emiratis will now be able to own, buy, sell, rent, and mortgage property. These owners will have to register with the ADEC registrar. Non-Emiratis can then hold “usufruct” for 50 years and usufruct contract for 99 years. Uh huh, there’s that word again. In case you’re a little lost, according to the online princeton dictionary, usufruct means “a legal right to use and derive profit from property belonging to someone else provided that the property itself is not injured in any way.”
What does that mean? Well it means they don’t really own it, but they may as well do since the contract lasts a lifetime. They can make their money, but the property never really ceases to belong to an Emirati. Still, it’s a step in the right direction, since all anyone wants to do nowadays is make money with their property, apparently.
Talking of Abu Dhabi property, leading real estate company Aldar has been in the news this week after shares in the property developer rose 7 percent as speculations of possible government support mounted. Last month, Aldar’s Dh10 billion debts shocked many, who saw the financial setbacks of the semi-government owned institute as an ominous sign. But with the rumored promise of government backing on the cards and the new expat-friendly resolution set in place, it looks like Abu Dhabi real estate could be on the up again soon enough.