Dubai Regulates Building Expropriation for Public Benefit and Related Compensation
His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, First Deputy Ruler of Dubai, and Chairman of the Court of His Highness Ruler of Dubai, issued Resolution No. (6) of 2024 on the Regulation of Expropriation of Buildings and Facilities Constructed on Real Estate in the Emirate of Dubai and Compensation Therefor (“Resolution”).
The Resolution outlines the procedure for submitting an application for property expropriation and specifies the compensation to be paid to the owner or occupant of the land being expropriated for a public benefit project.
The Resolution clarified that properties owned by the government, or its affiliated entities are not entitled to compensation. It also mentioned that expropriation applicants must submit their applications to the Dubai Land Department. The application must include essential information such as type of property to be expropriated, relevant project approvals obtained, a detailed description of the project’s nature, its public benefit, and names of the property’s owners or occupants.
The Dubai Land Department shall refer the application to the Real Estate Expropriation Committee for Public Benefit in the Emirate of Dubai (“Committee”), established pursuant to Resolution No. (2) of 2022 on the Expropriation of Real Estate for Public Benefit in the Emirate of Dubai. The Committee will review the application and issue a decision within 10 working days, either approving the expropriation in favor of the applicant or rejecting it if deemed not to serve the public benefit.
The Resolution clarified that an objection by the property owner to the expropriation application or compensation amount does not hinder the implementation of the expropriation decision. Similarly, and in accordance with the applicable legislations, any lawsuits filed by individuals with an interest in the property to be expropriated will not delay the expropriation process.
The Resolution pointed out that the property owner or occupant will be granted a period of one year to vacate the property and transfer possession to the expropriator, beginning from the date they are notified of the expropriation decision. This timeframe is designed to provide sufficient notice for the owner or occupant to make the necessary arrangements for relocation. However, the Committee has the discretion to extend this period for an additional year, provided both the property owner and the expropriator agree to the extension. The Committee may also shorten the period if it deems that the project’s progress cannot be delayed, ensuring that the timely execution of the public benefit project is not hindered by the expropriation process.
According to the Resolution, both the owner and occupant of the property are entitled to fair compensation for the expropriation of the property, and the owner has the right to object to the amount of compensation before the committee. However, it is worth noting that compensation will not be paid to the owner or occupant until the property has been fully vacated.
In determining the compensation to be granted, several factors will be considered, including the condition of the building, whether it is completed or still under construction, and the alignment of the compensation with prevailing market prices on the date the expropriation decision is issued. The valuation will also consider the value of decorations, wells, plants, irrigation systems, safety and firefighting systems, and other fixtures within the property. Nevertheless, the compensation will exclude the value of movable equipment and supplies that can be removed from the property without damage.
The Chairman of the Committee will issue the decisions and instructions necessary to implement this Resolution which shall supersede any conflicting provisions in other resolutions. This Resolution shall take effect from the date of its publication.
For further advice on related matters, please contact Mostafa Shehata, Senior Associate at Galadari Advocates and Legal Consultants mostafa@galadarilaw.com
Mostafa Shehata Senior Associate mostafa@galadarilaw.com |