Dubai reveals “Musataha” law to encourage real estate investment

by Editor

Dubai has enacted a new law to encourage public-private partnerships for real estate investment.

According to Emirates News Agency, Sheikh Mohammed bin Rashid Al-Maktoum, vice president and prime minister of the UAE, issued the order regulating “Musataha” rights on commercial land in Dubai.

According to the new law, Musataha agreements permit investors to construct, mortgage, lease, sell, and purchase a block of property belonging to a third party for up to 35 years.

The decree aims to encourage the formation of new construction projects in the emirate as part of efforts to maintain its state as a premier international location for real estate investment.

Contracts with Musataha may be renewed for up to 50 years. A request for renewal must be submitted two years before the expiration date.

The holder of the agreement is subject to a variety of laws and restrictions. Among them is abstaining from modifying the use of commercial property without the agreement of the landowner.

Depending on the holder, each Musataha agreement must also be registered with the Dubai Land Department or the Dubai International Financial Centre.

The Dubai Land Department must specify the agreement’s terms, conditions, and obligations.

The department may conduct an inspection of commercial land subject to a Mustaha agreement to ensure that the agreement is being adhered to in its entirety.

The provisions and amendments of the Government Claims Act No. 3 of 1996 must be observed if the Dubai Land Department is to promote the peaceful resolution of disputes resulting from complaints and grievances.

The directive requires the Dubai Land Department to create a specialized registry for Musataha agreements.

The new rule also defines the penalty that would be levied if a project erected on commercial property covered by the agreement is not accompanied by a certificate of completion.

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