Real Estate 2023

Last Updated May 04, 2023


Law and Practice


DLA Piper LLP has a market-leading real estate offering, with an international multidisciplinary team of lawyers that can serve client needs globally across the real estate sector. The firm has more than 750 real estate lawyers operating in more than 40 countries around the world, serving clients in key real estate markets, with strongly established teams in the Americas, Europe, the Middle East, Africa and Asia Pacific. DLA Piper works with clients through all stages of the real estate life cycle, including planning, acquiring, finding, developing, leasing, completing, trading and divesting. Working through this cycle, it offers the following services: financing, acquisitions and disposals, asset management, construction, cross-border investment, development, fund formation, joint ventures, leasing, litigation, planning, zoning and environmental issues, public-private partnerships, REITs, restructuring and tax. The team works alongside investors, lenders and developers on every aspect of their real estate activities. The firm would like to thank Paul McViety for his contribution to this chapter.

The United Arab Emirates (UAE) Civil Code (Law No (5) of 1985, as amended) and the UAE Constitution regulate property rights and property transactions at a federal level. In addition, laws relating to property ownership are enacted by each of the seven Emirates within the UAE. 

Within the Emirates there are “free zones‟, which are authorised to issue their own laws and regulations. For example, the Abu Dhabi Global Market (ADGM) and the Dubai International Financial Centre (DIFC) have real estate laws that differ to the remainder of Abu Dhabi and Dubai.

This guide focuses on Abu Dhabi and Dubai, which are the main commercial hubs and attract the most foreign investment into real estate in the UAE.

Initiatives to attract foreign investors and residents such as increases in permitted levels of foreign ownership of companies across a range of economic activities, a mandatory unemployment insurance scheme and broader visa schemes to attract entrepreneurs and workers in key sectors are having a positive effect on the real estate market. Dubai’s residential market performed particularly well in 2022 due to a marked increase in demand, with record growth for prices and rents reported for apartments, off-plan sales, and villas. According to reports, Dubai’s luxury homes market outperformed most of its global peers in 2022.

Since the beginning of 2022, the office, hospitality, retail and industrial segments of the real estate market have generally improved. Grade A office space remains in high demand in Dubai with ICD Brookfield Place announcing commitments of 95% as of March 2023. 

The retail and hospitality sectors have reported significant increases in footfall and revenue since COVID-19 restrictions have eased, which have been further boosted by the 2022 FIFA World Cup hosted in neighbouring Qatar which brought significant numbers of tourists to the region and an uptick in business travel. It is noticeable that retailers are prepared to push landlords for greater incentives such as capital expenditure contributions and revenue-share options as cash flow affected by the pandemic remains a concern. There is an increasing trend towards franchising for mid-range and business hotels, whilst new luxury hotel projects commonly incorporate a branded residences component. 

Logistics, healthcare and data centres are asset classes benefiting from digital transformation and demand for e-commerce, both accelerated by the pandemic.

The increase in real estate demand is reassuring against the backdrop of global economic uncertainties due to increasing interest rates and inflation. However, transaction activity in the UAE’s real estate market is expected to slow in 2023 due to higher debt costs and economic uncertainty. Notwithstanding this, the UAE’s GDP is expected to continue to grow in 2023, which may improve occupier markets and lead to a steady increase in rental values.

Tokenisation, underpinned by blockchain technology, is attracting interest amongst major developers due to its potential for increased capital access. The UAE Security and Commodities Authority and its ADGM and DIFC counterparts are each focused on putting regulatory environments in place to encourage crypto fundraising and develop markets for trading within the UAE. Smart Crowd is the first DFSA-regulated real estate crowdfunding platform in the Middle East and Africa and is another potentially attractive source of capital for developers.

COVID-19 propelled the need for Proptech across all aspects of the real estate market, from virtual viewings to property management, real-time data in malls, completing transactions and transfers of real estate. The development and adoption of Proptech are expected to continue to grow at a rapid pace.

The Dubai Land Department is employing the use of blockchain technology in three initiatives to improve the provision of real estate services and create secured digital assets:

  • ownership verification in DLD mobile application;
  • property sale by developer; and
  • smart leasing process.

There is no formal requirement in the UAE to make public any proposals for reform. 

In the UAE, there are five main types of property interests that can be held:

  • absolute ownership (freehold);
  • usufruct interest;
  • musataha interest;
  • leasehold interest; and
  • granted land. 

Absolute Ownership (Freehold)

In Abu Dhabi, UAE nationals and companies wholly owned by them may hold real estate (without restriction), while nationals of other Gulf Cooperation Council (GCC) countries and foreigners (non-UAE/non-GCC nationals) and companies wholly or partially owned by such individuals may own real estate in designated “investment areas‟.

In Dubai, nationals of GCC countries, UAE-incorporated companies wholly owned by them, and UAE-listed and public joint stock companies may have absolute ownership of real estate. All other nationalities are only permitted to own real estate in areas designated for foreign ownership.

Usufruct and Musataha Interests

A usufruct interest is a right in rem in favour of the grantee to use and exploit the property of another, provided the property remains in its original condition. 

A musataha interest is a type of usufruct that confers upon the grantee the right to build upon the land of another. 

In Abu Dhabi, both usufruct and musataha rights can be held by UAE nationals and UAE-incorporated companies wholly owned by them (without restriction) and by non-UAE nationals in designated investment areas only.

In Dubai, both usufructs and musatahas can be held by GCC nationals and UAE-incorporated companies wholly owned by them but by non-GCC nationals in designated areas only. 

In all cases, usufructs are restricted to a maximum term of 99 years and musatahas to a maximum of 50 years (renewable once in Abu Dhabi).

Leasehold Interests

Generally, leasehold interests in the UAE are treated as personal rights between two parties and not real rights. 

An exception to this is leases of 25 years or more in Abu Dhabi and leases of ten years or more in Dubai, which are each considered real rights and can be registered as such.

Granted Land

Land may also be “granted‟ by the Rulers of each Emirate to Emirati citizens or companies owned by Emiratis. The granting of such land can be revoked by the Ruler at any time and is subject to obligations to develop and restrictions on the use and disposal thereof. 

The following federal Laws are relevant: 

  • the Civil Code (as amended); and
  • Federal Decree-Law No (50) of 2022 on Commercial Transactions, as amended (the UAE Commercial Code).

Each Emirate has its own laws and regulations governing the transfer of title. 

In Abu Dhabi, the relevant laws relating to the transfer of title include:

  • Law No (3) of 2005 (as amended): concerning the regulation of property registration in the Emirate of Abu Dhabi, together with Decision No (52/1) of 2008 (as amended) of the Chairman of the Department of Municipal Affairs on the issue of an executive regulation regarding the organisation of real estate registration in the Emirate of Abu Dhabi;
  • Law No (19) of 2005: Re-organising Real Property in Abu Dhabi, as amended by Law No (2) of 2007, Law No (10) of 2013 and Law No (13) of 2019; and
  • Law No (3) of 2015: concerning the regulation of the real estate sector in the Emirate of Abu Dhabi.

In Dubai, the relevant laws relating to the transfer of title include:

  • Dubai Law No (7) of 2013: concerning the Land Department;
  • Dubai Executive Council Decision No (30) of 2013: approving fees of the Land Department;
  • Dubai Decree No (4) of 2010: regulating the granting of title to allotted industrial and commercial land in the Emirate of Dubai, as amended by Decree No (25) of 2022;
  • Dubai Law No (13) of 2008: regulating the interim property register in the Emirate of Dubai, as amended by Dubai Law No (9) of 2009, Law No (19) of 2017 and Law No (19) of 2020;
  • Dubai Law No (6) of 2019: regulating the joint ownership of real estate in the Emirate of Dubai; and
  • Dubai Law No (7) of 2006: concerning real property registration in the Emirate of Dubai, as amended by Dubai Law No (7) of 2019.

The laws apply to all asset classes. 

Registration of Transfers

All transfers of land in Abu Dhabi and Dubai must be registered. 

In Dubai, this is done in person at one of the trustee offices of the Dubai Land Department (DLD), while in Abu Dhabi it is done at the Abu Dhabi Department of Municipalities and Transport (DMT). DIFC and ADGM have their own system of land registration and maintain their own registers. 

Certain other free zones maintain their own register of real estate interests, but this does not negate the requirement to register land transactions at the onshore land register.

In order to register a transfer, all parties to the transaction are required to attend the relevant land registration department in person to sign the transfer documentation in the presence of a departmental representative, and to exchange cheques as payment of the purchase price and registration fees. 

DMT in Abu Dhabi recently launched a digital services platform, “Dari‟, with a view to gradually migrating the conveyancing process online. This has been facilitated by a recent change in federal law permitting the electronic execution of real estate contracts and instruments.

Off-Plan Sales Contracts

In Abu Dhabi and Dubai, contracts for the sale of real estate that is being developed (ie, off-plan) have to be registered on an interim register. Interim registration does not, however, create any legal ownership. Upon completion of the unit, the interim registration is cancelled and full registration occurs. 

Title Insurance

It is not common for title insurance to be obtained in the UAE. 

In the UAE, the due diligence process can often be difficult due to the lack of information made publicly available. The land registers are not publicly searchable. 

Most information relating to the ownership or particulars of a property (ie, title certificates, affection plan, zoning information, etc) can only be obtained from the relevant governmental departments upon application from (or with authorisation of) the owner of the property. Some information relating to utility arrangements, community charges, leases or other contracts affecting the land can only be obtained from the owner of the land. 

As a result, any due diligence carried out will typically be reliant upon materials provided by the seller’s lawyer (which includes title certificates and searches) and the seller’s response to follow-up enquiries made by the buyer.

Representations and warranties in a sale and purchase agreement are subject to agreement by the parties and vary from contract to contract. 

Abu Dhabi and Dubai laws remain largely silent on the representations and warranties implied in the sale of property, with the exception of the sale of off-plan units. 

Under both Abu Dhabi and Dubai law, a developer selling a unit off-plan is required to repair any structural defects in a unit for ten years from the date of issue of the completion certificate and liable for latent defects for one year from the issue date of the completion certificate. 

Although representation and warranty insurance is not available for direct real estate transactions, it is increasingly common in corporate M&A deals. 

An investor should pay particular attention to the planning, zoning, construction, environmental and health and safety laws that may apply to the property and obtain assurances that all requisite approvals have been obtained prior to the building having been constructed. 

Non-UAE nationals should carefully consider whether the property is in an area in which the buyer is legally permitted to hold the interest that they plan to buy.

There are environmental laws at both federal and Emirate level in the UAE. The federal laws primarily aim to control all forms of major pollution and will apply to the principal polluter (developer, industrial organisation, etc). There is a possibility that environmental liabilities can pass with land, particularly if the breach of environmental laws continues after the purchase by the buyer. 

The DMT and the Dubai Municipality (DM) are responsible for the zoning of land in their respective Emirates. Each issues affection plans in respect of plots of land, which state the zoning and details regarding the size of the building permitted to be built on such land. 

Expropriation of land is possible in both Abu Dhabi and Dubai, but the UAE Constitution and Civil Code restrict the right of a public authority to expropriate land unless it is for a public benefit, and compensation will be paid to the party being disadvantaged by such expropriation.

Dubai recently introduced a formal statutory process for expropriation of property for public use to be overseen by the newly established “Expropriation Committee‟. 

Asset Deals

In Abu Dhabi, the seller and buyer are required to pay a registration fee of between 1% and 4% of the purchase price/returns under the contract, which is split equally between the parties unless otherwise agreed. 

In Dubai, the seller and buyer are required to pay a registration fee of 4% of the purchase price, which is split equally between the parties unless otherwise agreed. In practice, it is common for the buyer to pay the full 4% transfer fee.


A mortgage taken over a property must also be registered. The current applicable mortgage registration fees are 0.09% of the mortgaged amount in Abu Dhabi and 0.25% of the mortgaged amount in Dubai (up to a maximum of AED1.5 million). 

Share Deals

In Dubai, the DLD requires notification of any changes in the shareholding of real estate-owning companies, and a proportionate transfer fee will be applied. Failure to inform the DLD can result in a fine.


VAT is applied to the sale of real estate assets at the following rates:

  • sale of commercial property: 5% standard rate;
  • first sale of new residential property: 0% (zero rated);
  • subsequent sale of existing residential property: exempt (no VAT); and
  • sale of bare land: exempt (no VAT).

The sale of an investment property may be exempt from VAT if it is classified as part of a “transfer of a going concern‟. 

There are legal restrictions on foreign investors acquiring real estate, as set out in this guide. 

Financing of the Acquisition (or Development) of Real Estate through Loans from Licensed Banks

It is quite common for the acquisition (or development) of real estate in the UAE to be financed by way of the borrower obtaining a loan (often with a mortgage as security for repayment). A loan can be provided either on a bilateral basis (single lender providing the entire facility) or on a syndicated or club basis (multiple lenders, each providing parts of the overall facility). Syndicated facilities by their nature involve more parties, and as such are often highly structured with more complex documentation. Larger financings are typically done on a syndicated basis.

A loan can be either secured, unsecured or guaranteed. Only banks licensed by the UAE Central Bank are eligible to be mortgagees of record for real estate in the UAE. 

Islamic Finance Structures

Another popular way of financing the acquisition of real estate in the UAE is through Islamic financing. Islamic finance structures and techniques have developed in accordance with sharia principles, and these principles must be adhered to when deciding whether a proposed financing structure or product is Islamically acceptable. One of the key principles is that the payment and receipt of interest (riba) is prohibited under Islamic law (and any obligation to pay interest is considered to be void).

However, Islamic principles do not prohibit a financier in an Islamic finance transaction from making a profit, rental or other return on its asset or investment. 

Completed and existing real estate property can sometimes be financed through sale and leaseback arrangements (ijara), where the borrower sells the real estate to the Islamic financier and subsequently leases it back. The essential features of a conventional loan (such as the applicable margin on each repayment amount) are reflected in the leaseback arrangements. However, this kind of arrangement may attract registration and other costs, which can make a leasing/ijara structure economically unviable.

By contrast, commodity murabaha (also known as tawaruq) financing structures rely upon underlying commodity trades in order to create debt-based obligations (like a conventional loan). This particular structure does not involve any additional transfers in respect of the underlying real estate asset, and it can also be structured on a bilateral or syndicated basis in the same way as a conventional loan. These kind of commodity murabaha structures can also be secured using a mortgage over the underlying real estate, as well as other security.

Other Financing Structures

There is a general trend towards the establishment of real estate funds/real estate investment trusts (REITs) whereby stakeholders inject capital into a fund whose principal objective is to invest in strategic real estate in the UAE (and/or the wider GCC area) and to grow a real estate portfolio for the fund’s investors. Whilst the UAE is not traditionally recognised as a funds jurisdiction, the development of offshore jurisdictions such as the DIFC and the ADGM with evolving legislation aimed towards the development of a funds market has made these financial free zones a more attractive jurisdiction for the establishment of such real estate funds. 

Another alternative is to access the debt capital markets, through either bonds or sukuk (also known as Islamic bonds). There are a number of UAE-based issuers who are real estate developers that have issued into the debt capital markets in this way.

Real Estate

Security over real estate and real estate interests (such as usufruct or musataha) can be taken by way of a mortgage that is registered at the relevant land department. Some of the Emirates (and free zones) have specific laws dealing with mortgages but, in the absence of legislation, mortgages are generally governed by the Civil Code. Although the practices of the relevant registrars may differ and evolve, generally speaking mortgages over real estate may only be granted in favour of a bank that is licensed by the UAE Central Bank. 

The UAE Central Bank has issued detailed regulations on mortgage lending, which define the eligibility of various categories of borrowers based on a loan-to-value ratio (LTV). The primary aim of those regulations is to ensure that banks, finance companies and other financial institutions providing mortgage loans do so in accordance with prudent practices and have control frameworks in place. 

Movable Property

Security was historically taken by way of a possessory pledge, with the fundamental element of this security being that the beneficiary of the security can demonstrate either possession or control of the secured property. In 2016, the UAE issued a new federal regulatory regime, which provides that a wide variety of assets (such as accounts, trade payables or receivables and equipment, including any future movable property) can be secured without demonstrating possession – provided that the security is registered on the applicable security register. 

Federal Law No (4) of 2020 as amended (the Movable Assets Mortgage Law) is an update and replacement of the initial Federal Law No (20) of 2016 and enables additional security over accounts and receivables to be taken with a greater level of certainty in the context of real estate financing transactions, and enables security to be taken over movable property that is similar in effect to an “all assets” debenture. In terms of registration, the current applicable security register where such security over movable property is to be registered is held with the Emirates Integrated Registries Company.

Security over Shares

Where a special purpose company (SPC) has been established for the purposes of a real estate investment or development, it may be possible for the financiers to take security over the shares of that SPC. As a general rule, it is possible to take security over the shares in a company, including onshore limited liability companies (LLCs). However, there are restrictions on which entities can own real estate, and the process for share pledges can differ depending on where exactly a company is registered. 


Guarantees are common in the UAE, including corporate and/or personal guarantees given in relation to a real estate financing. These kinds of guarantees are specifically codified in the Civil Code and the UAE Commercial Code. In addition, a separate set of rules applies to bank guarantees under the UAE Commercial Code.

UAE Central Bank rules and regulations provide that a party wishing to hold security over real estate must be a bank, company or financial institution licensed by the UAE Central Bank to provide property finance. Foreign (unlicensed) lenders will often appoint a locally licensed security agent to act on their behalf in relation to security over real estate assets.

There are currently no restrictions on repayments being made to a foreign lender under a security document or loan agreement, other than in relation to the following areas:

  • restrictions or measures designed to counteract money laundering and/or the funding of terrorist activities; and
  • transactions involving certain sanctioned countries or blacklisted entities. 

However, the UAE Central Bank has the right to impose additional restrictions from time to time.

The following fees are payable in relation to granting and enforcing security over real estate:

  • a bank property valuation fee;
  • notarial fees for documents that must be notarised; 
  • a mortgage registration fee;
  • notarial fees to give notice of default (Dubai);
  • a publication fee and a public auction fee if a secured asset is sold by public auction; and 
  • court fees (as prescribed by the relevant court) for enforcement of a security interest.

Under the UAE Companies Law, it is not possible for a joint stock company (JSC) target, or any of its subsidiaries, to provide any financial aid (such as loans, security and guarantees) that will assist a buyer in acquiring its shares. However, limited liability companies are exempt from such restrictions under a Ministerial Resolution of 2016. In any event, as a matter of good practice, all companies would be advised to demonstrate that there is a corporate benefit to the company granting any security.

The enforcement procedures for mortgages in Abu Dhabi and Dubai are broadly similar and are set out in the Civil Code, the Civil Procedures Law and Abu Dhabi Law No (3) of 2015 for Abu Dhabi and Law No (14) of 2008 for Dubai. 

A lender is entitled to satisfy the debt from the mortgaged property when the debt falls due, provided that the mortgage has been properly registered.

Upon a default in payment by the borrower and provided that the mortgage has been registered, the lender must give 30 days’ notice to the debtor by registered mail (Abu Dhabi) or through a Notary Public (Dubai) before commencing execution proceedings. If the payment is not made within such 30-day period, the magistrate of summary justice (in Abu Dhabi) or the execution judge (in Dubai) shall, upon the request of the lender, order an attachment against the mortgaged property, and shall issue, at the request of the lender, a decision enabling the mortgaged property to be sold at public auction. 

The court may postpone the sale of the property by public auction for a period of up to 60 days if it is of the opinion that the mortgagor may be able to settle the debt within this period, or if the sale of the property would cause “serious damage‟ (Abu Dhabi) or “substantial damage‟ (Dubai) to the mortgagor. If the court orders the sale of property to proceed, then a public auction of the property will occur, in accordance with the procedures applicable at the relevant court. It is not clear exactly what would constitute substantial damage in this context.

The time range from commencement of proceedings through to sale at public auction varies in Dubai and Abu Dhabi and can take between 6 to 12 months, depending on various factors, including whether the order is contested by the debtor.

If the real estate is insufficient to satisfy the debt, the mortgagee may have recourse against the mortgagor’s other assets as an ordinary creditor. The mortgagee must follow the statutory procedure, and provisions in the mortgage document attempting to circumvent this procedure would be held to be void.

Regarding whether there are any ongoing restrictions on a mortgagee’s ability to foreclose implemented as a result of the COVID-19 pandemic, no such specific restrictions relating to foreclosure are currently in place (although the UAE Central Bank over the course of the pandemic did provide assistance to financial institutions so as to facilitate and encourage loan deferrals for certain eligible customers).

In both Abu Dhabi and Dubai, if a security interest is required to be registered, then the date of registration determines its ranking. If it is not registrable, then it will rank in order of the date of creation (noting, however, that the laws relating to priority are largely untested in the UAE). If two or more applications to register a mortgage against the same property are made at the same time, then the mortgages are registered together and rank equally in the distribution of auction proceeds.

A lender may assign the ranking of its mortgage to another creditor that has a security interest in the same property. This is typically done contractually through intercreditor or subordination agreements entered into between creditors. 

Environmental laws in the UAE are not particularly detailed, but the relevant authorities are likely to pursue the party responsible for causing the environmental harm, which may or may not be the mortgagor. If there are any remedial costs associated with rectifying the damage, the law provides that the lender may “take whatever legal action is necessary to protect its rights and recover the costs from the mortgagor‟. In addition, the mortgage will typically contain indemnities in favour of the lender in the case of pollution or other acts caused by the mortgagor that are harmful to the environment.

Federal Decree Law No (9) of 2016, as amended (the UAE Bankruptcy Law) came into effect on 29 December 2016, but there remains a degree of uncertainty as to the correct application of the new law (and its supplementary regulations). The UAE Bankruptcy Law provides that a declaration of insolvency will not result in the dissolution of contracts that are binding on both parties unless the services are “personal‟ in nature.

If a borrower declares insolvency, the lender’s security interests will not be extinguished to the extent that such security is not challengeable as an antecedent transaction.

The obligations of a UAE company are subject to limitations arising from bankruptcy, liquidation, composition and all other laws and general principles affecting the rights of creditors generally. It is not possible to confirm a UAE company’s solvency because there is no practical or effective way of determining whether a petition for bankruptcy, liquidation, composition or other similar insolvency event has been filed in the UAE.

The Emirates Inter Bank Offered Rate (EIBOR) is often used as a benchmark for variable rate lending (in the local currency) in the UAE real estate sector. However, given the prevalence of US dollar lending in the UAE banking market (and the local currency peg), the discontinuance of LIBOR has had a similar impact on banks operating in the UAE as compared with banks elsewhere, with UAE banks generally adopting similar practices as banks have adopted in other markets in response (such as by transitioning to the use of “Term SOFR” or other “risk free rates‟ for US dollar loans). The discontinuance of LIBOR also impacted on the structuring of Islamic financing transactions that use LIBOR as a benchmark in the calculation of the profit.

Abu Dhabi

In Abu Dhabi, the planning powers are vested in the DMT.

Major developments are subject to a review process, established by the DMT, in line with the longer-term strategy for Abu Dhabi’s urban development. The review process includes four key steps. 

  • Step 1 – an information meeting is held by the DMT with the owner/developer on the acquisition of a development site to enable the DMT to provide the applicant with relevant information (eg, plans, policies, processes, etc). 
  • Step 2 – the applicant is required to prepare preliminary development options. General land use and site layout must be provided. The DMT and the applicant will review the options and then select an option to develop through to concept plan stage. 
  • Step 3 – the applicant is required to submit a concept plan for evaluation and approval by the DMT and other government authorities. The concept plan will be reviewed for compliance with the Emirate’s urban and development plans and policies. 
  • Step 4 – the detailed plan.

For small and medium-sized projects, applicants can then prepare and submit detailed site and building plans for review. This step also confirms that any conditions of approval have been met. The planning review process ends once these steps have been satisfactorily carried out, and the applicant is then ready to apply for municipal building permits. 

For large projects, this stage of the process is aimed at helping applicants translate concept master plans into detailed regulations and guidelines. Additional developer and DMT/municipal review are required for large projects, to ensure compliance with DMT-approved regulations and guidelines before the applicant can apply for building permits.


Currently there is no single source of published legislation in relation to the process and procedures of obtaining planning and zoning permission, although announcements have been made in respect of a new Urban Planning Law intended to support the implementation of Dubai Plan 2040. As the process is not yet clearly stated in legislation, much of the process is based on practice and custom, the general process for which is set out below. 

An owner or developer obtains an “affection plan‟ from the DM. The affection plan is a high-level general site plan issued with basic information containing the plot number, the land use classification and any other particular zoning requirements that are required by the DM. 

The plan will state the height allowance, the usage, any setback requirements and whether parking must be included. It will also state what permissions from the particular government authorities or third parties will need to be obtained prior to approval. There are no general rules regarding the requisite authorisations, as each affection plan is issued on a plot-by-plot basis. Depending on the location of the plot, additional approvals may be required, including approvals from Dubai Electricity and Water Authority, Civil Defence, Etisalat, the master developer (if applicable), and any other authorities listed on the affection plan.

The Supreme Committee for Real Estate Planning was established in 2019 and aims to develop a strategic plan for all major real estate projects in Dubai over the next ten years.

Abu Dhabi

To assist in regulating the design, appearance and method of construction of new buildings, the DMT has adopted the International Codes of the International Code Council, such as Building, Fire, Plumbing Codes, etc, and the Abu Dhabi Environmental Health & Safety Management System. Any development must also comply with the statutory requirements of other government agencies, such as the Department of Transport and Abu Dhabi Waste Management Control.


Dubai Administrative Resolution No 125 of 2001 concerning the adoption of Building Regulations and Standards provides the public law control for the technical aspects of the detailed design, as well as the restrictions for aesthetic and heritage areas.

Numerous technical guidelines and circulars issued by the DM also regulate the detailed design. These need to be examined on a case-by-case basis to ensure that the detailed design is compliant with the relevant regulations for the area where the building is being constructed.

The main bodies responsible for regulating the development and designated use of land are the DMT in Abu Dhabi and the DM in Dubai. 

An application must be submitted to the DMT (Abu Dhabi) or the DM (Dubai) (or relevant free zone authority) for the approval of proposed developments or any change of use. Generally, there are no formal consultation processes involving third parties.

There is no right or formal process to appeal a decision of a relevant authority in either Abu Dhabi or Dubai. 

In Abu Dhabi, the decision of a governmental authority may be reviewed by the Ruler of the Crown Prince’s Office by direct application, and in Dubai, it is possible to apply to the Ruler’s Court. In both cases, the power to intervene in such decisions is entirely discretionary.

Non-binding Memoranda of Understanding are common between master developers and statutory utility suppliers. Binding agreements are common with providers of district cooling services, which are sometimes project financed. Formal agreements with local authorities are rare.

The DMT (Abu Dhabi) or the DM (Dubai) can order a contractor to stop work and, in extreme cases, demolish unapproved structures. This is likely to be established during an inspection before granting a completion certificate.

A building completion certificate is required for occupation of the building to be allowed but will not be issued if the building permit has not been complied with. 

Various types of corporate vehicles are capable of holding real estate assets in the UAE, including limited liability companies, public joint stock companies and private joint stock companies. 

If the holding company of a real estate asset has foreign shareholders, then the company may only hold the real estate asset within a designated investment area. 

A new Federal Law by Decree No 32 of 2021 (Companies Law) has been introduced and came into force on 2 January 2022. Additionally, a cabinet decision No 55/2021 was issued in relation to the determination of the list of strategic impact activities (Cabinet Decision). The Cabinet Decision sets out a “strategic list‟ of activities that will be precluded from increased foreign ownership. The strategic list includes the following sectors: security and defence activities and activities of a military nature; banks, money-changing establishments, finance companies, and insurance activities; printing cash currency; telecommunications; Hajj and Umrah services; Holy Quran memorisation centres; and fisheries-related services. 

Limited Liability Company 

In general terms and subject to the implementation of changes pursuant to the recent amendments to the Companies Law, an LLC must have between one and 50 shareholders. Shareholders’ liability is limited to the value of their contribution to the share capital.

Jebel Ali Free Zone Authority (JAFZA) Offshore Companies

In Dubai, it is possible for real estate to be owned by a JAFZA offshore company. Such a company can be fully owned by non-GCC nationals or companies owned by them, and therefore it is common for real estate in designated areas in Dubai to be held by a JAFZA offshore company. The minimum number of shareholders in a JAFZA offshore company is one.

Public Joint Stock Company (PJSC)

Share capital is divided into negotiable shares of equal value. The nominal value of each share cannot be less than AED1, nor more than AED100. Shareholders’ liability is limited to the value of their shares. A PJSC must have at least five founder members.

With the recent changes in the UAE Companies Law, a PJSC may be 100% foreign owned provided that the activities to be carried out fall outside the scope of the strategic list. The founding members are no longer required to subscribe for between 30% and 70% of the issued share capital – instead, they may now subscribe to new shares up to the percentage provided for in the prospectus and subject to the requirements of the Securities and Commodities Authority. 

Private Joint Stock Company (Private JSC)

A private JSC is similar to a PJSC but with certain differences, including:

  • the shares cannot be offered publicly; and
  • only two founder members are required.

The Companies Law provides that, unless specifically stated, all requirements that apply to a PJSC apply to a private JSC as well.

Limited Liability Company

There is no prescribed minimum capital amount for an LLC but the share capital must be adequate. This can be decided by the shareholders, and there is no published guidance in this regard. 

JAFZA Offshore Companies

The prescribed minimum capital amount for a JAFZA offshore company is AED1,000, and shares must have a minimum value of AED1 each.

Public Joint Stock Company

The prescribed minimum capital amount for a PJSC is AED30 million for a general company, and this amount increases for banks and insurance companies.

Given the substantial capital requirement and the fairly restrictive rules of establishment and management, a PJSC is often not a suitable corporate vehicle for overseas investors wishing to establish a vehicle for investment purposes.

Private Joint Stock Company

The prescribed minimum capital amount for a private JSC is AED5 million. 

Limited Liability Company

An LLC must appoint a general manager to manage the company. The general manager can be of any nationality but, in practice, proposed general managers are rejected without reason from time to time. An LLC must also appoint a UAE-certified financial auditor before the end of its first year of business, and the company accounts must be certified by such auditor each fiscal year. A general assembly (shareholders’ meeting) must also be held each year for all shareholders. 

JAFZA Offshore Companies

A JAFZA offshore company must appoint a registered agent, to whom notices are served. It must also have at least one director and a company secretary at all times; such individuals do not need to be resident in the UAE.

Public Joint Stock Company

Since a PJSC is required to be listed, it has to comply with the governance requirements of the relevant stock exchange, which include various disclosure requirements and the publication of accounts and other statements, and mandatory compliance with the Emirates Securities and Commodities Authority corporate governance code.

Private Joint Stock Company

A private JSC must have a board of directors consisting of between three and 11 directors, and each director’s term is no more than three years (subject to re-election). A chairman must be appointed from among the directors. 

The corporate governance requirements for a private JSC are less strict than a PJSC. Since private JSCs are not listed entities, they are not bound by the same disclosure requirements as PJSCs, unless the private JSC voluntarily chooses to adhere to the corporate governance code.

The annual compliance costs for an entity investing in real estate vary in line with the needs of each individual company.

In Abu Dhabi, the law does not provide a clear distinction between a lease (a personal right) and a usufruct (a right in rem). The law does state that long leases (ie, those with a term of 25 years or more) are property rights, but it does not clearly define the characteristics of leases with shorter terms. In practice, the DMT has deemed leases that have a term of more than four years and are granted in favour of a non-UAE national (or a company owned in whole or part by a non-UAE national) in relation to land outside an investment zone and which contain rights to sublet to be usufructuary rights (and, therefore, not capable of being granted to a non-UAE national outside an investment zone).

In Dubai, a long lease is one with a term of ten years or more, and these require registration at the DLD. For leases of less than ten years, registration is still required but at a nominal cost on the “ejari‟ system. 

In Abu Dhabi, the form of lease is not mandated but certain key provisions must be included – eg, parties, premises, rent and term. 

In Dubai, for leases of less than ten years, the DLD requires parties to use a mandatory form tenancy contract that records key provisions (eg, parties, premises, rent and term, etc). It is common for parties to attach supplemental terms to this mandatory form. 

Rent in the UAE may be freely negotiated between the parties to the lease. 

In Abu Dhabi, Executive Council Resolution No 14 of 2016 prohibits rental increases of greater than 5% per annum. 

In Dubai (excluding the DIFC), Decree No 43 of 2013 provides for the average market rent to be set according to the Rent Index for the Emirate of Dubai as approved by the Real Estate Regulatory Agency (RERA). The percentage of the maximum increase in real estate rents is determined on renewal according to the current annual rent amount compared with the average rent for a similar property. Whilst these restrictions apply to both residential and commercial property, in practice, alternative terms (such as fixed increases) agreed in relation to commercial property are likely to be respected.

Whilst the Abu Dhabi and Dubai governments acted quickly to introduce a number of stimulus measures in response to the COVID-19 pandemic, including temporary eviction moratoriums, these emergency measures have largely expired and there was no change to legislation governing commercial or residential tenancies in Abu Dhabi or Dubai arising from the pandemic. 

The terms of a lease may be freely negotiated between the parties, provided that the contents of the lease agreement do not contravene the law. 

Both the Abu Dhabi and Dubai landlord and tenant laws include provisions in relation to the repair and maintenance, termination and term of leases where the lease agreement remains silent on such topics, although, in practice, most contracts will contain express terms on those matters. 

In response to the COVID-19 pandemic, tenants have become more aware of the need for contractual relief from the performance of certain obligations (eg, continuous occupation/keep open provisions) where they have been impacted by government orders issued in the interests of public health and safety. It is also more commonplace for retailers to push for landlord incentives such as fit out contributions and a larger share of rent tied to turnover as cash flow remains critical.

The rent payable under a lease must be specified in the lease agreement and is generally subject to fixed or index-linked increases at regular intervals. In addition to a base rent, turnover rents are common in retail lettings.

Market rent review provisions are included in some leases, but these clauses are not used as frequently as in more developed real estate markets because reliable comparable transactions can be difficult to establish due to the lack of publicly available market data. 

Revised rents may be determined by applying a fixed or index-linked percentage increase, or by determining the open market rent. 

VAT applies to rent payable for a commercial property.

A tenant’s liability for upfront costs should be set out in the lease agreement.

The parties to a lease commonly agree that the tenant will be responsible for paying the registration fees associated with the registration of the lease at the relevant land department. Tenants are also generally responsible for the cost of opening an account for utilities and telecommunications, and for paying for meters and connections in new properties. 

A tenant may also be liable for the fees of any agent involved in the transaction.

A commercial lease agreement may impose an obligation on the tenant to pay a service charge to the landlord for the maintenance and repair of the common property. 

Premises will usually be individually metered, in which case the tenant will usually purchase services such as electricity or water directly from suppliers. 

A landlord will typically pay for building insurance in a multi-let property and a tenant will pay for its own contents insurance. A landlord will then recover the costs of the building insurance through a service charge. 

Under UAE federal law, there is an automatic rent cesser following damage to or the destruction of the property.

Generally speaking, property policies require physical damage arising from an insured risk and losses linked to office closures and increased sanitation/cleaning costs incurred during the COVID-19 pandemic have been outside of the coverage of such policies.

Leases normally specify the permitted use. If the lease is silent on this matter, the use should be consistent with the zoning authorised for such property and the licensed activities of the tenant company.

Abu Dhabi and Dubai laws require the tenant to obtain the consent of the landlord for all proposed works. The terms of a lease may also set out what kinds of works the tenant is permitted to carry out, when the landlord’s consent should be sought for such works and whether any types of works (eg, structural) are absolutely prohibited.

Certain works require the consent of government authorities, which will require evidence of the landlord’s consent to such works before issuing any consents. 

Abu Dhabi


There is a maximum number of tenants who are permitted to occupy a single dwelling, which varies depending on the type and number of rooms in the dwelling.

Two months’ notice for renewal or termination is required for residential leases.


Commercial leases have similar rules to those applicable to residential leases, with minor exceptions.

Three months’ notice for renewal or termination is required for commercial leases.

Hotels/serviced apartments

There are no specific provisions that apply to hotel leases. Leases of serviced apartments do not fall within the ambit of landlord and tenant legislation.


The same laws currently apply to residential, industrial, office and retail leases. The exception to this is accommodation provided by an employer to an employee. The DIFC Leasing Law 2020 draws a distinction between leases of commercial and residential premises, with enhanced protections afforded to tenants of residential premises.

The insolvency law applies only to commercial companies so if a tenant is insolvent and not a commercial company then the regular laws of landlord and tenant would apply, which would be the remedies for failure to pay rent. There are no provisions specific to insolvency in the landlord and tenant laws.

Under the insolvency law, the debtor has to first apply to the courts for the following:

  • a preventative composition, in which case it is the debtor’s duty to inform the courts of all and any creditors’ rights against the debtor, within 30 days of the application; or 
  • bankruptcy, in which case any ordinary creditors of ordinary debt under AED100,000 can apply to the court to open proceedings, as long as the creditor has warned the debtor to settle in writing and this has not been done within 30 days of the written notice to settle.

The parties to a lease agreement are able to agree the form of security to be provided by a tenant. Typically, a landlord may ask for a security deposit, bank guarantee and/or parent company guarantee.

Although it is common for a landlord to take a security deposit from a tenant, the Abu Dhabi and Dubai landlord and tenant laws do not provide detailed provisions on how such deposits must be held, when they can be utilised and when they must be returned. It is important, therefore, to ensure that a lease contains detailed provisions on dealing with the security deposit. 

If a lease term expires and the tenant remains in the property with the landlord’s knowledge and without any objection from the landlord, then the lease shall be renewed for a similar term and on the same conditions (in Abu Dhabi), or renewed for a similar term or a period of one year (whichever is less) on the same terms (in Dubai). 

If the lease agreement does not specify the terms of renewal, the Abu Dhabi and Dubai landlord and tenant laws set out a standard position to be implied into the contract. If a party does not wish to renew or wishes to renegotiate the terms of the lease, notice must be given in accordance with the landlord and tenant laws.

In Abu Dhabi and Dubai, a tenant may only assign the use, or sublease all or part of the leased premises, with the written consent of the landlord. Unless otherwise agreed, the landlord has sole discretion to withhold or grant its consent. 

In Abu Dhabi, tenants have a statutory right to request the Lease Disputes Resolution Committee (LDRC) to terminate a lease where the landlord hands over the property in such a poor condition that it cannot be used for its intended purpose.

The Civil Code also allows parties to an agreement to agree to an early termination. 

Break rights in longer term leases are common to allow tenants greater flexibility. Landlord break rights are less common and may not be effective in Abu Dhabi unless the landlord can also establish a ground for termination.

Abu Dhabi

Registration is a mandatory requirement for leases of less than four years and is undertaken by the landlord (or property management company) in the Tawtheeq system. 

For leases with a term of more than four years but less than 25, a 4% fee of the entire value of the consideration applies. 


Leases of less than ten years are required to be registered on the Ejari system, using the DLD mandatory form tenancy contract. A nominal registration fee is payable. 

Leases with a term of ten years or more require registration on the full register at the DLD. A registration fee equal to 4% of the total rental value of the lease is payable in equal proportion by the landlord and tenant, unless agreed otherwise. 

Abu Dhabi

Article 23 of Law No (20) of 2006 (as amended) sets out the grounds under which a landlord can seek early termination of a lease and re-enter the premises:

  • failure to pay rent;
  • assignment or subletting of the premises without consent;
  • high occupancy levels;
  • use of the premises other than for the purpose it was let or for a detrimental purpose;
  • the landlord wishes to demolish and redevelop the premises; 
  • the landlord wishes to occupy the premises for its own purpose;
  • breach of tenant’s obligations; or

If the tenant disputes the grounds for early termination of the lease, a case would be lodged at the LDRC, which determines landlord and tenant disputes. There are no guidelines as to how long the process would take. 


Article 25 of Law No (26) of 2007 (as amended) sets out the grounds under which a landlord can seek early termination of a lease and re-enter premises:

  • failure to pay rent, after notice;
  • subletting of the premises, without consent;
  • illegal or immoral use of the premises;
  • failure to keep the premises occupied for specified periods of time;
  • any change to the premises rendering it unsafe or causing damage;
  • unauthorised use of the premises;
  • condemnation of the premises;
  • breach of tenant’s obligations; or
  • demolition notice from authorities.

Where a landlord wishes to terminate a lease prior to its expiry pursuant to an event of default, 30 days’ prior written notice of default should be served on the tenant through a Notary Public or by registered mail.

If the tenant disputes the grounds for early termination of the lease, a case would be lodged at the Rent Disputes Settlement Centre. There are no guidelines as to how long the process would take.

Under the Civil Code, property can be appropriated by the government for the public benefit. In such circumstances, “just compensation‟ must be paid. Whether and to what extent the compensation would cover any tenant’s interests in the property is dealt with on a case-by-case basis.

The most common pricing structures are:

  • lump sum; and
  • measurement or unit price – valued on the basis of a bill of quantities.

Payment is usually made against the certification of completed works by an engineer appointed by the employer. 

The majority of construction contracts for major projects in the UAE are based on the industry standard form contracts published by FIDIC, and as such, responsibility for design and construction is allocated contractually in accordance with standard international practice. 

The contractual devices included in the FIDIC forms of contract are typically used to manage risk allocation in the context of a construction project (however, the standard FIDIC Conditions of Contract are often amended by employers to transfer additional risk to the contractor). Whilst the majority of the standard FIDIC provisions are generally viewed as being enforceable under UAE law, the Civil Code provides that an agreement or a contractual provision will be unenforceable if:

  • it conflicts with a mandatory provision of the law; 
  • it is contrary to public order or morals; 
  • it is performed in bad faith; or
  • a right is exercised in an unlawful manner (including where the benefit realised is disproportionate to the harm suffered by others, or where the interests sought to be realised conflict with Islamic sharia).

Any parts of an agreement that conflict with or are inconsistent with such mandatory provisions will either be rendered automatically void, or will provide the courts with the power to adjust the agreement to ensure consistency with mandatory provisions.

Virtually all construction contracts in the UAE require works to be completed by a specified date (commonly referred to as completion date). Instead of the employer bringing a claim for general damages (compensation) for late completion of the works by the contractor (which may be difficult to quantify), it is standard practice to require the contractor to pay “liquidated damages‟ (LDs) (eg, pre-agreed fixed amounts) for delay in achieving completion by the agreed completion date. 

The Civil Code provides that the parties can pre-agree an amount for damages, including for delay. However, either party may apply to a court or arbitrator to vary the agreed rate of LDs so that the compensation awarded reflects the actual loss suffered, and there is no express prohibition in UAE law on penalties and no requirement that LDs be a genuine pre-estimate of loss. Any attempt to distinguish between “penalty‟, “liquidated damages‟ and “compensation‟ is likely to fail under UAE law.

The court’s power to vary the agreed level of LDs is discretionary, and the party seeking to have the LDs reassessed must be able to demonstrate that the rate of LDs should be adjusted.

Construction contracts in the UAE typically provide for:

  • an “on demand‟ performance bond for 10% of the contract price;
  • an “on demand‟ advance payment guarantee securing the employer’s advance payments under the contract; and
  • retention of 10% from each interim payment as security for the contractor’s obligations to remedy defects during the defects notification period (or occasionally a bond in lieu of such retention). 

Company guarantees from a contractor’s parent or group company in favour of the employer are also fairly common, especially where the contracting entity is a special purpose vehicle.

Contractual payment security mechanisms, whether by way of a payment bond, a parent company guarantee from the employer, or escrow and project bank account arrangements are unusual in the UAE, although this is more as a result of commercial custom than because of any legal restrictions on such forms of security. 

The Civil Code provides a contractor or consultant with the potential remedy of a statutory lien over property in circumstances where the contractor or consultant’s work has produced a beneficial effect on the property, but the employer has failed to pay for such work. This entitles the contractor or consultant to retain (and not hand over) the property he has improved pending payment for such work by the employer. However, this mechanism remains relatively untested, and contractors and consultants typically rely on contractual remedies for non-payment. 

There are no express requirements to be satisfied under UAE law before a building may be inhabited or used, other than the issue of the “completion certificate‟, but the law is unclear as to whether this requirement relates to the completion certificate from the relevant authority confirming that construction is complete, or to the completion certificate issued by the engineer under the construction contract. 

In practice, a building completion certificate from the relevant municipality (following inspections of the works by the relevant authorities and civil defence) is usually stipulated as a contractual requirement before construction works can be used and occupied.

Since 1 January 2018, VAT at the standard rate (5%) applies to the sale of commercial property (whether such property is newly constructed or not). If the transaction can be treated as a “transfer of a going concern‟, then the transfer shall not be considered a supply for VAT purposes (hence no VAT will arise).

No methods are currently used to mitigate transfer, recordation, stamp or other similar tax liability on acquisitions of large real estate portfolios.

In Abu Dhabi, a municipality fee applies to anyone leasing property, except UAE nationals. Fees are calculated at 7.5% of the rent for residential villas and 5% of the rent for all other premises.

In Dubai, a municipality fee is imposed on the occupation of property and is calculated as 5% of the annual rent or 0.05% of the value of the property (in the case of ownership). Value is generally treated as the amount for which the current occupier bought the property.

There is no income tax applicable on rental income and no capital gains tax at present.

The UAE Corporate Income Tax (CIT) regime, effective from 1 June 2023, introduces a taxation on UAE sourced income generated by non-residents, in the form of Withholding Tax (WHT). The CIT law lists specific types of incomes that are considered UAE sourced income, and this includes income from property in the UAE, among others. The WHT rate is set by the CIT law at 0%. Further details regarding the taxation of UAE sourced income are expected to be provided in a UAE Cabinet Decision, which has not been issued as of the date of this publication. 

There are no tax benefits from owning real estate.

DLA Piper Middle East LLP

PO Box 121662
Level 9
Standard Chartered Tower
United Arab Emirates

+971 4 438 6100

+971 4 438 6101
Author Business Card

Law and Practice


DLA Piper LLP has a market-leading real estate offering, with an international multidisciplinary team of lawyers that can serve client needs globally across the real estate sector. The firm has more than 750 real estate lawyers operating in more than 40 countries around the world, serving clients in key real estate markets, with strongly established teams in the Americas, Europe, the Middle East, Africa and Asia Pacific. DLA Piper works with clients through all stages of the real estate life cycle, including planning, acquiring, finding, developing, leasing, completing, trading and divesting. Working through this cycle, it offers the following services: financing, acquisitions and disposals, asset management, construction, cross-border investment, development, fund formation, joint ventures, leasing, litigation, planning, zoning and environmental issues, public-private partnerships, REITs, restructuring and tax. The team works alongside investors, lenders and developers on every aspect of their real estate activities. The firm would like to thank Paul McViety for his contribution to this chapter.

Compare law and practice by selecting locations and topic(s)


Select Topic(s)

loading ...

Please select at least one chapter and one topic to use the compare functionality.