Sharjah's new law clarifies registration rules

Dubai : Sharjah's newly issued Law No (5) for 2010 has gone a long way in clarifying the real estate registration regime in the emirate, according to market observers.

"In terms of property registration, any improvement in the structural and procedural format is obviously seen to be a positive outcome as it will help to improve transparency levels in the market," said Matthew Green, head of research and consultancy UAE at CB Richard Ellis.

The law outlines in detail the procedure for registration at the Department of Property Registration in Sharjah as well as authorised branches. "The clarification on the law will also help to alleviate any uncertainties that existed around the process," Green said.

Once the land — or property — is registered, title deeds will be issued to owners on receipt of official fees levied for the various transactions by the Department.

"There are different fees for the various transactions, whether someone wants to divide his land, register several floors by different owners, inheritance and so on," Khalid Bin Khadim, external co-ordinator and marketing at the Sharjah Economic Development Department (SEDD) told Gulf News.

Fixed fee

A fixed fee of two per cent will apply for the title deed. After everyone has signed off on the necessary documents, the owner should get his official paper within ten days, Bin Khadim said. "We will simplify the process even further within the coming months and take it online."

Real estate registration has been an on-going practice since the 1980s, and all properties should have been registered, added Khadim.

"People are afraid to buy and sell due to what happened in the market in the UAE and the world," Khadim said. "Especially those who bought involving banks in transactions had issues because land or property lost value during the crisis.

"But these people are not in the field anymore and only cash buyers are left."

The law offers an additional sense of security. However, all real estate transactions carried out before the law was issued remain valid.

Transfer of property ownership will not be legal unless the bill of ownership is valid and registered in accordance with the provisions of the law.

Solid framework

Some may see the law as a positive step towards creating a more solid framework for real estate transaction in the emirate, Ehsan Kharouf, director Cluttons — Sharjah, told Gulf News.

"The creation of the new body — the ownership verification committee — should further improve existing procedures by creating a single point of contact for real estate registrations," Kharouf said.

The law has furthermore limited the right to own real estate in the emirate to UAE nationals and GCC nationals, as well as corporate bodies owned by them.

"The new law would appear to reiterate the long held position of the government of Sharjah regarding foreign ownership in the emirate," Kharouf said. "There will be disappointment in some quarters, particularly developers hoping to increase their potential markets."

Furthermore, the law appears to make all sales to non-GCC nationals legally questionable, and it is not clear what recourse, if any, ineligible buyers will have to rectify this issue, he added. The law makes no mention of leasehold ownership for non-GCC nationals. Kharouf wonders whether it has put a stop to buyers outside the GCC being able to legally purchase properties in their own names. "This could then have a negative effect on sales values," he said.