GCC–wide ‘compulsory registration of title’ law needed
Legal experts say this will boost property development
Leading legal experts in real estate have called for laws in each Gulf state that guarantee full freehold property rights to foreign or non-GCC national owners.
Gulf property markets are expanding essentially unabated. Both developers and buyers are placing increasing demands on regional governments to put in place legal frameworks in which both parties can transact confidently, say legal experts.
Proper legal structures are the foundation for any substantial progress in the sector, and deciding what country-specific legislation and regulation is required may mean the difference between success and failure in the industry, they point out.
“A few GCC states are becoming quite active in enacting land laws which favour non-GCC nationals, most notably Qatar. But there is certainly demand among other countries for similar national laws to be put in place,” says Lisa Dale, partner and head of property department at Al Tamimi & Company, a UAE-based legal firm.
“What is important, I think, is for a common understanding within the various national governments and the real estate industry of the relevant issues, possible solutions, and the steps required to progress from this point to a fully developed land law system,” she adds.
But strong investor sentiment is paramount to the continued growth of the GCC’s property development sector, which means that buyers must also be comfortable with the legal structures that are afforded them in the regional markets.
“Most GCC laws do not support non-GCC national freehold ownership of property, and this situation presents huge risks for our clients. We don’t ever discourage clients from investing in property, but we do have a professional obligation to make them aware of their risks,” says Stephen Ballantine, legal consultant with Dubai-based Galadari & Associates.
One suggestion that has been put forward by several legal professionals is a GCC-wide introduction of a “compulsory registration of title” law that would not only remove ambiguity as to whether non-GCC nationals can own freehold property, but also assist financial institutions in the lending process.
“Until the GCC collectively puts in place clear and unequivocal legislation, the property sector will remain only a marketplace and fail to become an established market,” adds Ballantine.
Issues raised by Dale and Ballantine will be discussed during Cityscape, which will take place in Dubai from 29th November to 1st December. The event has attracted top architects, international and regional property investment and development experts, and urban planners from the US, Europe, the Middle East, and Far East.