Dubai will seek to stimulate real estate investment with a new "Musataha" land decree

Sheikh Mohammed bin Rashid al-Maktoum, Vice President and Prime Minister of the United Arab Emirates, has issued a new decree on Musataha land to stimulate real estate investment through partnerships between private companies and the state.

These "Musataha" agreements will allow investors, thanks to the new law, to build, mortgage, lease, sell and buy land belonging to a third party for up to 35 years. 

With this decree, Dubai aims to stimulate the creation of new construction companies, in what would be a major step towards achieving its main goal of becoming a prime international real estate investment location.

While "Musataha" contracts are highly beneficial in stimulating real estate investment, they are subject to certain conditions with which the agreement holder must comply. These include the obligation to refrain from altering the use of the commercial property without the consent of the landowner.

Such contracts can extend for up to 50 years, although an application for renewal must be made two years before the expiry date, and the terms, conditions and obligations of the agreement must be specified by the Dubai Land Department, which may inspect the commercial land subject to the agreement to confirm that the agreement is being fully complied with.

The decree also requires the Dubai Land Department to establish a special register for "Musataha" agreements, with the primary aim that any disputes that may arise during the extension of the agreement can be resolved peacefully by the Land Department.

The new law also specifies the fines to be imposed on anyone who fails to provide the relevant certificate of completion for all projects built on commercial properties under the agreement.