The Abu Dhabi Global Market (ADGM) recently issued a consultation paper seeking opinions on how to revamp its real estate legal framework in light of the expansion of the ADGM territory to include Al Maryah Island and Al Reem Island. Comments on the consultation’s proposed regulations and amendments are due by 19 June 2024.
ADGM Expansion
The Cabinet of the Council of Ministers issued Decision No. 41/2023 (the ADGM Expansion Decision) on 24 April 2023, expanding the Abu Dhabi Global Market (ADGM) territory to include Al Maryah Island and Al Reem Island (the New ADGM Territories) in the Emirate of Abu Dhabi. This decision increased ADGM’s legislative area to 14,377,750.81 square meters. However, the ADGM Expansion Decision did not provide a transition period for the shift of the New ADGM Territories from mainland to ADGM laws and regulations, particularly regarding the real estate legal framework.
Suspension
On 9 June 2023, ADGM published several amendments to its laws and regulations, including:
- Real Property Regulations 2023
- Off-Plan Sales Register Regulations 2023
- Strata Title Regulations 2023
These amendments suspended the application of the aforementioned laws to the real property located within the geographical area of Al Reem Island until 31 December 2024. According to ADGM, this suspension aims to allow all businesses on Al Reem Island to meet the relevant requirements of ADGM’s legal and regulatory framework. ADGM is working with mainland authorities and regulators to facilitate a smooth and seamless transition of existing Al Reem Island businesses to ADGM’s jurisdiction.
Consultations
ADGM published a consultation paper on 31 May 2024 seeking views on its proposal for a comprehensive revamp of its real property regulatory framework in light of the aforementioned circumstances. The proposed amendments include changes to the existing Real Property Regulations 2015 and the enactment of several new subordinated regulations, including:
- Off-Plan Development Regulations 2024
- Off-Plan Development Regulations (Project Account) Rules 2024
- Off-Plan and Real Property Professionals Regulations 2024
The proposed amendments address the following:
- Adjustment of existing real estate property rights (including usufruct and musataha rights available on the mainland but not applicable in ADGM)
- Introduction of a framework for off-plan development with comprehensive regulations of escrow arrangements applicable to off-plan sales
- Introduction of regulations for different real estate practitioners (such as brokers, surveyors, and property managers)
ADGM encourages off-plan developers, investors, escrow banks, and all other entities and professional advisors to submit their comments on the proposed regulations and amendments by 19 June 2024.
[View source.]
