Everything to Know About the Musataha Agreement in Abu Dhabi
There are three types of land ownership in Abu Dhabi: Free ownership Usufruct Musataha In this article, we will discuss the various features, terms, and benefits of Musataha.
What Is the Musataha Contract?
Musataha contracts are a type of land ownership agreement that allows the holder of the contract to rent a plot of land owned by the government. The contract gives the investor or property developer the right to construct or expand on the land over a 10 to 50-year period.
What is the purpose of Musataha contracts?
Musataha contracts were introduced in the UAE to encourage investors to invest in real estate projects for more stable and secure reasons.
What are the advantages of a Musatah agreement?
Musataha agreements typically give you more rights, flexibility, and peace of mind. This is especially important if you’re looking to invest in long-term, large-scale real estate developments. In a Musatah contract, you give the landowner the right to build a building, change the property, invest in, mortgage or lease, sell or purchase a third party’s plot of land for a set amount of time (up to 50 years). After the set amount of time, the right can be renewed once by mutual agreement for a further 50 years.
What does this mean for expats?
Property ownership laws of foreign nationals vary from emirate to emirate. The Musataha agreement is a standard form of the contract for use in Abu Dhabi for state-owned property. UAE nationals are allowed to hold the Musataha contract only in Abu Dhabi. A Musataha contract can only be held by UAE expats (and their companies) in the designated investment areas without the right of land ownership. The term of the contract cannot exceed 50 years.
What is the difference between a long lease contract and a Musataha agreement?
Long lease contracts are the most common land agreements in Abu Dhabi, but there are some key differences between them. Musataha contracts have some advantages, such as the ability to mortgage the land and get a loan from a bank. In a Long Lease Contract, the owner has no ownership rights but retains the right to make improvements to the land during the term of the contract. The lessee usually pays rent to the landlord. The developer or investor may also share profits with the landlord. The agreement includes provisions for early termination and renewal. Musataha contracts are more difficult to end early and may not have a renewal clause. This does not apply to this type of contract. In the event of the owner’s death, the title to the land may be transferred to the holder’s dependents.
Can I Re-negotiate my Long Lease?
If you have a long lease, DARI also offers a service that allows you to convert your agreement from a long lease to a Musataha agreement. To do this, you would need to re-negotiate the terms regarding the terms of the contract and the rent payments. In addition, both parties would have to agree to these terms.
What are the terms and conditions for signing a Musataha contract?
The land is owned by the Abu Dhabi government. As with most contracts, you will need to determine the parties involved, what is being contracted (land in this case), what are the terms, how long will the contract last, what are the development rights and what are the termination clauses.
You should seek legal advice to know your rights and obligations. Keep in mind that only Emirati nationals can sign a contract for Musataha with the Dubai government.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.
