Dubai implemented a new law to govern the grant of ‘Musataha’ rights on commercial lands in the emirate, with the goal of promoting Dubai’s status as a preferred global real estate investment destination. The law issued by Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, intends to regulate the use of commercial lands in Dubai by granting Musataha the right to develop real estate projects, according to a statement released by the Dubai Media Office on Wednesday.
A Musataha is a type of investment partnership between the public and private sectors that grants an investor the right to develop a specific plot of land for a set period of time. The Musataha agreement, according to the law, creates a real property right that entitles its holder to construct a building or invest in, mortgage, lease, sell, or purchase a plot of land belonging to a third party for up to 35 years. The agreement has a maximum term of 50 years.
According to the statement, the request for renewal must be submitted two years before the agreement’s expiration date. The agreement’s holder is also required to follow a number of rules and regulations. For example, they must register the agreement with the Dubai Land Department (DLD) registry or the Dubai International Financial Centre registry, and they cannot change the use of commercial land without the owner’s prior approval.
The UAE property market grew rapidly in 2021, and this trend is expected to continue this year as the country’s economy recovers. Economic support measures and government initiatives, such as residency permits for retired and remote workers, as well as the expansion of the 10-year golden visa programme, also aided in improving market sentiment. According to a report released last week, Dubai ranked first in the world for improving real estate transparency between 2020 and 2022, followed by Abu Dhabi, France, the Netherlands, the United States, Germany, and India.
The new law charges the DLD with establishing rules and standards to ensure the best possible use of commercial lands approved for Musataha rights. Aside from identifying commercial land plots in collaboration with relevant government entities, it will also ensure the amicable resolution of any conflicts that may arise as a result of complaints. The decree, which took effect on the date it was published in the official gazette, mandated the establishment of a separate registry at DLD for Musataha agreements. It also specified the penalties for failing to issue a certificate of completion for projects built on commercial land under the terms of the agreement.
On Tuesday, Dubai passed legislation to encourage the growth of real estate investment funds in the emirate. The law granted certain privileges to real estate investment funds as part of efforts to strengthen the emirate’s position as a global destination for real estate investment and to provide incentives to attract more funds into the emirate.
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