It was issued by Mohammed bin Rashid with the aim of controlling the exploitation of commercial lands and stimulating investment in the real estate sector
Decree Regulating the Granting of Musataha Right on Commercial Lands in Dubai
Dubai Land Department is concerned with setting standards and rules that ensure optimal use of commercial lands approved for granting a Musataha right.
Photography: Ahmed Ardeti
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His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, in his capacity as Ruler of the Emirate of Dubai, issued Decree No. 23 of 2022 regulating the granting of the right of Musataha on commercial lands in the Emirate of Dubai, with the aim of regulating the process of exploiting commercial lands in the Emirate. By granting the right of musataha over it, controlling the exploitation of commercial lands that the owner wishes to develop, and establishing real estate projects on them, as well as stimulating and advancing investment in the real estate sector in the emirate, in a way that preserves the emirate’s global position in investing in the real estate sector, and providing promising investment opportunities and financial returns for investors in real estate sector.
Musataha right
A musataha right is a right in rem that gives its owner the right to erect a building or plantation on the land of others, for a specified period, and this period may be renewed by agreement between the owner of the commercial land and the investor enjoying this right.
Decree No. (23) of 2022 stipulated that the term of the Musataha right shall not exceed (35) years, and this period may be extended with the consent of the owner, provided that its total period shall not exceed (50) years.
Renewal terms
The decree specifies the conditions for renewing the Musataha right, so that it takes effect from the date of its registration in the register, kept with the Land Department, or the Dubai International Financial Center, as the case may be, and it remains in effect for the period specified in the Musataha contract, unless its term expires or the two parties agree to terminate it.
The decree also obligated the musataha that if he wishes to renew the Musataha right, he must submit an application for renewal to the owner at least two years before the date specified for the expiry of the term of the Musataha right, unless the parties agree otherwise.
The decree required musataha to register the musataha right in the registry, with the Land Department or the Dubai International Financial Center, as the case may be, in which musataha rights and contracts concluded in respect of them, and other legal transactions that take place on commercial land, are established.
Functions of the Land Department
The decree defined the duties and powers of the Dubai Land Department in this regard, including: approving the conditions and controls necessary for the exploitation of commercial lands through the Musataha right, and defining the commercial lands on which the Musataha right is granted in coordination with the relevant government agencies, and submitting them to His Highness the Ruler of Dubai or his authorized representative. for adoption.
The decree entrusted the department with setting standards and rules that ensure optimal use of commercial lands on which the Musataha right is approved to ensure their proper use, as well as follow-up and supervision of the implementation of real estate projects built on commercial lands.
Control and inspection
The Dubai Land Department, as stipulated in the decree, has the powers to monitor and inspect commercial lands on which the Musataha right has been granted in coordination with the Dubai Municipality, to verify the extent to which the musataha and contract parties comply with the terms, controls and provisions stipulated in this Decree, the decisions issued pursuant to it, and the applicable legislation. in the Emirate of Dubai, and take the necessary measures in this regard.
The decree also obligated the Dubai Land Department to consider and decide on the complaints and grievances submitted to it by the parties to the contract and work to settle them amicably and take the necessary decisions in their regard.
Musatah obligations
The decree stipulated that musataha adhere to the legislation in force in Dubai, including the provisions of the musataha contract, the exploitation of commercial land in accordance with the purpose specified in the contract concluded between the owner and the musataha, the completion of facilities and buildings on the commercial land subject of the contract on the specified dates, as well as the issuance of a certificate of completion within (5) Five years from the date of entering the Musataha right in the registry, as well as paying the fees prescribed for the registration of the Musataha contract.
The decree also stipulated that musatahas be obligated not to change the use of the commercial land subject of the Musataha right until after obtaining the prior approval of the owner and the concerned authorities in the emirate, as well as not to dispose of the Musataha right in any kind of legal disposal, except for the mortgage, except after the issuance of the certificate of completion.
The decree also obligated the musataha to refrain from any action that would harm the owner, or affect the exploitation of commercial land after the termination of the musataha right.
Mortgage of the Musataha Right
The law stipulates that a special register shall be established in the Dubai Land Department, in which rights, contracts and actions arising from a Musataha right shall be registered in accordance with the provisions of this decree.
And it authorized the Musataha right to mortgage the Musataha right as an insurance mortgage in accordance with the provisions of Law No. (14) of 2008 regarding the insurance mortgage in the Emirate of Dubai, provided that the prior written consent of the owner and the Dubai Land Department is obtained.
The provisions of Decree No. (31) of 2016 regarding the mortgage of granted lands in the Emirate of Dubai shall also apply to the mortgage of the Musataha right, in a manner that does not conflict with the nature of the Musataha right.
Ownership of buildings and facilities
The decree stipulates that a musataha owner shall own, during the term of the Musataha right, the buildings or establishments he created in commercial land, and his ownership is determined by the term of the Musataha right and the purpose for which the buildings and facilities were prepared, and he may dispose of the building and commercial facilities associated with the issuance of a legal certificate for all types of land associated with the land The completion, which was defined by the decree as the document issued by the Dubai Municipality or the competent licensing authority, stating that the completion of the real estate project has been finalized, and in a manner that does not conflict with the rights of the owner.
The decree allowed the musataha the right to dispose of the real estate unit prior to the issuance of the completion certificate, provided that the ownership of buildings and facilities erected on commercial land after the expiry of the term of the musataha right to the owner of the commercial land, unless the parties to the musataha contract agree otherwise.
Delay penalty
The decree stipulated that if more than five years have passed since the construction of the real estate project on commercial land from the date of entering the Musataha right in the registry, and the Musataha was unable to issue a certificate of completion for the failure to complete the construction of the real estate project, a delay fine equal to (1%) shall be imposed on the Musataha. From the market value of the commercial land for each year in excess of that period until the issuance of the completion certificate, or the expiration of the Musataha right.
Musatah is exempted from paying this fine if the delay in completing the real estate project is due to reasons beyond his control, emergency circumstances or force majeure, and the assessment of these reasons is due to the Dubai Land Department.
Expiry and transfer of the Musataha right
The decree specifies the cases in which a Musataha right must expire, including: the expiry of the term of a Musataha right and its non-renewal, the agreement of the parties to a Musataha contract to terminate it before the expiry of its term, the issuance of a final judgment from the competent court to terminate a Musataha right, the union of owner and musataha attributes, as well as the delay of three years of Musataha For the issuance of a certificate of completion if more than five years have passed since the construction of the real estate project on commercial land from the date of entering the Musataha right in the registry, and the Musataha was unable to issue a completion certificate for not completing the construction of the real estate project.
The decree also stipulated that the Musataha right does not expire with the demise of buildings or facilities erected on commercial land before the expiration of the term of the Musataha right, and the Musataha right may exploit commercial land during the remaining period of the Musataha right period with any kind of legal disposal.
The decree also specified cases of transfer of the right of Musataha, so that the right of Musataha passes after the death of the Musataha to his legal heirs in accordance with the legal media, and in accordance with the controls set by the Dubai Land Department in this regard.
The right of musataha may be transferred to the musataha by will.
certificate of achievement
The decree allowed Dubai Municipality or the competent licensing authority to issue a completion certificate for a real estate project after its final completion, so that the legal actions concluded are valid during the term of the Musataha right, provided that these disposals end at the end of this period, unless the parties to the Musataha contract agree otherwise.
Sale, mortgage and assignment
A musataha may not dispose of by sale, mortgage, or assignment of the ownership of the institutions or companies that have been granted the Musataha right, or any share therein, except after obtaining the prior approval of the owner and the Dubai Land Department and in coordination with the competent authority for commercial licensing.
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