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.