United Arab Emirates

Legal and institutional framework and land registration system

Sharia law is the basis of UAE’s fundamental legal principles, however most of the country’s legislation comprises a blend of Islamic and European civil law concepts, originating from 19^th and 20^th century Egyptian legal code. While the legal system in the UAE is structured and comprehensive, it is also somewhat rigid and bureaucratic. The legal structure is complex, with both sharia and civil courts, and with each emirate maintaining its own federal court of first instance. Dubai and Ras al-Khaimah, however, have completely separate judicial frameworks.

Several sharia principles apply to business transactions, shaping the development of commercial codes in the UAE. While not directly mirrored in commercial legislation, these principles inform the drafting and interpretation of laws. These include the prohibition of usury or interest (Riba), the requirement for shared risk, the avoidance of uncertainty (Gharar) and clarity of contracts, the necessity for parties' legal capacity and consent and the prohibition of coercion or duress in contracts.

Decision-making in the UAE is centralized and tightly connected to the power structure of the country. Each of the UAE’s seven emirates is ruled by a different sheikh, who together make up the Supreme Council, which approves the appointment of the prime minister and the cabinet. The Supreme Council is the main federal authority with the power to pass federal laws, including a number of regulations related to real estate, the most relevant being the Civil Transactions Law. 

However, the UAE is a federal state where each emirate can also pass local laws. Each local government has introduced laws regarding real estate, producing a distinct regulatory framework for land management in each emirate. Emirates are also able to pass local laws establishing “free zones”, which are governed by their own rules and regulations. Each free zone constitutes a tax-exempt authority subject to its own rules and regulations, and foreign companies may own real estate within these zones [2][3]. Apart from the federal ministries, each emirate has full autonomy over its land and how it is distributed and managed. If there is a conflict between emirate and federal law, the federal law prevails.

Some federal ministries govern across the entire UAE. For example, the Ministry of Energy and Infrastructure (MoEI) has the mandate to organize, develop and enhance competitiveness in energy, mining, water resources, land and sea transportation, roads, utilities, housing, building, construction and sustainability of investment; it is also responsible for the optimal use of partnerships, technology and advanced sciences and adopting innovative global solutions to improve quality of life. Only the MoEI has a near full mandate over lands at the federal level. In general, the key stakeholders driving land policy in the UAE are the private sector, government bodies and the ruling family.

At the national level, the Emirates Real Estate Corporation (EREC) was established through federal law No.7 in 2000, with capital of AED 500 million and the overall mission to design and construct properties to meet the real estate needs of the government. Clients include a variety of government entities, ranging from ministries to federal authorities (including ministries of education, foreign affairs, human resources and infrastructure and others). There is no federal law governing real estate ownership for foreigners in the UAE.

Citizens of the UAE are also entitled to “granted land”. In the Emirate of Umm Al Quwain, Law No.1 of 2021 regarding real estate ownership indicates that citizens own the real estate they build on the lands granted to them by the government for the purposes of private housing, and that it is not permissible to dispose of the agricultural granted lands except by a decision of the ruler. While the sale or exchange of lands and residences (houses) granted to citizens in Dubai is permitted, trading in government-granted lands in Ras Al Khaimah is prohibited unless accompanied by the ruler's approval. In Abu Dhabi, transactions for granted residential and commercial lands and properties are subject to certain restrictions specified by Administrative Resolution No.289 of 2017 [3][4][5].

In 2002, HH Sheikh Mohammed Bin Rashid Al-Maktoum announced that real estate in designated areas of Dubai would become available for ownership by foreigners on a freehold basis. At the time, there were virtually no specialized laws and regulations in place to accommodate Dubai’s burgeoning real estate market. In March 2006, Law No. 7/2006 on land registration in the Emirate of Dubai was enacted, which confirmed the absolute ownership of land in Dubai by citizens of the UAE, the Gulf Cooperation Council and foreigners within the areas designated by the ruler of Dubai. A registration system was also established in the Lands and Property Administration to guarantee property rights. Following its creation in 2007, Dubai’s Real Estate Regulatory Authority (RERA) has played an increasingly public and crucial role in developing and supervising Dubai’s real estate regulatory framework and development.

In Abu Dhabi, the 2005 enactment of Law No.19 allowed property ownership for the first time. The legislative framework in the northern emirates remains in part inconsistent but is slowly developing. The real estate market in Abu Dhabi started to develop in earnest in 2005, when Law No.3 of 2005 introduced regulations regarding the registration of property, including the establishment of a Land Registration Department at Abu Dhabi and Al-Ain Municipalities. All properties must be registered with the Department of Municipal Affairs, which grants the owner a land title certificate. As of 2005, several additional laws have been issued to regulate the transfer or releasing/cancelling of property rights, selling or purchasing real estate, land ownership according to citizenship, creation of investment zones and land entitlement within these zones based on citizenship.

Article 21 of the UAE Constitution protects citizens from the general expropriation of their assets: “A person may not be deprived of his/her private property except in such circumstances as may be dictated by the public interest, in accordance with the provisions of law, and for equitable consideration”. The different expropriation laws in each emirate give government bodies the right to acquire private property only for projects in the public interest. The laws stress that fair compensation is made. Compensation is determined by the compensation committees formed with a decree by each emirate's (vice) governor [1].

Land tenure

Articles 21 and 22 of the UAE Constitution emphasize the protection of private and public properties [1]. The UAE has defined at least four types of property rights: (1) freehold, where the owner has full rights over the property; (2) usufruct, where the property can be used for a limited time and the owner can derive income from the land; (3) Musataha, also where the property can be used for a limited time, and the owner can construct buildings on it; and (4) leasehold, where the property is used for a limited period of time based on a contractual agreement. In Abu Dhabi and Dubai, land acquisition is tightly linked to and dependent on nationality: UAE citizens have no restrictions, GCC citizens are subject to some restrictions, and other nationalities face much tighter limitations. 

At the federal level, the Sheikh Zayed Housing programme, established in 1999, provides interest-free housing loans repayable over a 25-year period to citizens with low incomes. Over 14,500 Emiratis received new houses from 2000 to 2012.

Granted lands are provided by the government for different purposes. All Emirati households are entitled to land or built properties in their emirate of origin, granted to them by the state. However, it is difficult to have a clear picture of land tenure rights, ownership patterns and the process of allocating land and property to citizens across the whole of UAE, as different rules apply in different emirates. 

Land ownership as a right belongs to Emirati nationals only, which accounts for only 13 per cent of UAE’s total population, and less than 10 per cent of the population in Dubai and Abu Dhabi. While there is now an option for foreign nationals residing in the UAE to buy residential property in the form of floors of buildings and apartments, they cannot purchase land.

In Abu Dhabi, usufruct agreements with the emirate give nationals the right to use but not own land, and musataha grants the right to own floors or buildings but not the land itself. Foreigners are allocated rights to residential units for 99 years in Abu Dhabi, musataha for 50 years, usufruct for 99 years or a long-term lease of 25 years or more. The Abu Dhabi Executive Council implemented a standard form to be used for all musataha agreements made in the emirate between two or more government entities or between government entities and third parties. The private sector follows the same rules with minor deviations.

In Dubai, the Dubai Land Department is responsible for land tenure in coordination with municipalities and the Real Estate Regulatory Authority (RERA). Foreigners in Dubai may own property without restriction only in designated areas (including “free zones” such as Sports City, International City, Arabian Ranches and Palm Jumeirah). They also have usufruct and long-term lease options available to them. 

In 2006, Umm Al-Quwain allowed UAE and GCC citizens (as well as public joint stock companies) to own land within the emirate. However, similarly to Dubai and Abu Dhabi, foreigners are only allowed to own floors/flats and not land. In Sharjah, foreign nationals cannot own property but do have an option of 99-year usufruct rights. Laws applicable in Fujairah do not allow foreigners to own real estate.

In Abu Dhabi, cadastral documents are kept in GIS format at the Department of Municipal Affairs, along with land use and development plans. In Dubai cadastral documents are also kept at the Municipality of Dubai.

The cadastre holds two main types of documents: (1) the title deed certificate, which includes the owner’s name, value, area, plot number and any special conditions, and (2) a map that shows the plot boundaries and coordinates, area, owner name, community name and plot number. In addition, the cadastre holds information on type of land use, number of floors and rooms in a building, applicable development regulations, electricity and water authority approval, other infrastructure and underground services (not applicable in desert or undesignated lands) and civil defence approval if required. Urban services, however, may not be completely updated in cadastral maps, meaning that problems may arise during new construction projects.

Transfer and registration costs are based on a fixed rate related to the property or land value; in Dubai, for example, the Dubai Lands Department charges 4 per cent of the property price as a registration fee.

Land value

The Ras Al Khaimah Land Department launched an official land price index that contains complete information about the real estate transactions that take place in the emirate on a monthly basis and is registered with the department according to 9 classifications for the types of land use [5].

The real estate sector in Dubai has contributed to the emirate’s GDP growth, and the improvement in economic growth rates in the emirate in turn bolstered the recovery of the real estate sector. In 2018, the contribution of the real estate sector to the GDP of the Emirate of Dubai was 7.2 per cent [6]. The Dubai Land Department (DLD) also has a separate evaluation criterion based on its own annual index for land values per square foot GFA, in addition to private market valuation.

Taxes on rented properties vary between the Emirates. Bare land is exempt from the value added tax (VAT). When a plot of land does not meet the definition of bare land, it is considered to be commercial land (agricultural land included), and subject to VAT at 5 per cent [7]. There is, however, a 5 per cent tax on tenancy contracts and 10 per cent of commercial properties, as well as an additional municipality tax, paid at the same time as water and electricity (in Abu Dhabi, this tax is also 5 per cent of the tenancy contract and is higher for foreigners than for nationals).

Land use

The United Arab Emirates signed the Glasgow Leaders’ Declaration on Forests and Land Use in November 2021, to halt and reverse forest loss and land degradation by 2030 [8]. The Declaration is considered a significant step in delivering sustainable development and promoting inclusive rural transformation.

Systems for land use differ between emirates. In Dubai, the Planning and Survey Department of Dubai Municipality issued a list of classification and legalization of land uses, which represents an important reference document for decision-makers and stakeholders. The list includes a legislative and an executive aspect; however, the law cannot be applied to other cities due to differing economic, demographic, geographical and environmental conditions [9].

In Abu Dhabi, the Department of Urban Planning and Municipalities developed terms and standards for land use and development to provide regulations for urban development within the municipal boundaries (i.e. The Planning Code). This code aims to set development controls that adjust the city's general appearance and ensure that land use and development align with the plan, representing the city's long-term future vision. The code contains written standards, conditions and maps, showing how to apply the code to all lands and water bodies located within the urban development scope of the city, which is divided into basic areas, overlapping areas and areas of special plans [10].

Land development

The establishment and expansion of Abu Dhabi, UAE’s capital, focused on developing the city around formal plans and reducing informal planning and tenure types. The city’s development began in 1962 with the establishment of the Municipality of Abu Dhabi, with the main aim of improving living conditions. The first master plan was developed by the British architect and planner John Harris, who recommended reconstruction and integrating the old city with the new. His plan, however, was not approved, and other planners and companies (notably Halcrow) subsequently submitted proposals. Upon the ruling of Sheikh Zayed, UAE’s first president and founder, widely regarded as responsible for unifying the seven emirates into a federal state in 1971, the urban development of Abu Dhabi commenced under Halcrow’s modified plan which required eradication of the old city. To accelerate development, citizens from Abu Dhabi were granted three lots of land for residential, commercial and industrial development.

Between the 1960s and 1980s, the city of Abu Dhabi developed without a comprehensive framework. In 1988 the Executive Council decided to implement a master plan prepared by the city’s Town Planning Department with the assistance of UNDP. The plan consisted of five stages and included plans to extend development towards several surrounding islands, establish wide grid-pattern roads and high-density residential buildings and distribute state-owned land to citizens for development. The latter was executed through the Khalifa Committee, which developed the land on behalf of the citizens. These centralized plans resulted in a lack of mixed-use developments. After 2004, under UAE’s new president and ruler of Abu Dhabi Sheikh Khalifa, development accelerated with the development of Plan Abu Dhabi 2030: Urban Structure Framework Plan focusing on identity and sustainability.

The transformation of Abu Dhabi’s central market is an example of the intent to formalize the city. City officials and some residents viewed the old market as chaotic and not representative of the modern metropolis that the city officials wanted to portray. The redeveloped space is now a modern interpretation of traditional Gulf market style. 

As for Dubai, the city transformed from a simple fishing village and port into a global centre of commerce and finance. Prior to its urban development and expansion, Dubai consisted of three neighbourhoods: Deira, Bur Dubai and Shindagha. Deria represents the city’s central business district, which was further developed into a transit hub. Originally, Deira (in particular, Baniya Square) served as a hub for traders from Somaliland, India, Pakistan and Iran. This “low-end” hub provided the base for Dubai’s development. Between 1961 and 1970, the waterway within the city was deepened, docking areas were established, land was reclaimed and water features and landscaping elements were added. Later, the existing buildings surrounding the creek and Baniya Square were replaced with large complexes. The area further evolved with the construction of the Dubai Metro. In May 1960, the Dubai Land Department (DLD) was founded to promote the real estate sector at regional and international levels.

Given the need to diversify the economy of the emirate, in 2007 the Dubai Real Estate Regulatory Authority was created, which has played a crucial role in developing the regulatory framework (e.g. the escrow law). Escrow is a legal financial arrangement where a third party holds a large sum of money on behalf of both parties until the process is completed. In 2007, a law was issued in Dubai to regulate real estate developers and safeguard purchasers’ money in case of off-plan developments. The law allows authorities to preserve the rights of purchasers; however, until now they have taken limited action against non-compliant developers. Property rights and long leases are registered in DLD, but short leases are registered in the Real Estate Regulatory Authority. The strata law, issued in 2010, encourages developers to act together in a consortium and to jointly manage a neighbourhood and the buildings within it. In the same year, legislation was issued to introduce a mechanism where the holders of industrial and commercial granted lands could convert their lease into a freehold land deed, where the owner has full rights to the property for an unlimited time. In 2011, DLD issued a law prohibiting foreign companies not registered in Jebel Ali Free Zone from owning property in Dubai.

Like Dubai, the city of Sharjah also started as a small fishing village and later developed into an urban settlement in the 19^th century under British occupation. Sharjah become an important port with links to the Indian Ocean, as it formed part of a trade route that connected South and South-East Asia with the Middle East and Europe. This resulted in the development of Sharjah as a linear city along the coast, which later constructed its own fort. 

British records from the 1820s document four interconnected spaces within the city: the linear port of Sahil, the linear market, the external market outside the fort and the residential area. In 1932, the British occupation established an airport, part of the main route between India and England, serving as a regional hub. It was intended to compensate for the fact that Dubai had become the main trading port. Later, in 1953, the first school was established, attracting students from all over the country. In 1971, Sharjah joined the UAE as a founding member, and the entire country embarked on massive urban development projects funded by oil revenues. In 1972, Sharjah established its Real Estate Registration Department after issuing a property registration law. The law permitted only UAE citizens to own land, and only the Governor/Sheikh could bestow the right of landownership on people or entities of other nationalities. In 1980, further laws were issued to regulate ownership of multi-storey buildings and to introduce strata ownership. In the 1990s, following ad hoc developments and conversion of historic places into workers’ housing, the Government of Sharjah intervened and procured the property rights to historical places, restoring and reconstructing old structures. In recognition, UNESCO nominated Sharjah as the cultural capital of the Arab world. 

The initial development of Ajman, the smallest emirate and a historical pearl trading post, focused on maritime services and activities. Up until 2014, the physical development of the city was concentrated along the main arterial road connecting Ajman to Sharjah. Current urban development within Ajman is monitored by the government to ensure that settlements undergo structured development, aimed at tackling urban poverty and informal housing. Ajman University is considered the central hub for activities as it has ample infrastructure, which in turn attracts prospective developers to nearby locations. Moreover, a spillover effect from Dubai and Sharjah spurs housing growth in Ajman. In 2008, the Ajman Real Estate Regulatory Authority was established, and a decree granted UAE and Gulf Cooperation Council (GCC) citizens or entities freehold right over land. Foreigners are permitted to own land if the Governor allows it. The decree also regulates jointly owned land and requires owners or developers to register with the Ajman Land Department. Furthermore, all developers must have their master plans and infrastructure plans approved.

In Umm Al-Quwain, a law issued in 2007 requires developers to register in a Developers’ Register at the Survey and Planning Department.

Real estate investment trusts occupy a leading role in the UAE in terms of promoting the development of real estate investment trusts through the issuance of the Investment Funds Law and the Collective Investment Law No. 1 of 2006. They have become the preferred method of attracting investments in public properties in the UAE. The Real Estate Investment Fund is an entity that can invest in different types of real estate related assets. It can acquire, own, operate, develop, manage and sell real estate assets of any kind, giving investors the opportunity to acquire a portfolio of professionally managed and diversified real estate properties. One of the main benefits of real estate investment trusts is that they allow the investor to benefit from the trust’s real estate portfolio in addition to basic rental income [11].

Land dispute resolution

In UAE, the most common land disputes often involve issues such as project delays or incomplete work, ownership and boundary disagreements, rental issues, and property management conflicts [12]. Mechanisms for land dispute resolution differs in each emirate. In Dubai, there are four main mechanisms available for the resolution of land disputes [13] [14].

Negotiation and Mediation: Many disputes can be amicably resolved through direct negotiation or mediation under the guidance of the Real Estate Regulatory Agency. This method is generally quicker and helps preserve positive relationships between the parties involved.

Rental Dispute Settlement Centre (RDSC): For rental issues, the RDSC, established by the Dubai Land Department, provides an efficient process for filing complaints and resolving conflicts.

Dubai Courts: If mediation fails, the dispute can be taken to the Dubai Courts. This involves presenting the case to the Court of First Instance, with options for appeals to the Court of Appeal and then the Court of Cassation for final decisions.

Arbitration: Dubai also offers arbitration as a means of settling real estate disputes. The Dubai International Arbitration Centre and other arbitration bodies provide alternatives to the court system, often resulting in quicker and confidential resolutions.

The resolution of property disputes in Dubai is supported by a strong legal framework aimed at safeguarding the interests of all parties involved in the real estate sector.

Key documents and links

[1] United Arab Emirates Constitution. 

[2] Fujairah Municipality. 

[3] Land Department, Dubai Governorate. 

[4] Department of Municipalities and Transport, Abu Dhabi Governorate. 

[5] Ras Al Khaimah Municipality. Governorate of Ras Al Khaimah. 

[6] Land Department, Dubai Governorate: Annual Report: Real Estate Sector Performance 2019.

[7] The United Arab Emirates' Government portal (2021). Value Added Tax (VAT).

[8] FAO (2022). The State of Land and Water Resources for Food and Agriculture in the Near East and North Africa region – Synthesis report.. 

[9] Dubai Municipality. 

[10] Government of Abu Dhabi (2021). Terms and standards for land use and development in Abu Dhabi city. 

[11] Ministry of Justice, United Arab Emirates: Laws & Legislation. 

[12] Land Department, Dubai Governorate (2017). The Rental Dispute Settlement Centre: a safe gateway to the relationship between landlords and tenants. 

[13] Land Department, Dubai Governorate: Rules & Regulations.

[14] AWS Legal Group, “Navigating Property Dispute Resolution in Dubai: A Guide for Investors and Homeowners.”

[15] UN-Habitat/GLTN (2024). United Arab Emirates Land Sector: A Snapshot.