Top Real Estate Story, 2005:Dubai Announces Property Law--NOT

The long-awaited property law in Dubai, allowing expatriates and foreign investors to obtain legal title to freehold property, was finally passed in the waning hours of 2005...

This is the news that didn't happen in 2005, despite numerous reports and rumors that such a law would be passed, which would finaly clear-up any uncertainty about property ownership in Dubai--a matter that worries investors and potential investors alike. The following is typical of reports that did surface through the year:

The latest feedback from senior lawyers is that they expect a Dubai property law to be issued later this year, in advance of a federal law. This follows the promulgation of a separate property law by Abu Dhabi last month. (AME Info: Thursday, September 08 - 2005)

The waiting game starts anew in 2006.

But how much does it really matter that such a law gets passed anyway? Conventional wisdom is that it will bring more clarity to the market which will be needed to entice more investors. But the reality is that there is significant if not sufficient investor interest and participation already. More, of course, can't hurt, but it really isn't needed.

The long awaited decree has, in fact, already been issued, as of May 2002. This is what kicked off the property rally in the first place.

It was in May 2002 that the Dubai Crown Prince General Sheikh Mohammed bin Rashid Al Maktoum issued a decree allowing foreigners to buy property freehold. (AME Info, A Short History of Dubai Property, p3--12 Aug 2004) ...After Sheikh Maktoum's decree, this sparked the real estate boom in Dubai's residential property. (UAE TEN's History of Freehold).

May 2006 will mark the 4th year since that momentous event. Since then the amount of development and investment that has taken place has been unprecedented with foreign and expatriate investment accounting for a large part of it. Investment in freehold property is the defacto reality.

From this perspective, investors already have the legal assurance they need in the form of the 2002 decree from the Crown Prince Ruler of Dubai. Greater authority rests in the federal powers held by Abu Dhabi, but it is apparent that they have not only refrained from counteracting the Crown Prince's edict, but are by some measures attempting to institute a system of foreign or expat ownership in Abu Dhabi, modelled after Dubai's.

What is not clear and in need of formal governmental proceedures is a system for registering titles. This is, of course, imperative from a legal standpoint but it is more a matter of proceedure than rights. As it stands, it is quite clear that foreigners and expats have a right to purchase and own property in Dubai. The only thing that could change that is not a policy or legal clarification, but an out-right reversal of policy. There is no reason for anyone to expect that to happen.

In the final analysis, the right to freehold ownership of property in Dubai is already in place, and has been since May 2002.

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Postscript (20-Jan-2006):

Interestingly, the following was found online:

The new UAE law on freehold property is expected later this year, a top Dubai Government official revealed last week.

This is from an AME INfo article dated 28-Feb-2004! 8 months passed through the end of 2004 with no such law passed, the same through 2005, so why should 2006 be any different?

Final Postscript (15-Mar-2006):

Reports are in that the new property law has been enacted.