The Abu Dhabi Global Market (ADGM) has published a consultation paper to seek views on its proposals on the comprehensive revamp of its real property regulatory framework.
This regulatory revamp addresses market needs and ensures the authority stays aligned with market developments.
The authority has sought inputs on the following:
- Amendments to its Real Property Regulations 2015 focused on protections for tenants in short-term residential leases
- Introduction of a new framework for the registration of off-plan development projects, off-plan sales, and project accounts
- Introduction of a framework for registering off-plan and real property professionals, such as brokers, valuers and property managers, who provide services within ADGM’s jurisdiction.
The consultation paper is open for feedback until June 19, 2024.
Rental leases
One of the proposed changes pertain to short-term rental leases.
In order to be registered with the registrar, the proposed amendments require short-term residential leases to include a description of the real property to be leased; identification of the lessor and lessee (including addresses, contact details, nationalities, and licence numbers, if applicable); a description of the term, any renewal term, commencement date, and any option to renew, purchase, or expand (such as rights of first offer or refusal); and a condition report setting out the present state of repair and condition of the real property, which must be counter-signed by the lessee on handover of the real property.
The authority has also outlined amendments on security deposits, rent, lessor’s right of entry, among others.
Transition to Al Reem Island
Another key amendment refers to the transition to Al Reem Island.
“Due to ADGM’s geographical expansion into Al Reem Island, pursuant to UAE Cabinet Resolution No. 41 of 2023, the Real Property Regulations 2015 require amendments to close legislative gaps, which will include, among others, protections for lessors and lessees under short-term residential leases, and transitional provisions for Al Reem Island,” the ADGM said in its consultation paper.
“Under the proposed amendments, the registrar will register all musataha and usufruct of real property located on Al Reem Island and registered on the Abu Dhabi Real Property Register prior to January 1, 2025 as leases pursuant to “memoranda of leases”. If a registration fee was previously paid to the Municipality of Abu Dhabi in connection with the registration of any musataha or usufruct interest, the Registrar will make reasonable efforts to ensure that any subsequent registration by the Registrar will not be subject to an additional fee,” ADGM said.
“Unless the parties choose to convert the legal form of the underlying instrument from a musataha or usufruct to a lease, the contractual rights of such musataha or usufruct arrangement will not be affected due to such registration by the registrar,” the paper added.
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