In the wake of the progression of implementing new legislation, the Emirate of Dubai has promulgated a new law under Law Number 9 of 2020 for regulating Family Ownership (hereinafter referred to as the Law). The concept of Family Ownership is seemingly up to the minute and was issued to regulate and govern the affairs concerning family property owned in the country. The objective behind the issuance of this Law is to maintain progression over such property and encourage or facilitate the transition of generations. The property lawyers of Dubai are pleased to discuss the pertinent aspects of the Law for the readers to understand the ideology behind the issuance of this Law.
What Does the Law Govern?
Under the provisions of the Law, the family member having an interest in one property is allowed to enter into a legally binding agreement (commonly referred to as the “Family Property Contract”) which enables the family members to have joint ownership and administration rights over the jointly-owned property thereby benefitting the members of the family as well as the upcoming successors.
Having said that, the law allows the members of the family up to the fourth generation possessing a common interest in family property to have equal rights in the property or rights as per the family property contract. The contract allows the members to discuss rights about a movable and immovable property, except for the shares in public joint stock companies.
The Law empowers members of the family to tweak the details or provisions of the contract or appoint the Best Lawyers in Dubai to draft the contract as per the needs and requirements of the family to accommodate the provisions of having a common interest in the property. In addition, the members can entail specific provisions concerning rights in income, capital, management and administration of the property.
The law further confirms that the administration of the family property shall be the responsibility of one or two managers appointed under the said contract. Additionally, the contract shall include provisions for the management rights, appointment and termination of the managers. Another significant provision of the Law allows any one of the family members having an interest in the family property to sell or transfer his shares to another member or pass it on through inheritance or to transfer under the specific conditions or circumstances of bankruptcy or transfer to third parties.
The Law has entailed a provision for establishing a special judicial committee comprising legal experts possessing expertise in family, management and property matters for resolving disputes between the parties of the family property contract. It is undeniable that the issuance of the Law is certainly to preserve family wealth and most importantly to offer a legal option, especially for those struggling with internal family matters concerning property rights. In addition, the Law will assist in regulating intricate family business structures incorporated in the Emirate of Dubai. Lastly, it is pertinent that the success of the Law is directly proportional to the implementation of rules or decisions issued by the government of Dubai to ease the process of its regulation.
Legal Update:
The introduction of a new personal status law for the non-Muslims effective February 2023, the Federal Decree-Law No. 41 of 2022 on Civil Personal Status, brings with itself numerous changes in terms of marriage, divorce, custody, inheritance etc. Following the issuance of the Abu Dhabi Personal Status Law for non-Muslim Foreigners in 2021, the federal government came out with a Personal Status Law that would apply to the entire non-Muslim population of the UAE, whether citizens or expatriates.
This New Federal Law has introduced changes in personal status matters for non-Muslims in matters related to family guidance mediation, rights between the parties concerning testimony, inheritance, divorce, calculation of time-based on the Gregorian calendar, and joint custody of children. The New Federal Law has introduced civil marriage at a federal level and provided equal rights to parties in requesting the divorce. The New Federal Law covers matters related to alimony, custody, inheritance, and parentage and shall be applied between non-Muslim expatriate residents in case none of them wanted to apply his/her home country's law in the UAE.
Under the New Federal Law, there is no concept of forced heirship, a person subject to the New Federal Law has testamentary freedom subject to the rules of the implementing executive regulations. If a person dies intestate, half of the inheritance shall go to the surviving spouse, and the remaining shall be distributed equally between the children without any difference between a girl or a boy. The New Federal Law provides details of distribution in various other scenarios as well when the surviving heirs are other than children and spouses. To know more information about this law, please feel free to click this link.
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