RERA Dubai Real Estate Law & Fundamentals 2 — Questions and Answers
Question 1: Under Law No. 7 of 2006, what is a 'Usufruct' right in Dubai real estate?
- The right to use and benefit from a property owned by another for a defined period (up to 99 years) (Correct answer)
- Outright ownership of property and land
- The right to build on land owned by another party
- A mortgage or financial lien against a property
Correct answer: The right to use and benefit from a property owned by another for a defined period (up to 99 years)
Usufruct (Haq al-Intifa) is a recognized real property right in Dubai allowing the holder to use and derive benefits from a property for a period not exceeding 99 years, without owning the underlying land. It is registrable at DLD and appears on the title deed.
Question 2: What is a 'Musataha' right under Dubai real estate law?
- The right to build on and use another's land for a period not exceeding 50 years (renewable once) (Correct answer)
- Outright ownership with unlimited duration
- Leasehold right for residential purposes only
- A commercial sublease agreement
Correct answer: The right to build on and use another's land for a period not exceeding 50 years (renewable once)
Musataha (Surface Right) allows the holder to build on, use, and exploit another's land for a period of up to 50 years (extendable by agreement). It is registrable at DLD and used primarily for development projects. It differs from usufruct in that it includes the right to build.
Question 3: Which areas of Dubai are designated for foreign (non-GCC) freehold property ownership?
- Areas designated by decree including Dubai Marina, Palm Jumeirah, Downtown Dubai, Business Bay, Arabian Ranches (Correct answer)
- All areas of Dubai without restriction
- Only areas within the Dubai International Financial Centre (DIFC)
- Only commercial zones, not residential areas
Correct answer: Areas designated by decree including Dubai Marina, Palm Jumeirah, Downtown Dubai, Business Bay, Arabian Ranches
The Dubai Ruler designates specific areas for foreign freehold ownership. Current designated areas include Dubai Marina, Palm Jumeirah, JBR, Downtown Dubai, Business Bay, Arabian Ranches, DIFC, Jumeirah Lakes Towers, Dubai Sports City, and others. The list is updated periodically.
Question 4: What is the difference between 'off-plan' and 'ready' properties in Dubai?
- Off-plan properties are sold before construction completion; ready properties have a completion certificate (Correct answer)
- Off-plan properties are in secondary market; ready properties are newly built
- Off-plan refers to commercial; ready refers to residential properties
- Off-plan properties are freehold; ready properties are always leasehold
Correct answer: Off-plan properties are sold before construction completion; ready properties have a completion certificate
Off-plan properties are sold by developers before or during construction, typically at lower prices with staged payment plans. Ready (completed) properties have a completion certificate and can be transferred immediately to the buyer. Both types are regulated, but off-plan has additional RERA protections.
Question 5: Which document in Dubai proves that a property has no outstanding financial obligations to the developer or service charges?
- No Objection Certificate (NOC) from the developer or owners association (Correct answer)
- Title deed from DLD
- Ejari certificate
- Sales and purchase agreement
Correct answer: No Objection Certificate (NOC) from the developer or owners association
An NOC (No Objection Certificate) is issued by the developer or owners association confirming that all outstanding service charges, mortgage, and other obligations have been cleared. The DLD requires an NOC before registering any property transfer to ensure the property is free of encumbrances.
Question 6: A property in Dubai was purchased for AED 2,000,000. What is the standard DLD transfer fee?
- 4% of the property value (AED 80,000) (Correct answer)
- 2% of the property value
- 1% of the property value
- AED 10,000 flat fee regardless of value
Correct answer: 4% of the property value (AED 80,000)
The Dubai Land Department charges a 4% transfer fee on the purchase price of a property. This fee is typically split equally between buyer and seller (2% each), though negotiation may alter the split. An AED 40 knowledge fee and AED 10 innovation fee are also payable per party.
RERA Dubai Real Estate Law & Fundamentals 2
Under Law No. 7 of 2006, what is a 'Usufruct' right in Dubai real estate?