Standard Musataha Agreement

In this article, we will evaluate the various laws on usufruit rights (including rental rights), focusing on Dubai and Abu Dhabi. Next, we will focus on musataha rights according to the laws of the United Arab Emirates, Dubai, Abu Dhabi and Dubai Free Zones. The cost of a Musataha contract in Abu Dhabi is 2% of the total annual rent. The fee is normally paid by the holder of the Musataha Law, unless otherwise agreed. The owner of Musataha can obtain funding under Article 1355 of the Civil Code against his Musataha right. The cessation of Musataha comes at the end of the musataha period agreed between the parties. A bit like on the usufruit, when the owner musataha buys the rented land, the Musataha will end. Unless otherwise agreed, the delay in payment of the Musataha holder for a period of two years is also considered a reason for termination. Long-term leases and usufruit rights up to age 99 are identified as real estate rights, in accordance with Abu Dhabi Real Estate Ownership Ownership law. Long-term leases are defined as leases of 25 years or more. In accordance with Article 4 of Abu Dhabi Real Estate Ownership Ownership, foreigners, residents and non-residents have the right to enjoy these property rights and the Registrar has registered these owners in the property register.

Foreigners and GCC residents can only benefit from these property rights in certain investment areas. All real estate rights, including usufruit, long-rental and musataha rights (explained in more detail below), are subject to listing in the real estate register, although few registrations have been registered in practice in investment areas open to foreigners and GCC residents. The UAE Civil Code is provided for the different types of real property rights that exist in the UAE, part for long term leases that are found in other laws as described below. Any real estate right is clear and confers a number of powers on the holder of such a right, including direct ownership. The right of ownership is the highest, eternal right in nature, while the others (musataha, usufruit and residence and residence rights) are more restrictive. The owner of a Musataha right owns the buildings they have developed on the land and these buildings can be disposed of under the Musataha law, in accordance with Article 1357 of the Civil Code. Article 1359 of the Civil Code provides that Musataha`s law does not end simply because the buildings on the land were removed before the expiration of the Musataha Convention. “Dubai Law No. 14 of 2008 on mortgages in the Emirates of Dubai` (“Mortgage Law”) allows a borrower to obtain mortgages from a registered bank of VAE Central Bank to acquire real estate registered with the Dubai State Department. Article 21 of the Mortgage Act allows a Musataha holder to pawn the plant or plants during the life of the Musataha, without having the right to mortgage the land to be developed, unless otherwise agreed between the parties supported by Article 1356 of the Civil Code.

Similarly, section 22 of the Mortgage Act allows the holder of a usufruit or long-term lease, for a period of between 10 and 99 years, to mortgage his real estate interests during the term of the contract. Usufructs and Musatahas are investment interests that allow exploitation, development or occupation. Nationals of non-MEMBER countries may only hold these shares within the designated investment areas, provided the deadlines apply. A standard form of the musataha agreement has been introduced for use in Abu Dhabi for state ownership. In addition to the entire property, it is possible to hold property with other parties, even if this is not the case where the parties are not related to each other. In addition, rental interest may be purchased and transferred in the same way as property units, subject to possible restrictions on the lease.

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