Ajman Freehold Property Law

Ajman had announced a new committee to settle disputes between developers and investors. The committee takes up issues pertaining to cheques involved in real estate transactions. Apart from resolving investor-developer disputes, the committee takes up issues pertaining to post-dated cheque issues and more such cases pertaining to property sector. ARRA is working with Ruler's Court of Ajman based on a decree to establish a 'bounced cheque committee'. This follows the initiative by Dubai, wherein a similar committee was established on the directions of Dubai's Ruler. Ajman has several cases of off-plan property purchasers, wherein developers were given post-dated cheques. When the purchasers bought property off-plan and gave post-dated cheques, the purchasers have failed to honour these cheques, either because the developer has not progressed with construction, or due to financial constraints faced by the purchasers. The developer then files a complaint and in several instances, the purchasers have either left the country or are facing criminal prosecution. In 2008, His Highness Shaikh Humaid Bin Rashid Al Nuaimi, Member of the Supreme Council and Ruler of Ajman, issued Amiri Decree No 7 and 8, 2008, to regulate Ajman's realty sector."Apart from GCC nationals, other expatriates could obtain property on a freehold as well as 50-year leasehold basis which is renewable in areas designated by the Ruler," the law says. The decree has 34 articles that legalise freehold ownership of real estate for UAE and GCC citizens and companies wholly owned by them as well as to the public stock companies. Billions of dollars have been ploughed into Ajman's real estate sector, where prices have escalated from Dh350 per square foot to nearly Dh500 during the last six months. The 34 articles in the decree legalizes freehold ownership of property and land for UAE and GCC citizens, and the companies wholly owned by them, as well as to the public stock companies. GCC buyers and developers also have the right to own land and properties on freehold basis or on 50-year leasehold basis, renewable in designated areas to be determined and approved by the Ajman Ruler. The law designates the Department of Land and Property to regulate the sector, and the department is entirely responsible for registration of property rights and long-term leasing contracts. The bank guarantees need to be deposited for those wishing to invest in Ajman, and that amount should be used only for the project. An amount of five percent of project value will be frozen and will not be released until completion of construction of the project. The Law stipulates that a developer cannot advertise projects without written approval from the department. The developers will be responsible for maintaining the project for ten years, following handover. The law mandates a fine of Dh.100,000 on those who practice real estate business in the emirate without license.

Ajman under the aegis of His Highness Sheikh Humaid Bin Rashid Al Nuaimi, Ruler of Ajman and member of the Supreme Council, opened up its freehold property sector to foreign nationals in 2004 and became the 2nd UAE emirate to do so. Ajman property law is regulated under Decrees No 7 and 8, 2008 which were put in place to regulate the property and land sector within the Emirate of Ajman. The regulation consists of 34 articles which set out to legalize the process of Ajman property and land.

Property buyers in Ajman to get residence VISA

The UAE government is planning new laws regarding the issue of freehold property visas linked to foreigners' ownership of properties in different emirates. Dubai Government created the Advisory Council to assess the impact of the global financial crisis on Dubai's economy, which has been hit due to an outflow of capital, estimated to be well above Dh200 billion ($54.4 billion). The freehold visa issue has come to light in recent months when major master developers Nakheel and Emaar - who have been helping foreign buyers of freehold properties to get three-year renewable residence visas - had stopped facilitating them last year, prompting investor outcry. Dubai's master-developers have, since 2002, been pledging "freehold visas" to attract foreign investors to the emirate's real estate sector, in the absence of a proper rule to dictate this. Since then, they have facilitated this to lots of buyers having a special arrangement with the Dubai Naturalisation and Residency department. Subsequently, a number of master-developers in Ajman and Ras Al Khaimah followed suit, attracting massive investment into their real estate sector. Abu Dhabi allows foreigner to own what it calls "surface property" and not the land on designated areas. However, there is no federal law to regulate the freehold property market and visa issuance linked to property ownership to foreigners. As per the UAE constitution, land of each emirate belongs to Rulers and they decide the ownership, usage and allocation of the land.

Freehold Specifics

Non-GCC (Gulf Cooperation Council) investors, home buyers and property developers are all allowed to own land and property on a freehold basis within specific areas of Ajman. These areas have been allocated and approved by the Sheikh. It is also possible to obtain property on a 50-year lease that is renewable, in other designated areas of Ajman. Registration within the Ajman property register is essential to ensure that your property investment in Ajman is safe, secure and it will be possible to pass the property on to your successors through a will. The regulation and approval of land maps, fees, survey areas and property sectors are undertaken by The Department of Land and Property according the new law. It is also where you should register your property rights and long-term leasing contracts.

Investor securities

To buy property in Ajman is now very straightforward, as Ajman has modified Dubai’s Law No. 8 of 2007 on Guarantee Accounts of Real Estate Development (Escrow Account or Trust Law). It ensures that Ajman property purchases can now be conducted easily and without any major problems. The introduction of bank guarantees has helped to safeguard the investor’s capital; showing that Ajman has certainly streamlined the buying and investment process for property in the Emirate. This is always a factor considered by both private and institutional property investors. The law means that property developers have to spend client’s funds ONLY on that development for which they are supposed to be for and the money cannot be used for anything else. This is a very nice addition to the security of investment into Ajman properties. The bank will also hold back and essentially freeze 5% of the total project funds until completion of the building. After handover to the new owner, the developers themselves will be responsible for the maintenance of the building for the next 10 years.