Buying Investment Property in the UAE – New Rules to be introduced regarding Auctions and Residency

If anyone is starting to get confused over what is or is not allowed in the UAE and Dubai, fear not – another set of rules are on the way.

The Dubai Land Department has just announced that it will be issuing public property auctioning licences to private companies in an attempt to dispose of the stunning amount of property for sale in Dubai at the moment. Mr. Mohammed Sultan Al Thani, Assistant Director-General of the DLD said, “We have started giving licenses for public property auctioning to private companies. However, they need to meet all the rules and regulations stipulated by the department in order to conduct an auction.”

For the first time, repossessions in Dubai are starting to happen and according to the recently introduced Law no 14, Article 26, “If the mortgagor or debtor fails to pay the mortgage within a period specified, the execution judge shall, upon request of the mortgagee or the creditor, give order for the mortgaged property to be sold in a public auction.”

There is even talk of allowing people to hold online auctions, although we heavily suggest making sure that whoever is doing the selling is properly licensed and has title to the property. Not sure the time is right to get back into Dubai as an investment because there is yet another proposal on the table regarding ex-pats’ length of stay. Despite all the talk, it is still required for any ex-pats who find themselves unemployed to get out of the country within 30 days, but the latest news is that the Abu Dhabi government are considering a cap on the unbroken length for which a resident may stay in the United Arab Emirates. According to the Khaleej Times:

A  senior ministry official said on Wednesday that the ministry is considering a number of proposals in this regard. Therefore, it is early to say what the permissible period of unbroken stay might be. Further, the cap might not be the same for every class of professional.

The acting Director-General of Naturalization and Residency, Brigadier Nasser Al Menhali, said the cap would take into account the expatriates’ profession: for instance, the highly skilled and in-demand professionals might be granted a longer stay.

“A ceiling of years will be worked out. Reaching that ceiling, the foreigner will not have his residency renewed. He should cancel it and leave the country,” Al Menhali said. “The ministry is studying a number of proposals and has not yet set the residency visa term.”

Al Menhali added, “He can (however) return to the country on a new visa without calculating the years of his former stay into the new one.”

A residency cap for expatriate workers was first proposed among Gulf Cooperation Council countries in 2007. It was suggested that unskilled workers be restricted to a stay of six years to curb a population imbalance.

While the council decided against the cap, the UAE has pressed ahead with a committee formed to investigate whether a residency cap could solve the issue of national demographics.

”The MoI is considering several proposals in a bid to arrive at the final amendments to the immigration law which fit the higher interest of the state,” Al Menhali told Khaleej Times.

The Federal National Council’s Committee of Interior and Defence Affairs, which includes Ministry of Interior officials, has developed a number of proposals, including one that says the residency period workers be made renewable every six years.

Ahmed Shabibb Al Dhaheri, Deputy Speaker of the FNC, in a Khaleej Times report of May 2008, said the recommendations would require the expatriate to leave the country after the period and return again with a new contract and residency visa.

In recent days, ministry officials have told Khaleej Times that another proposal sets the cap at 10 years.

Best to wait and see is our feeling.