DIFC Makes Amendments to Application Law

Amendments include new mortgage fee, 60-day registration period for off-plan property

Dubai's International Financial Court (DIFC) has made amendments to its Application Law, also known as the Application of Civil and Commercial Laws in DIFC. The financial centre also announced that it would be making certain amendments to the DIFC Real Property Law and Real Property Regulations. These include a new mortgage registration fee of 0.25% of the value of mortgage being registered by a purchaser of real property.

Additionally, DIFC has extended the period of registration of off-plan sales from the current 30-day period to 60 days, to better accommodate the timetable for off-plan unit purchases, from launch stage to production of a final off-plan sales agreement. The extension provides purchasers of off-plan units more time to register such transactions and pay the freehold transfer fee.

Legal Reforms

• DIFC amends its Application Law, Real Property Law, and Real Property Regulations
• New mortgage registration fee of 0.25% of the mortgage value introduced for property purchasers
• Registration period for off-plan sales extended from 30 days to 60 days
• New Article 8A added to the Application Law, emphasising that DIFC law should first be interpreted by DIFC statutes and DIFC Court judgments

The amendment laws were enacted on November 14 and came into effect on November 21. Under the amendments to the Application Law, a new article has been added. Titled Article 8A, this clause establishes that DIFC Law is to be determined first by reference to DIFC statute, and DIFC Court judgements interpreting and applying DIFC statute.

Then, as DIFC law is not intended to be strictly statutory, Article 8A says that DIFC Statute is supplemented by the common law (including the principles and rules of equity). The DIFC Courts in determining the common law for DIFC may have reference to the common law of England and Wales and other common law jurisdictions.

These changes clarify that the DIFC Courts, like any leading common law courts, have the power to consider comparative jurisprudence from a variety of jurisdictions in developing or modifying common law rules and principles of equity on a case-by-case basis, but that they do not have broader legislative or policy making powers.

The article confirms that interpretation of DIFC statute may be guided by principles developed in respect of analogous laws in established common law jurisdictions. Additionally, if a DIFC Statute is based on an international model law, its interpretation may also be guided by international jurisprudence interpreting and applying the international model law, as well as interpretative aids and commentary published by international bodies regarding the international model law.

The amendments are intended to ensure that both English Common Law, and developments in other established common law jurisdictions, continue to remain a central feature of DIFC’s legal system.

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