The UAE’s new Civil Transactions Law (Federal Decree Law No. 25 of 2025) (“CTL”), in force since 1 June 2026, introduces a codified federal framework for Musataha (right of superficies) rights. For investors and developers holding or contemplating Musataha arrangements, two provisions warrant immediate attention.
Significant points:
- Unregistered Musataha rights are “deemed void” under Article 1255 CTL – but the consequences for pre-CTL arrangements are contested, with legal opinion divided between a strict void and a more moderate voidable treatment.
- For arrangements entered into on or after 1 June 2026, registration is mandatory and non-negotiable.
- The non-payment termination trigger has been cut to six months under Article 1260 CTL, though parties may agree a longer period.
- Open-ended Musataha arrangements with no agreed duration may be terminated by either party on six months’ notice.
- Holders of pre-CTL arrangements should take specific legal advice rather than assume the best or worst outcome.
Registration: The Stakes of Getting It Wrong Are Genuinely Contested
Under Article 1255 of the CTL, a Musataha right must be concluded by a registered contract between the landowner and the Musataha holder. The law states that any unregistered disposition “shall be deemed void.”
That language is unambiguous in its text; but its practical consequences, particularly for arrangements concluded before the CTL came into force, are already the subject of differing legal opinion.
One reading, rooted in the CTL’s own definition of a void contract, is the most severe. Article 187 provides that a void contract “shall produce no legal effect and cannot be ratified,” and that any interested party (or the court of its own motion) may invoke its nullity. On this view, an unregistered Musataha has no legal existence as a real right, and nothing built upon it (buildings, financing arrangements, third-party security) has any protected foundation.
A second, more nuanced interpretation draws on the CTL’s own rule about when new laws take effect — and what they can apply to. Article 4 provides that the law shall not apply to facts and transactions preceding its effectiveness, unless it expressly stipulates otherwise. The CTL contains no specific transitional provision for pre-existing Musataha arrangements. Proponents of this view argue that a pre-CTL Musataha, validly concluded under the prior law, cannot simply be struck down by a subsequent statute that was silent on the point. On that analysis, a more proportionate treatment; closer to the CTL’s concept of a voidable contract under Article 188, which produces effects unless and until annulled, and which can be ratified, may be what courts ultimately apply to pre-existing arrangements.
Neither reading is without difficulty. The “deemed void” wording in Article 1255 does not distinguish between pre- and post-CTL arrangements. But the retroactive nullification of long-standing commercial relationships, without any transitional mechanism, is a significant consequence that courts are likely to scrutinise carefully.
What is not in dispute is the position for arrangements entered into on or after 1 June 2026: registration is mandatory, and an unregistered Musataha will be void.
For holders of existing pre-CTL Musataha rights, the prudent course is to take specific legal advice rather than assume either the most alarming or the most comfortable interpretation. The debate does not eliminate the risk; it defines its shape.
What to Do Now
Audit your Musataha portfolio to identify unregistered interests and assess whether each arrangement pre- or post-dates 1 June 2026. Take specific legal advice on the transitional position – the void/voidable debate matters for your exposure profile. Review contractual termination provisions in light of the new six-month default. Where no term has been fixed, consider agreeing one with your counterparty now.
The CTL brings a welcome codified structure to Musataha rights. The registration requirement is strict, and the legal debate about its retroactive reach is real. Neither should be ignored.
How Al Tamimi can help?
Please feel free to reach out to the key contacts for any further information on the above alert.
Key Contacts
Andrew Thomson, Partner, Head of Real Estate, a.thomson@tamimi.com
Mohammed Kawasmi, Partner, m.kawasmi@tamimi.com
Lynsey Grossi, Legal Director, l.grossi@tamimi.com
Kirsty De Sousa, Senior Knowledge Lawyer, K.Sousa@tamimi.com