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Whilst its neighbouring emirate of Dubai has had its freehold law in place for some time, there still exists some confusion over the state of AD property law. This article intends to give an overview – though not a wholly exhaustive account – of the current state of play.

As things stand, GCC nationals and foreigners have been granted property rights in Abu Dhabi, as per amendments to the existing laws issued by President His Highness Shaikh Khalifa Bin Zayed Al Nahyan, Ruler of Abu Dhabi.

”According to article 3 in the new law, GCC citizens may own properties, provided that the property is located within the precinct of investment areas. However, they shall have the right to dispose and arrange any original or collateral right over any of those properties.

”The regulations shall define terms and conditions as well as tenures of surface contracts for properties lying outside investment areas.

”According to Article 4, Non-UAE nationals have the right to own surface property in investment areas. Surface property refers to that property built on land. Thus, the non-nationals can own the property, but not the land on which it is built.

”Ownership will be executed through a long-term contract of 99 years or by virtue of long-term surface leasing contract of 50 years renewable by mutual consent.

”The Executive Council shall issue a decree on the by-laws regarding investment areas and means of providing services in a way that would not contravene this new law.

”Those with the right to benefit from the property or the surface for a period of over 10 years, without the permission of the landlord, may do as they wish with it, including mortgaging it, but the owner cannot mortgage it without the permission of the lessee or the surface.

”The by-laws shall stipulate the conditions, rules and period of the contract agreements for the use of the property or surface located inside and outside the investment areas.

”Article 3 of the new law abrogates all other laws that contravene it.”

This is all a rather long-winded way of saying that for non GCC nationals – i.e. for the majority of us (and certainly UK citizens) property can only be purchased on a 99 year lease in a specified investment zone. Practically speaking this is less onerous than it sounds: the only areas one would wish to invest in would be the investment zones.

Also, the fact that the properties are leasehold should not really be seen in a negative light. One must remember that this is still a relatively fledgling industry for the Middle East, and it is taking time to establish itself. With Dubai having led the way, Abu Dhabi is likely to follow suit and introduce freehold legislation, commuting all leaseholders to freeholders overnight. However, it must be stressed that this is supposition on the part of the author, and categorically NOT a fait accompli.

When considering the purchase of freehold in AD, it is necessary to view the city in what would amount to a new light for some people. In other words, this is no longer a third world backwater, but is instead a rapidly expanding World city – along the lines of Singapore, Hong Kong, or even (in some respects) London. There are few people who shy away from London investments because they are freehold, and it has done little to dampen enthusiasm for that saturated, overpriced market.