Sharjah: UAE Pass for Property Deeds

Khaleej Times, 14 April 2024: Sharjah’s Real Estate Registration Department (SRERD) has linked ownership and usufruct deeds to the UAE Pass.

The government department has become the first in the region to offer this service.

The Department’s customers will be able to download various deeds, such as ownership and private benefit deeds, through the UAE app on their mobile phones. The app will also allow users to access the services of local and federal government agencies in a simplified and secure manner without the need to visit government service centres.

SERD’s director-general has stated that this new service will be line with the directives from Sharjah’s Executive Council for digital transformation.

For more news and content, try Lexis Middle East. Click on lexis.ae/demo to begin your free trial of Lexis® Middle East platform.

You can also explore the legal landscape by subscribing to our Weekly Newsletter.

Want to learn more about Lexis® Middle East? Visit, https://www.lexis.ae/lexis-middle-east-law/.

Dubai: New Rent Revaluation Rules

Gulf News (United Arab Emirates), 3 April 2024: Dubai’s Real Estate Regulatory Authority or RERA has announced new rent revaluation rules came into force on 1 April 2024.

While landlords can still apply to RERA for a rent revaluation if they believe they are entitled to a higher rent than the one suggested by the updated Rental Index, they must attach a legal order or judgment.

The Index was updated on 1 March 2024 and became the single source for calculating rental increases.

Landlords will have to go through the Rental Dispute Centre or RDC and apply for a case to obtain the legal order.

For more news and content, try Lexis Middle East. Click on lexis.ae/demo to begin your free trial of Lexis® Middle East platform.

You can also explore the legal landscape by subscribing to our Weekly Newsletter.

Want to learn more about Lexis® Middle East? Visit, https://www.lexis.ae/lexis-middle-east-law/.

Dubai: Electronic Permits for GCC National Companions

Al Bayan, 22 March 2024: The General Directorate of Residency and Foreign Affairs in Dubai has announced it has activated a service for issuing prior electronic entry permits for companions of GCC nationals.

The aim is to guarantee smooth and easy entry to the UAE.

For the full story, click here.

For more news and content, try Lexis Middle East. Click on lexis.ae/demo to begin your free trial of Lexis® Middle East platform.

You can also explore the legal landscape by subscribing to our Weekly Newsletter.

Want to learn more about Lexis® Middle East? Visit, https://www.lexis.ae/lexis-middle-east-law/.

Sharjah: Draft Law Regulating Property Leasing Approved

Khaleej Times (United Arab Emirates), 17 March 2024: Sharjah’s Executive Council has approved a draft law regulating property leasing in the Emirate. They approved it with amendments.

They reviewed the Law and made amendments after reviewing a report from the Legislative and Legal Affairs, Appeals, Suggestions and Complaints Committee.

It will regulate the relationship between landlords and tenants in line with the Emirate’s laws. It will repeal and replace the 2007 legislation on this area.

For more news and content, try Lexis Middle East. Click on lexis.ae/demo to begin your free trial of Lexis® Middle East platform.

You can also explore the legal landscape by subscribing to our Weekly Newsletter.

Want to learn more about Lexis® Middle East? Visit, https://www.lexis.ae/lexis-middle-east-law/.

Dubai Financial Services Authority Launches Consultation on Credit Fund, Public Property Fund and Real Estate Investment Trust Proposals

Dubai’s Financial Services Authority has launched a consultation on credit funds, public property funds and real estate investment trust proposals. It ends on 20 May 2024.

The Authority is proposing to amend the provisions in the Collective Investment Rules of the Authority’s Rulebook in terms of the regulatory regimes for Credit Funds, Public Property Funds and Real Estate Investment Trusts or REITs.

The Authority’s existing rules on External Funds ban a DIFC-based Fund Manager from managing a Credit Fund that is established or domiciled outside the DIFC. As part of the consultation, the Authority is proposing to remove this restriction and allow Fund Managers authorised by the Authority to manage External Funds that are Credit Funds. However, they will only be able to do so where the External Fund is a Qualified Investor Fund as defined in the Collective Investment Law, which means it has its Units offered to Persons only by way of a Private Placement, has its Units offered only to Persons who meet the criteria to be classified as Professional Clients and requires an initial subscription of at least 500,000 US Dollars to be paid by a person to become a Unitholder in the Fund.

The Prospectus of the External Fund should meet general requirements for External Fund Prospectuses and include information specific to Credit Funds equivalent to that currently required under CIR Rule 14.4.13.

The Authority is also proposing to review the entire Credit Fund regime in terms of potential imbalances and will launch a call for evidence soon to gather market feedback on various aspects of the regime.

In terms of Public Property Funds and REITs, the Authority is proposing to amend the 2006 Rules. The latest amendments were made in 2015.

In terms of Public Property Funds, the Authority is proposing to strengthen the diversity of the Fund Manager board of Directors so that at least a third of the members of the Governing Body of a Fund Manager of a Public Property Fund, including a public REIT should be non-executive Directors, who meet the requirements of sufficient skill, knowledge, experience and independence of mind.

Independence criteria for non-executive Directors are specified in Article 42(1)(a) to (f) of the Collective investment Law.

In addition, the Authority is proposing to increase the quality and granularity of the Oversight Committee’s report for the benefit of existing and prospective Unitholders. The report should also include a summary of material findings related to the conduct of the Fund Manager, including any actual or potential breaches or inadequacies.

The Authority is proposing that Investment Committee members, as well as being independent of the Fund Manager, should have suitable knowledge, skill and experience to carry out their functions and be in a position to commit sufficient time to perform their duties properly too.

The Authority is proposing these requirements only apply to Public Property Funds, rather than all Property Funds.

The Authority is proposing the Fund Manager be responsible for ensuring Investment Committee members satisfy these requirements as well.

Elsewhere, the Authority is proposing to bolster the requirements concerning the content of an Investment Committee’s report, which forms part of the Fund’s annual report. It is proposing the report includes information on the investment opportunities reviewed by the Committee members and the outcomes of their assessments. The Committee should be able to decide if any information regarding rejected opportunities remains anonymised too to protect commercially sensitive information.

The Authority is also proposing amendments to the disclosure of Fund Manager remuneration. The Authority is proposing that the Fund Manager should disclose detailed information on how its fees and other charges compare to the fees and charges of similar schemes in comparable jurisdictions in the Prospectus .

If the comparison identifies material differences, the Fund Manager should explain these differences in a clear fashion, the Authority is proposing.

When it comes to the termination of fund management agreements, the Authority is proposing to introduce a rule clarifying the Authority’s expectations related to the termination provisions, specifically for Public Property Funds. The Authority is proposing to require that the fund management agreement must contain balanced termination provisions preventing unfairly prejudicial treatment of the Unitholders.

Examples of these provisions include excessive notice or termination periods for the removal of the Fund Manager or onerous conditions effectively preventing the Unitholders from terminating the agreement in the case of fraud, gross negligence or wilful misconduct.

In terms of the valuation of Fund property the Authority is proposing to supplement the current valuation rules with requirements that the valuation report should be published on the REIT’s website and through the normal disclosure channels applicable to a Listed Fund. It is also proposing the valuation report should be published no later than one month after it has been prepared and published no later than two weeks before the payment of the Fund Manager remuneration. In addition, it is proposing that the validity of the valuation reports be reduced from six to three months and the permitted difference on completion between the valuation and the transaction price be reduced from 5% to a maximum of 3%.

The Authority is proposing to require two independent valuations to be carried out and published and all fund property to be required to be valued semi-annually too.

In terms of improving quality of assets invested by REITs, the Authority is proposing to set the requirement at 75% of the REIT’s total assets.

It is also proposing to reduce to 15% of the NAV the total contract value of property under development which a REIT can invest in.

In terms of the minimum size of REIT distributions, the Authority is proposing to increase the percentage of audited annual net income of a REIT which should be distributed to the Unitholders from 80% to 90% to align with international approaches in this area.

The Authority has added it is going to seek further feedback on the merits of introducing a minimum number of Unitholders in Public Funds requirement.

The Authority is not currently proposing amendments to the leverage limits for REITs. The current leverage limits for Property Funds is set at 65% of the Gross Asset Value of the Fund. However, the Authority will seek industry feedback from the industry on whether the current leverage limit for REITs is still adequate.

The REIT industry has called for a 2.5% reduction to 62.5%.

Finally, the Authority is proposing to allow affected entities to have 12 months to comply.

For more news and content, try Lexis Middle East. Click on lexis.ae/demo to begin your free trial of Lexis® Middle East platform.

You can also explore the legal landscape by subscribing to our Weekly Newsletter.

Want to learn more about Lexis® Middle East? Visit, https://www.lexis.ae/lexis-middle-east-law/.