ADGM publishes a consultation paper on changing property regulations

Abu Dhabi Global Market (ADGM) has published a consultation paper to gather views on its proposals for a comprehensive modernization of the real estate regulatory framework.

This change in regulations responds to market needs and ensures that the authority will adapt to changes in the market.

The authority requested comments on the following issues:

• The 2015 changes to the Property Regulations focused on protecting tenants in short-term residential tenancies
• Introduction of a new framework for the registration of off-plan development projects, off-plan sales and project accounts
• Introducing a framework for the registration of off-plan and property professionals, such as brokers, appraisers and property managers, who provide services within the ADGM jurisdiction.

The consultation paper can be submitted until June 19, 2024.

Lease rental

One of the proposed changes concerns short-term rentals.

The proposed changes require a short-term residential tenancy agreement to include a description of the property to be let in order to be registered with the registrar; identification of the landlord and tenant (including addresses, contact details, nationality and license numbers, if applicable); a description of the term, any renewal term, start date and any renewal, purchase or extension options (such as rights of first offer or refusal); and a condition report specifying the current technical condition and condition of the property, which must be countersigned by the tenant upon handing over the property.

The authority also presented changes regarding, among others: deposit, rent, landlord’s right of entry.

Transfer to Al Reem Island

Another key fix concerns the transition to Al Reem Island.

“Due to ADGM’s geographical expansion to Al Reem Island, in accordance with the UAE Cabinet Resolution No. 41 of 2023, the Real Estate Regulations 2015 require changes to fill legal gaps, which will include, among others: protection of landlords and tenants under short-term residential tenancies and the transitional arrangements for Al Reem Island,” ADGM said in its consultation paper.

“Under the proposed amendments, the registrar will register all musataha and occupancy of properties located on Al Reem Island and registered with the Abu Dhabi Real Estate Registry before January 1, 2025 as lease agreements under the terms of “lease agreements.” If a registration fee has previously been paid to Abu Dhabi Municipality in connection with the registration of any musataha or use rights, the Registrar will use reasonable endeavors to ensure that any subsequent registration by the Registrar will not be subject to an additional fee.” – ADGM stated.

“Unless the parties elect to convert the legal form of the underlying instrument from musataha or use to leasing, registration by the registrar will not affect the contractual rights of such musataha or use,” the article added.

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