New Real Estate Laws and Regulations released by Dubai International Financial Centre (DIFC)
December 08, 2018
The Dubai International Financial Centre (DIFC) has released a new set of real estate laws and regulations. The amendments to the Real Property Law regimes came into effect on 14th November 2018.
This Real Property Law 2018, repeals and replaces the Real Property 2007 Law (DIFC Law No. 4 of 2007) as it was in force immediately prior to the commencement of this Law (the “Previous Law”), and may be cited as the “Real Property Law 2018” or “this Law”.
This Law applies to all Real Property within the jurisdiction of the DIFC which includes land, buildings, and items placed in, on or under the land comprising a Lot.Key amendments introduced by Real Property Law 2018 in relation to leasing and transfer of Real Property Interests:
- For any DIFC property where the term of the lease (including any option to renew, whether or not exercised) exceeds 6 months, the Lease must be registered as Real Property Right with the DIFC Registrar.
- Where the properties are mortgaged, the freehold transfer fee needs to be paid within 50 days from the date of signing the memorandum of understanding between the two parties.
- The Real Property Law regulations have further extended the scope of exemptions by providing total 8 exemptions from the payment of freehold transfer fee which is generally charged at 5% of the purchase price or market value.
- While transferring non-freehold interests, a new schedule of registration fees will apply.
The Real Property Law requires the developer to register Off Plan development in the Off Plan register. The developer needs to open an Escrow Account in order to execute Off Plan Sales Agreement.
This Law requires the developer to include a copy of the proposed Strata Plan or Strata Plans identifying the Common Property & a copy of the proposed Strata Management Statement or Strata Management Statements disclosing the proposed management structure and rules under the disclosure statement.
This Law stressed the developer’s obligation to rectify construction defects in the Off Plan development. Developers are now responsible for repairing, rectifying or replacing all defective building works, materials, equipment and installations of non-structural nature within 1 year and structural nature within 10 years from the date of completion of the building.
This Law provides a clear process for registering a lien in case of unpaid Service Charges. Know more about our Business Advisory Services.
Last Updated: 8th December 2018
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