Dubai: Even as overseas and expat buyers look to snap up property in the UAE in the here and now, they would do well to prepare for the hereafter. The issue of how the real estate assets held by an individual is passed on through inheritance is still shrouded.
“There is a great degree of confusion when it comes to the applicable law concerning inheritance,” said Shahram Safai, real estate partner at the law firm of Afridi & Angell. It stems from Article 17(1) of the UAE Civil Code clearly specifying “Inheritance shall be governed by the law of the deceased at the time of his death”.
“This would imply that the law of the deceased’s state of domicile would apply,” Safai added. However, Article 17(5) of the UAE Civil Code states: “The law of the United Arab Emirates shall apply to wills made by aliens disposing of their real property located in the State”.
These are not the only regulations that could come into play on an inheritance.
Article 1(2) of Federal Law Number 28 of 2005 (‘the Personal Status Law’) provides: “The provisions of this Law shall apply on citizens of the United Arab Emirates State unless non-Muslims among them have special provisions applicable to their community of confession. They shall equally apply to non-citizens unless one of them asks for the application of his law.”
“The above-quoted provision would imply that foreigners are required to positively assert the law of their state of domicile in order to avoid the application of the Personal Status Law,” said Safai.
But this provision could, hypothetically, be countered by another piece of law. Article 27 of the UAE Civil Code allows for a court’s discretion to refuse to apply a provision of foreign law if it is in conflict with the Sharia.
“It is, therefore, uncertain which substantive provisions of law a court in the UAE will apply with respect to a foreigner’s assets in the UAE,” said Safai.
Given the opacity, what should a prospective property owner keep in mind? “Firstly, where possible have a will written and attested in the UAE,” said Mario Volpi, head of residential sales and leasing at Cluttons.
“Secondly, make sure there is a will in place in the country of origin to specifically include your UAE property. Thirdly, make sure your will has been attested under UAE law.
“The person who inherits your UAE property may not be the person you would have intended it to be. Under UAE property rights, the law presumes the property is passed to the next male relative.”
For an ironclad bequeath, Volpi reckons investors would do well to “seek advice from a registered solicitor.”