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The Dubai property boom continues to attract investors from around the world and we support the local market predominately in the provision of international finance solutions, offshore company structures and insurance related services. One of the common issues that is frequently raised but seldom covered correctly by Real Estate Agents is that of the implications of Sharia Law in the event of a purchaser’s demise.
If you would like to know how this could affect you or someone you know who has bought property in Dubai, then
When buying in Dubai, very few investors appreciate that the legal system here is different to that they may have at home. In the event of death, the property does not necessarily pass to the wife since Sharia Law (the governing law of the UAE) determines otherwise as laid down in the Koran (An-Nisa Chapter 4 para 7 onwards). The Sharia Courts govern the dissemination of the estate - they may consider the fact that you may have a Will (as long as it has been translated and attested and how many people have done that let alone updated their Will - if they have a Will in the first place!) but it all comes down to the decision of the Judge on the day. The basic forced heirship rule is as follows :- wife 1/8, daughter 1/8, son 1/4, mother & father, spouse's mother & father, uncles, aunties, brothers, sisters and so on. If you would like a copy of the translated section of the Koran then let us know.
We have knowledge of two cases in particular. In the first instance, the Court ruled that the property should be disseminated in accordance with Sharia principles. Fortuitously, the wife got on with the extended members of her family and they all gave back their share of the estate after the event. In another case, the Judge ruled in accordance with the Will but insisted that that the family members showed up in Court. Those members had to make arrangements to fly in from Australia and South Africa to attend proceedings. It goes without saying that no one wants to spend time and money engaging Courts particularly at such a difficult period not to mention the delay in ensuring those assets are passed in a timely manner to those in need.
In order to ensure the property is passed on to those you wish effectively, an offshore company could be established with the spouses as Directors. In the event of death, the shares of company are passed on to the surviving spouse and beneficiaries. Although the spouse has died, the offshore company has not thereby an internal transfer of shares circumvents this potential Sharia issue. Remember a Will or buying in joint names will not circumvent Sharia legal issues.
It is not too late to rearrange the purchase structure of your property so contact us today for further details. |
