All about Usufruct properties in the UAE
- Usufruct properties in the UAE
- Usufruct properties in Abu Dhabi
- Usufruct properties in Dubai
- Usufruct properties in Sharjah
Can expats and foreign investors buy property in the UAE? This is a commonly researched topic, given the exponential growth of the real estate sector. Many investors across the globe see the UAE as a potentially lucrative and attractive market. If you have been evaluating the UAE as a viable option for real estate investments and asking yourself the above question, the good news is that foreigners can own properties in most emirates. But, there are often certain conditions to the ownership, especially for leasehold properties. Similarly, if ownership rights are restricted, expats can opt for alternative options like Usufruct property and Musataha.
ALL ABOUT USUFRUCT PROPERTY
Several industries in the UAE have seen tremendous development in the past two to three decades. The real estate sector, in particular, has acquired a large share of foreign investment thanks to the launch of several exciting projects. The UAE government has introduced laws to boost investment and maintain the country’s internationally prestigious reputation. Usufruct properties ownership is one such option for foreign investors in the UAE.
BUYING USUFRUCT PROPERTY IN THE UAE
When you buy usufruct properties, it simply means you are signing a long-term lease. What’s important to note here is that all usufruct properties come with a restriction. One cannot destroy the property or turn it into an unusable space (wear and tear aside). The length of the lease for usufruct property in the UAE can range from 10 years to 99 years for residential properties and up to 50 years for commercial units. Usufruct properties can also be inherited.
Early termination of usufruct property agreement (before the contract completion date) is also possible. Destruction of the property, termination issued by the court due to misuse or waivers by usufructuary are typical reasons of early termination.
Different from the usufructuary right, buyers also need to be aware of the Musataha right. The difference is that a signatory of a Musataha agreement has the right to build, own and make use of the building during the entire eligibility term.
The rights of the usufructuary have been written in Article 1333 and 1348 of the Civil Code of the UAE. Both parties can reach an agreement and amend certain provisions written in the Civil Code. However, these changes can’t go against public policy. For all usufruct properties in the UAE, the preservation and maintenance of the property lies with the buyer, in exceptional cases such as heavy repairs is when the maintenance is the responsibility of the owner.
While the general framework for usufruct properties in the UAE remains the same, individual emirates also enforce additional rules.
USUFRUCT PROPERTY IN ABU DHABI
Abu Dhabi is an attractive place for foreigners to buy properties. Expatriates can own usufruct residential properties in Abu Dhabi for up to 99 years. Such properties and its facilities can be used during this period; however, buyers cannot make any structural changes and additions.
Only properties in the form of floors and apartments can be bought and foreign land ownership is not allowed. This form of ownership is also restricted to investment areas such as Al Reef, Saadiyat, Yas Island, Al Maryah Island, Al Reem Island, Sayh Al Sedairah, Al Raha Beach and Masdar City.
As per the law, the landlord cannot mortgage the property without the usufruct’s consent. Hence, when buying usufruct property in Abu Dhabi, your rights as a buyer will be protected.
USUFRUCT PROPERTY IN DUBAI
Compared to other emirates, foreigners have access to a wider portfolio of properties for sale in Dubai. They can buy freehold property in certain areas or usufruct property in Dubai without being in the country. These rights can be bought for up to 99 years. The title deeds are all issued by the Dubai Land Department (DLD).
USUFRUCT PROPERTY IN SHARJAH
Like Abu Dhabi and Dubai, foreigners can buy usufruct property in Sharjah for a maximum of 100 years. Any usufruct property has to be owned on a freehold basis by a licenced developer. The foreign national has to hold a valid residency of the UAE. In the case of a company, such an entity has to hold a valid commercial licence to operate in the UAE.
In Sharjah, the differentiation between usufruct and Musataha is more minor. Usufruct property in Sharjah can be altered or rebuilt as long as the allocated purpose of the property doesn’t change.
The rules for foreigners for buying UAE property are amended from time to time. If you are interested in buying a property in the UAE, keep an eye on all the changes as modifications impact market prices as well.
We have put together a list of the best freehold areas in Dubai to make your search easier. Also, check out top areas in Sharjah for foreign investment. Like any other investment decision, it is wise to do your homework before committing to a long-term arrangement.
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