There are widespread reports which range from intelligent guesses to pretty sure statements from various sources that this autumn a property law will be unveiled in the country which will completely clear any ambiguity on the issue of properties in the country, especially in Dubai. Indeed one cannot argue that the enactment of such a property law will largely clear the air and more importantly give a huge boost to the market.Buying under a leasehold contract or a freehold contract creates rights and responsibilities that are different in each case. First of all, one has to understand that even under UK law when you buy property under leasehold you are buying really the leasehold rights which are renewable say at the end of 125 years.

In contrast, when you buy a freehold property, you buy the asset as such. In the first case the leasehold contract is your asset while in the second case the property is your asset.

However, with a leasehold, the landlord still has obligations to maintain the common property (in the case of a community) and developers cannot just charge a community fee and then one day walk away. Yes, the developer can create an association of leasehold or even freehold owners to administer the overall development and this may allow him to diminish his responsibility.

It would follow that whether you buy a leasehold or a freehold property will only be a matter of legal finesse, and will be governed by the sort of property you are buying and what are your long term goals of ‘ownership’.

Generally  an apartment under leasehold is better as the issues of common building management are defrayed to the developer and perhaps an association. For foreign buyers, who will be here from time to time the leasehold structure, especially if it keeps the developer within the management structure of the overall property ensures that issues of maintenance and upkeep are easily resolved.

Over the past few years a new term has developed, which we fondly call Dubai Freehold. To me, this means where a person buys a leasehold contract which has predetermined renewal rights at a predetermined price, and a clause is written in that if and when a property law is passed giving full freehold rights the freehold title will be delivered to the buyer.