Dr. Ghada M. Darwish Karbon Law Firm | View firm profile
In
Qatar, a new law on Real Estate Property registration and ownership is underway
to replace the existing old law.
In
the past, the ownership of property in Qatar was restricted to Qatari
nationals. However, this changed in 2006 and now an expatriate person is able
to possess and pass on the rights to their heirs.
Another
Law, Qatar Real Estate Development Law No (6) of 2014 which came into force in
May 2014 is the first law in Qatar that regulate the construction of commercial
and residential buildings for the purpose of selling units off-plan. The Real
Estate Development Law is intended to provide a legislative protection for
purchasers who buy off-plan units.
Now
a draft law, ‘Real Estate Property registration and ownership’ is being
prepared, which proposes strict penalties like imprisonment for up to three
years and fines of up to QAR 500,000 for obtaining real estate documents in an
illegal way. There would a fine of QAR 10,000 for anyone who was found guilty
of forging a real estate ownership document.
By
the new law all real estate owners are invited to register properties. It will
specify the limits of real estate ownership for Qataris, the terms of
registration and fines as well as imprisonment for violation of law.
The
new law will create a balance and will safeguard the rights of Qataris as well
as GCC citizens and foreigners simultaneously. Legal evidences will be
mandatory for registration and it should satisfy legal requirements. There
should be proper ownership documents according to the law.
It
is expected that the 52 year old existing law will have a makeover without
affecting the beneficial provisions, in order to meet the needs of the current
developments and fast expansion of buildings.
As
per the existing law the real estate ownership is limited to Qataris with some
exceptions mentioned in other laws which allow expatriates to own properties
and land in some designated areas like ‘Lusail’, and ‘Pearl-Qatar’.
In
the draft law ‘usufruct rights’ are granted in some other areas.
The
law would be stipulating the establishment of a Real Estate Registration
Committee at the Ministry of Justice through a ministerial decision. The
Minister will specify the committee’s obligation, duties and responsibilities.
The
committee will consider applications of registration of real estate properties
located within the towns and villages that are not registered and will consider
complaints related to real estate evaluation and fees.
More
terms and conditions of the law are yet to be revealed.
When
coming back to the Real Estate Development Law issued in 2014, there are
stringent penalties of fine and imprisonment for failure to comply with the
provisions.
A
Real Estate Development Dispute Committee is established to settle related
disputes and the Court of Appeal only can set aside the committee’s decisions.
Proper
license should be obtained by developers for selling off-plan units from the
concerned department of the Ministry of Economy and Trade and to be registered
on the Real Estate Developer’s Register at the Ministry in addition to other
requirements of ordinary commercial registration as per other relevant laws.
The licensee should be a Qatari if he is a natural person and devoid of any
criminal background and bankruptcy, and should be registered on the Commercial
Register and should have 3 years’ experience in the same field. Similar and
more requirements are there for the registration of licence for juridical
persons as Qatari companies.
The
above law states that a non-Qatari company can carry out such Real Estate
Development works after taking proper license, only in areas where they can own
property, further, the company should have been properly established outside
Qatar and must have 10 years’ experience in construction and real estate
development works and have finished such projects and should be duly registered
in Qatar.
Licenses
are granted for 3 years and can be renewed for further periods of 3 years.
Licensed developers will be included in a real estate developers’ register at
the Ministry.
Developers
must start within 6 months of receiving approval from the Ministry for off-plan
sales and the developer is required to submit progress reports as required by
the Ministry.
A
maximum of 50% of the works can be given to the subcontractors with prior
approval from the Ministry.
An
escrow account should be maintained for individual units to be sold off-plan to
ensure that the money in the account are used only for the purpose of the
development.
Controls
on financing multi-unit construction projects have also been introduced in the
law to ensure there is enough capital in the project to support borrowing.
The
developer must first obtain the approval of the Ministry for selling off-plan
units. There are certain requirements for getting such approval. Any selling
and other acts in respect of unapproved units will be considered void.
In
addition to that, the Developer must register the units in accordance with the
Real Estate Registration Law in the main Real Estate Register within 60 days
after the Building Completion Certificate is issued to prevent any
double-selling.
There
is Interim Real Estate Register for the registration of the units to be sold
off-plan and all rights and subsequent dealings in them. Interim title deeds
will be issued for each registered unit. Registered units can be freely sold
and mortgaged. The Law stated that Developers must comply with the required
status by the Law within 6 months of issuance, or such later date as determined
by Ministerial Decision.
While
the Law is an important move towards the right direction, it needs more
enforcement methods and should be adequate to face challenges and complexities.