In our earlier article, we discussed the different types of real property interests recognised under the Abu Dhabi Global Market (ADGM) Real Estate Regulations 2024 (Regulations). In this follow-up, we will analyse how these interests can be transferred, altered, or impacted, legally termed as “conveyances” and which actions must be registered to be valid and enforceable under ADGM law.
Understanding Conveyances in ADGM
A conveyance refers to any legal act that results in the transfer, assignment, or alteration of an interest in real property. This can include transactions such as sales, leases, transfers of title, or other instruments that affect ownership or rights in the real property. The ADGM recognises various conveyance forms, offering a solid framework that promotes commercial transactions while ensuring legal clarity and rights protection.
Article associated with An Overview of Real Property Interests Under the ADGM Real Property Regulations 2024
Sale, Lease, Assignment, or Novation
These are the most common types of conveyances. For instance, when an individual sells a freehold Apartment on Al Reem Island, this transaction constitutes a conveyance. Similarly, if the buyer later leases the Apartment or assigns the lease to another party, both actions also qualify as conveyances. Novation occurs when a new party takes over an existing contract.
Gift of Real Property
The Regulations permit the gifting of property as well. For example, an individual can gift a residential apartment within the ADGM to a family member. Although no monetary exchange occurs, this gift still qualifies as a conveyance and must follow the relevant legal procedures.
Activation of Future Interests
If a lease signed today includes a clause allowing the tenant to acquire ownership after a specific duration, this eventual acquisition triggers a conveyance once the future interest becomes effective.
Mortgages, Foreclosures, and Discharges
A mortgage over a property is also regarded as a conveyance. When a bank registers a mortgage as collateral for a property, or subsequently forecloses or discharges that mortgage, each action is recognised as a conveyance within the ADGM regulatory framework.
Statutory Charges
Statutory charges are those imposed by law, such as for unpaid government fees or such charges. These charges are classified as conveyances and may affect the owner’s rights.
Caveats
A caveat serves as a legal notice that prevents any dealings with a property until a dispute or claim is addressed. For instance, if a beneficiary under a will believes they have a rightful interest in a property that is about to be sold, they may lodge a caveat to stop the sale until their claim is considered.
Eminent Domain
When the government forcibly acquires property for public use, such acquisition qualifies as a conveyance under the ADGM Real Estate Regulations, as outlined in Part 7.
Registrable Interests and Conveyances
To promote transparency and legal certainty, the ADGM Regulations mandate the registration of specific interests and transactions, including the following, which is found in chapter 3 of the Regulations:
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- Any recognised interest in real property (freehold, leasehold, etc.)
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- Agreements to establish or transfer property interests
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- Instruments evidencing conveyances, including short-form agreements
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- Amendments that impact existing registrations or the priority of interests (e.g., non-disturbance agreements)
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- Records of death or changes in representation concerning a property owner
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- Court writs affecting real estate, including executions and discharges
The registration process is managed through the ADGM Real Property Register, which offers public access and is the authoritative source for ownership and encumbrance information. The below link provides more details regarding the registration of your real property interests with ADGMRA: https://www.adgm.com/operating-in-adgm/post-registration-services/lease-and-real-property.
Resolving Conflicts Between Registers
Ownership disputes over freehold interests in real property can occasionally arise when there is a discrepancy between the Abu Dhabi Real Property Register and the register maintained by the Abu Dhabi Global Market (ADGM). To address such conflicts, Rule 3(2) of the Regulations provides a clear mechanism for resolution. Under this provision, once the ADGM Registrar becomes aware of an inconsistency between the two registers, the Registrar is empowered to investigate the matter and decide regarding ownership. Where appropriate, the Registrar may also seek a judicial determination by referring the issue to the Court. Following an internal decision or a court ruling, the Registrar may take reasonable steps to update and clarify the ADGM Real Property Register to accurately reflect the ownership position.
