In the wake of progression by implementing new legislations, the Emirate of Dubai has promulgated a new law by virtue of Law number 9 of 2020 for regulating the 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 issuance of this Law is to maintain progression over such property and encourage or facilitate 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 issuance of this Law.
What does the Law govern?
Under the provisions of the Law, the family member having interest in one property are 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 fourth generation possessing 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 pertaining to 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 of Dubai to draft the contract as per the needs and requirements of the family to accommodate the provisions of having 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 member having interest in the family property to sell or transfer his shares to other 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 of 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 rules or decisions issued by the government of Dubai to ease the process of its regulation.
Originally published 7 July 2021.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
