News

The Dubai Land Department (DLD) has recently introduced an update allowing the owners of 128 plots in Sheikh Zayed Road (from the Trade Center roundabout to the Water Canal) and 329 plots in Al Jaddaf to convert their property status to freehold.

Accordingly, the Dubai Land Department amended Article 3 of Regulation No. (3) of 2006[1] On ‘Determining Areas for Ownership by Non-UAE Nationals of Real Property in the Emirate of Dubai’ and which stipulates that

The freehold conversion initiative aligns with the Dubai Land Department Law No. 7 of 2013 and subsequent amendments, which govern property registration and ownership rights, emphasizing transparency and investor protection.

This announcement increases the possibility for foreign investors to acquire new real estate in Dubai and to obtain long-term security for their investments in Dubai. While it is an amazing news for foreign investors and potential property owners in Dubai, the procedure to be followed to be able to acquire such plots is as follows:

Why We Believe this Amendment was Implemented, and Why Now?

This new amendment was strategically implemented to achieve multiple objectives:

1. Revenue Generation for the Dubai Government: The 30% conversion fee on property valuation will serve as a significant new revenue stream for the government, to build infrastructure in the developed areas.
2. Development of Prime Areas: The areas chosen for freehold conversion, Sheikh Zayed Road and Al Jaddaf, are close to Dubai’s center yet undeveloped. These locations reflect the government’s intent to attract investment towards new zones, ensuring long-term economic and urban growth.
3. Timing with Market Dynamics: The amendment happen together with the real estate market approaching its peak, making it the ideal time to attract new investors and capitalize on the heightened market activity.

See below a map of the existing freehold area and indicatively marking the newly added area:

Note: This map was not provided by the Dubai Land Department and is intended solely for illustrative purposes as part of this article.

The Process for Converting Your Property to Freehold

1. Download Dubai REST App: the plot owner should download the Dubai REST App, which is the smart real estate platform for real estate services, through which all real estate services performed by property owners, tenants, real estate brokers, developers, real estate valuators, investors and all beneficiaries of the real estate market. Download links: Google Play: https://play.google.com/store/apps/details?id=ae.gov.dubailand.selfregistration&hl=en App Store: https://apps.apple.com/us/app/dubai-rest/id1437805105
2. Verify Plot Eligibility: after downloading the app, property owners must input the details of their plots to verify eligibility for freehold status conversion. Only plots within the designated areas of Sheikh Zayed Road and Al Jaddaf are eligible.
3. Submit an Application: eligible plot owners must submit a formal application to the Dubai Land Department. The DLD will assess and valuate the property to determine its current market value based on the gross floor area.
4. Pay the Conversion Fee: a conversion fee of 30% of the property valuation is required to proceed.
5. Receive the New Title Deed: upon successful completion of the process and payment, the Dubai Land Department will issue a new title deed reflecting the freehold status of the property.

Criteria for Application Success

To ensure your application is successful, you must meet the following criteria:

1. Ownership Documentation: provide valid and up-to-date ownership documentation. This includes the original title deed, property map, and any associated agreements.
2. Compliance with Zoning Regulations: The property must adhere to zoning and development regulations stipulated by the Dubai Municipality and the Dubai Land Department.
3. Clearance of Liabilities: any outstanding mortgages, encumbrances, or liens must be resolved prior to application submission.
4. Timely Fee Payment: prompt payment of the 30% conversion fee is important for completing the process. Delays may result in application rejection or penalties.

How BSA Law Can Help You

Converting your property to freehold is a transformative step but involves multiple steps and legal processes. At BSA Law, we are well-versed in Dubai’s property laws and can help you handle your property status conversion.

Here’s how we can assist:

1. End-to-End Liaison with Authorities: Represent you throughout the process, coordinating with the Dubai Land Department and other relevant bodies, including:
   • Application Preparation: Assist in preparing and submitting a complete application to the Dubai Land Department.
   • Property Valuation Support: Liaise with the DLD during the valuation process to ensure fair and accurate property assessment.
   • Documentation Review and Preparation: Handle all ownership documentation, ensuring compliance with legal requirements.
   • Post-Conversion Support: We are pioneers in the Dubai real estate market, having been involved in several key freehold projects that have helped put Dubai’s real estate sector on the global map.
   • These newly added areas present excellent opportunities for new joint ventures, where properties can be contributed as in-kind investments to establish new companies aimed at executing innovative projects in the UAE.
   • This also presents a prime opportunity for property owners to benefit from the concept of musataha (long-term usufruct rights), which entails collaboration on development projects or leasing the property for commercial purposes, ensuring sustainable and profitable ventures.
   • In both cases, we can assist in the by launching the project, registering it with RERA, opening an escrow account, and managing all the necessary steps for a successful outcome.
   • Additionally, we offer expert advice on strategies to maximize long-term growth through your property. This includes guidance on rental agreements, licensing arrangements, and ensuring full compliance with local regulations to optimize returns on your investment.
2. Dispute Resolution: Our litigation team composed of over 50 lawyers can provide legal support to resolve any issues related to encumbrances, zoning regulations, or application rejection and represent you before mainland courts and DIFC courts.

[1] https://dubailand.gov.ae/media/zrrd4qw4/en-legislation.pdf