Federal Decree Law No. (5) of 1985 Concerning the Issuance of the Civil Transactions Law of the United Arab Emirates (justice and juiciary law)

Article (1026 ) 
(1) Insurance is a contract whereby the assured and the insurer cooperate in facing the insured risks or events, and whereby the assured pays to the insurer a specified sum or 
periodical instalments, and if the risk or the event set out in the contract materialises, the 
insurer pays to the assured or the person stipulated as the beneficiary a sum of money or a  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  237 
 regular income or any other pecuniary right.  
(2) The law shall lay down provisions governing those bodies which may carry on insurance 
business and matters relating to their legal form, the manner of their establish ­ment, the 
manner in which they carry on their business, and supervision thereof, in such a manner as 
to achieve the cooperative aims of insurance, and the definitive laws and basic principles 
shall not conflict with the Islamic Shari'a.  
(3) If the law referred to in foregoing paragraph is not passed, th e rules and customs 
currently in force shall remain so with regard to insurance and the bodies which carry on the 
business of insurance.

Article (1027 ) 
Without prejudice to the provisions of the foregoing Article, it shall be permissible to effect 
insurance against risks arising out of personal accidents, accidents at work, theft, breach of 
trust, insurance for vehicles, civil liability, and all events which by custom and the special 
laws may be insured against.

Article (1028 ) 
(1) Any of the following p rovisions appearing in a policy of insurance shall be void:  
(a) any provision which provides that the right to insurance shall lapse by reason of a breach 
of the law unless the breach involves a felony or a deliberate misdemeanour;  
(b) a provision whereby the right of the assured shall lapse by reason of his delay in giving 
notice of the incident insured against to the parties which should be notified or to provide 
documents in the event that it appears that there is a reasonable excuse for the delay;  
(c) a ny printed clause not shown conspicuously, if it relates to any circumstance leading to 
the avoidance of the contract or the lapse of the right of the assured;  
(d) an arbitration clause unless contained in a special agreement separate from the general prin ted conditions in the policy of insurance; and  
(e) any arbitrary clause breach of which it appears would have no effect on the occurrence 
of the incident insured against.  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  238

Article (1029 ) 
(1) It shall be permissible for the in surer to be exempted from liability if the beneficiary has 
paid an indemnity to the injured party without the consent of the insurer.  
(2) It shall not be permissible to rely on such agreement if it is shown that the payment of 
the indemnity was made for th e benefit of the insurer.

Article (1030 ) 
It shall be permissible for the insurer to take the place of the assured in respect of any indemnity paid to him for loss, in bringing the claim of the assured against the person who 
caused the loss out of which the liability of the insurer arose, unless the person who caused 
the loss was an ascendant or descendant of the assured, or his spouse, or somebody living in 
one household with him, or a person for whose acts the assured is responsible.

Article (1031 ) 
Special provisions governing various contracts of insurance not contained in this law shall 
be dealt with by special laws.  
 
Part  2: Effects of the contract  
1- Obligations of the assured

Article (1032 ) 
The assured shall be obliged as follows:  
(a) to pay the s ums agreed at the time stipulated in the contract;  
(b) to declare, at the time the contract is made, all information knowledge of which is of 
concern to the insurer to estimate the risk which he is assuming;  
(c) to notify the insurer of any matters occurri ng during the period of the contract which lead 
to such risks being increased.

Article (1033 ) 
(1) If the assured acting in bad faith conceals any matter or provides incorrect information  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  239 
 such as to lessen the degree of t he risk insured against, or to vary the subject matter thereof, 
or if he fraudulently fails to discharge any obligation he has undertaken, the insurer may 
require that the contract be cancelled, and he shall be entitled to keep any instalments which fell d ue prior to such requirement.  
(2) If fraud or bad faith is disproved, then the insurer must, when he requires that the 
contract be cancelled, return to the assured the premiums he has paid, or return such part 
thereof in respect of which the insurer was no t on risk.  
  
2- Obligations of the insurer

Article (1034 ) 
The insurer must pay the indemnity or the sum due to the assured or the beneficiary in the 
manner agreed upon when the risk materialises or when the time specified in the contract 
comes.

Article (1035 ) 
The obligation of an insurer under an insurance against civil liability shall only become effective when the injured party makes a claim against the beneficiary after the occurrence 
of the incident out of which such liability arose.

Article (1036 ) 
(1) Claims arising out of contracts of insurance shall not be heard after the expiration of three years from the occurrence of the incident out of which the claim arose, or from the 
person concerned having knowledge of the occurrence thereof.  
(2) That time  limit shall, in the event of the assured concealing particulars relating to the risk 
assured or providing false particulars, only begin to run as from the date the insurer had 
knowledge thereof.  
  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  240 
 Part  3: Special provisions relating to cert ain types of insurance  
1- Fire insurance

Article (1037 ) 
An insurer under a fire insurance shall have the following liabilities: 
(a) for damage arising out of the fire notwithstanding that the fire arose out of earthquake, 
storm, winds, hurricane, household  explosions and disturbances caused by the falling of 
flying objects and other flying craft, and all matters which are customarily regarded as falling 
within that type of insurance;  
(b) for damage which is the direct and certain result of the fire;  
(c) for damage sustained by the property insured through steps taken in the course of rescue 
to prevent the spread of the fire; and  
(d) for loss or disappearance of property insured during the fire, unless it is proved that that 
was the result of theft.

Article (1038 ) 
An insurer shall be liable for fire damage arising through the error of the assured or the 
beneficiary.

Article (1039 ) 
An insurer shall not be liable for damage deliberatel y or fraudulently caused by the assured 
or the beneficiary, notwithstanding any agreement to the contrary.

Article (1040 ) 
An insurer shall be liable for fire damage caused by those working under the assured, 
whatever may be the nature of their default.

Article (1041 ) 
The insurer shall be liable for damage arising out of the fire notwithstanding that such -fire 
arose out of a defect in the property insured   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  241

Article (1042 ) 
(1) Any person who insures property or an interest with more than one insurer must notify 
all of them of the other contracts of insurance, the amount of each of them, and the names 
of the other insurers.  
(2) If there are several insurers, the amount of the insurance must not exceed the value of 
the property or interest insured.

Article (1043 ) 
If insurance is placed over property or an interest with more than one insurer in sums 
exceeding in the aggregate the value of the property or interest insured, each of the insurers 
shall be bound to pay a part equivalent to the proportion of the sum insured to the total of 
the contracts of insurance, without the amount payable to the assured exceeding the value 
of the fire damage.

Article (1044 ) 
Fire insurance placed over the moveable property of the assured as a whole which at the 
time of the fire is in places occupied by him, shall also cover property owned by the 
members of his family and persons working in his service if they are living with h im in one 
household.

Article (1045 ) 
(1) If the property insured is encumbered by a mortgage or other security in rem, such rights 
shall attach to the insurance money due to the assured under the policy of the insurance.  
(2) If such rights are registered or have been notified to the insurer by registered letter, it 
shall not be permissible for him to pay the money he owes to the assured save by the consent of those obligees.  
     
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  242 
 2- Life Insurance

Article (1046 ) 
The insurer u nder a policy of life insurance must pay to the assured or the beneficiary the 
sums agreed upon the occurrence of the insured event or at the time stipulated in the 
contract, without the need for proof of any loss suffered by the assured or the beneficiary .

Article (1047 ) 
In order for there to be a valid life insurance for the life of another, he must consent thereto 
in writing prior to the placing of the insurance, and if he is not of legal capacity, then the 
insurance shall be valid only upon the consent of his legal representative.

Article (1048 ) 
(1) The insurer shall not be obliged to pay the amount of the insurance if the assured has 
committed suicide, and he must return to the beneficiary a sum equivalent to the reserve 
value of the insurance unless the beneficiary proves that the purpose of the suicide was not to obtain the insurance money, and in that event the premiums must be repaid, with a 
deduction for proper expenses.  
(2) If the suicide occurs without choice or unconsciously or through any ot her cause leading 
to loss of free choice, the insurer shall be bound to pay the full sum insured, and the 
beneficiary must prove that the life assured was not in possession of free choice at the time 
of the suicide.

Article (1049 ) 
(1) The insurer shall b e discharged of his obligation in the case of insurance over the life of 
another where the assured has deliberately caused the death of a third person or if the death 
has been incited by the assured.  
(2) If the insurance is in favour of a person other than  the assured and such person 
deliberately causes his death or if the death takes place at his instigation, he shall be 
deprived of the benefit of the insurance money.  If the event is a mere attempt to cause  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  243 
 death, the assured shall have the right to substitute an alternative beneficiary.

Article (1050 ) 
(1) The assured may stipulate that the insurance money be paid to persons specified in the 
contract or to such persons as he may thereafter specify. 
(2) If the insurance is in favour of the spouse, childre n, descendants or heirs of the assured, 
the insurance money shall be payable to any person who proves that he falls within that 
description at the time of the death of the assured, and if the heirs are the beneficiaries, the 
insurance money shall be divide d between them in accordance with their lawful portions in 
the estate.

Article (1051 ) 
An assured who is bound to pay periodical premiums may terminate the contract at any time provided that he notifies the insurer of his intention in writing, and he shal l be released 
of the obligation to pay subsequent premiums.

Article (1052 ) 
(1) Any erroneous information as to the age of the life assured or an error therein shall not 
result in the policy of insurance becoming void unless the true age of the assured exceeds 
the limit laid down in the insurance policy.  
(2) If the effect of the erroneous information or the stake is such that a lesser premium has been paid than should have been paid, the insurance must be reduced to the proportion 
which the agreed premium bears to the premium which should have been paid on the basis of the true age.  
(3) If the agreed premium is greater than would have been payable on the basis of the true age of the life assured, the insurer must return the excess which has been paid for hi m and 
reduce the subsequent premiums to a level appropriate to the true age.  
 
  
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  244

Article (1053 ) 
If a life insurer pays the amount of the insurance, he shall not have the right to become 
subrogated to the rights of the assured or the beneficiary with regard  to the person who 
caused or was responsible for the insured event.

Article (1054 ) 
The insurance money receivable by the assured or the beneficiary at the end of the period 
agreed in the contract must not contain any usurious interest.

Article (1055 ) 
The sums agreed to be payable on the death of the assured shall not be included in his 
estate.  
  
Section 5 : Contracts of personal guarantee  
Chapter One : 1 Suretyship  
Part  1: Elements of suretyship

Article (1056 ) 
Suretyship is the joining of the liability of  a person called the surety with the liability of the 
obligor in the performance of his obligations.

Article (1057 ) 
(1) Suretyship may arise through use of that word, or words indicating a guarantee.  
(2) For a suretyship to arise and to be effective it i s sufficient for the surety to make the offer, 
unless the obligee rejects it.

Article (1058 ) 
It is a prerequisite of a suretyship arising that the surety should be competent to make gifts.  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  245

Article (1059 ) 
The suretyship shall be void if the surety makes  a condition in his own favour that he should 
have the option to make it conditional.

Article (1060 ) 
It is valid for a suretyship to be accomplished, or restricted by a valid condition, or 
dependent upon an appropriate condition or for it only to become operative in the future or 
for a limited period.

Article (1061 ) 
In order for the suretyship t o be valid, the principal debtor must be indebted to the obligee in 
respect of a debt or property or a known person and it should be within the capacity of the surety to discharge the obligation.

Article (1062 ) 
Suretyship in respect of the expenses of a wife or relatives shall be valid notwithstanding that there has been no judgment or agreement thereon.

Article (1063 ) 
The suretyship of the agent of the seller to a purchaser in respect of the payment of the price at which he was appointed to sell the pr operty is invalid, and there shall be no suretyship on 
the part of a guardian with regard to the price at which he sells the property of the infant, nor shall there be any suretyship of a trustee for the price for which he has sold waqf property.

Article (1064 ) 
(1) Suretyship for a person suffering from a terminal illness shall not be valid if the debtor 
owes a debt greater than the amount of his property.  
(2) Suretyship shall be valid if the debt is not greater than the amount of the property, and  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  246 
 the pr ovisions relating to wills shall apply thereto.

Article (1065 ) 
Suretyship conditional on the discharge of the principal obligor is an assignment.  An 
assignment which provides that the assignor should not be discharged is a suretyship.

Article (1066 ) 
The surety under suretyship subject to a suspensive condition or a deferred suretyship may 
revoke the suretyship before the obligation becomes actual.

Article (1067 ) 
The suretyship shall cover the incidentals of the debt and costs of claiming unless the contrary has been agreed.  
  
Part  2: Certain types of suretyship  
1- Securing the attendance of a person

Article (1068 ) 
(1) Surety for the person obliges the guarantor to  produce the person guaranteed at the time 
stipulated at the request of the beneficiary of the guarantee, and if he does not do so it shall 
be permissible for the judge to impose an exemplary fine, but it shall be permissible for him to exempt him if he pr oves that he was unable to secure the attendance of the person 
guaranteed.  
(2) If the surety for a person has undertaken to pay a specified sum by way of a penalty 
clause in the event that he does not secure the attendance of the person guaranteed, he shal l 
be bound to pay that sum, and the judge may exempt him from it either in whole or in part if 
it appears that that course is justified.

Article (1069 ) 
If the surety undertakes to pay the debt upon his failure to deliver the person guaranteed, he  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  247 
 must  pay it if he fails to deliver up the person.

Article (1070 ) 
(1) A surety for a person shall be released if he delivers the person guaranteed to the 
beneficiary, or if he performs, that for which he stood surety.  
(2) He shall likewise be released upon th e death of the person guaranteed, but shall not be 
released upon the death of the obligee beneficiary, whose heirs shall have the right to require the surety to deliver up the person guaranteed at the time specified.

Article (1071 ) 
The person guaranteed must be delivered at the place specified by the surety, and if no place 
is specified then he shall be delivered up at the place where the contract was made.

Article (1072 ) 
If the surety has paid what is due by virtue of the absence of the person guarante ed and it is 
impossible to secure his attendance and it is then proved that the person guaranteed died 
before the payment was made, the surety shall recover what he has paid.

Article (1073 ) 
If it does not appear from the contract of guarantee that it is a guarantee for property or guarantee for a person and there is no circumstantial evidence either way, it shall be 
presumed to be a guarantee for property, and if the surety claims that the intention was that 
it should be a surety for a person and the obli gee claims that the intention was that it was a 
surety for property, the evidence of the guarantor on his oath shall be preferred.

Article (1074 ) 
A husband may revoke a surety for the person if it was issued by his wife without his 
consent notwithstandin g that the debt secured is less than one- third of her property.  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  248 
 2- Darak Suretyship (guarantee to give indemnity if goods sold are owned by 
a third party)

Article (1075 ) 
A darak suretyship is a suretyship to pay the price of property sold if there are th ird party 
rights subsisting in that property.

Article (1076 ) 
No claim shall be made against the surety of a seller by way of darak unless judgment is given that a third party right subsists in the thing sold and the seller is ordered to return the 
price.  
  
Part  3: Effects of suretyship  
1- Between the surety and the obligee

Article (1077 ) 
(1) The surety must discharge his obligation when the time falls due. (2) If the obligation is conditional , it must be discharged when the condition is fulfilled.

Article (1078 ) 
(1) The obligee may claim against the principal obligor or the surety, or may claim against them both.  
(2) If the surety has a surety the obligee may claim against either of them as he wishes.  
(3) Provided that if he makes a claim against one of them, his right to claim against the others shall not lapse.

Article (1079 ) 
It shall be permissible for the suretyship to be conditional upon the discharge of the debt out of the property of the obligor deposited with the surety, on condition that the obligee agrees 
thereto.  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  249

Article (1080 ) 
If the suretyship is unqualified, the obligation of the surety shall follow the obligation of the 
principal obligor, whether immediate or deferred.

Article (1081 ) 
If one of them guarantees an immediate debt by way of deferred suretyship, the debt as against both the surety and the principal obligor shall be deferred unless the surety 
stipulates that the deferment shall apply to himself alone or the obligee stipulat es that the 
debt should be deferred with regard to the surety only.  In that event the debt shall not be 
regarded as deferred with regard to the principal obligor.

Article (1082 ) 
If a debt is secured by a security in rem prior to the suretyship arising, and the surety has made it a condition that recourse should be had against the principal obligor first, it shall not be permissible to execute against the property of the surety prior to executing against the 
property standing as security for the debt.

Article (1083 ) 
It shall be permissible for the surety of a surety to make it a condition that the obligee should 
have recourse against the other surety first.  If the surety or the obligor dies before a deferred 
debt falls due, the debt shall be recoverabl e out of the estate of the deceased.

Article (1084 ) 
If the surety or the debtor dies before a deferred debt falls due, the debt shall be payable out 
of the estate of the deceased.

Article (1085 ) 
If there are several sureties for one debt it shall be permissible to make a claim against each  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  250 
 of them for the whole debt unless they have all become sureties under one contract which 
does not provide that they should be jointly liable, and no claim may b e made against any of 
them save in respect of the amount of his share.

Article (1086 ) 
If the sureties are jointly liable as between themselves and one of them discharges the debt 
upon its falling due, he shall have the right to have recourse against all of the remaining 
sureties for his share of the debt and his share in the proportion of any one of them who is 
bankrupt.

Article (1087 ) 
Any suretyship imposed by a provision in the law or by an order of the court shall, upon 
becoming unqualified, have the effect of the sureties being jointly liable.

Article (1088 ) 
If the creditor receives satisfaction of his debt by (accepting) another thing, the principal obligor and the surety shall both be discharged unless third party rights subsist in that thing.

Article (1089 ) 
If his debtor becomes bankrupt, the creditor must prove for his debt in the bankruptcy otherwise his right of recourse against the surety shall lapse to the extent of the loss 
sustained by his not having so done.

Article (1090 ) 
(1) The sure ty shall not have any right of recourse against the principal obligor in respect of 
any obligation which he has discharged on his behalf unless the suretyship arose at the request or with the consent of the principal obligor, and the surety has discharged the 
obligation.  
(2) He shall not have any right of recourse in respect of early payment of a deferred debt  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  251 
 until such time as the debt would have fallen due.

Article (1091)  
(1) The obligee must deliver to the surety upon dischar ge by him of the debt all necessary 
papers to enable him to exercise his right of recourse against the principal obligor.  
(2) If the debt is secured by a security over other property, the obligee must release it to the 
surety if it is a chattel, or transfe r his rights to him if the property is real property, and 
provided that the surety shall bear the costs of such transfer, and may have recourse for 
those costs against the principal obligor.

Article (1092 ) 
If a debt is due, the creditor must claim for it  within six months from the date on which it fell 
due, otherwise the surety shall be deemed to have been discharged.  
  
2- Between the surety and the principal obligor

Article (1093 ) 
(1) If the surety gives any other thing in lieu of the debt, then his reco urse as against the 
principal obligor shall be for that which he stood surety for and not for that which he in fact gave.  
(2) If the obligee accepts a proportion of the debt in settlement, then the recourse shall be 
only for the amount paid by way of settl ement and not for the entire debt.

Article (1094 ) 
(1) If the principal obligor pays the debt before the surety pays it or if he learns of any reason preventing the obligee from making a claim, he must notify the surety, and if he does not do 
so and the s urety discharges the debt, he may then at his election have recourse against the 
principal obligor or the obligee.  
(2) If a claim is made against the surety he must join the principal obligor therein, and if he 
does not do so it shall be permissible for th e principal obligor to raise as against him any 
defences which it would have been competent for him to raise in the claim brought by the  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  252 
 obligee.

Article (1095 ) 
A surety for property or for the delivery up of the body of a person may make an application 
for an order preventing the person for whom he stands surety from travelling abroad if the 
suretyship arose through his order and there is evidence giving rise to a fear that the surety 
will suffer loss.

Article (1096 ) 
The surety shall have a right of re course against the principal obligor for expenses incurred 
by him in carrying out his obligations under the suretyship.

Article (1097 ) 
If the principal obligors are jointly liable, then the person standing surety for them shall have the right to require all of them to have recourse against any one of them for the total amount 
of the debt which he has discharged.

Article (1098 ) 
It shall not be permissible for a surety to receive any consideration for his suretyship, and if he does so he must return it to the owner, and his capacity as surety shall lapse if he accepts 
such thing from the obligee or the principal obligor or from a third par ty with the knowledge 
of the obligee, and if he accepts it without his knowledge he shall be bound by his suretyship 
and shall be obliged to return that which was given in consideration.  
  
Part  4: Termination of suretyship

Article (1099 ) 
Suretyship shall terminate as follows: - 
(a) by discharge of the debt;  
(b) by the loss of the thing held by the person for whom he stands surety by reason of force  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  253 
 majeure and before a claim is made;  
(c) by the cessation of the contract by virtue of which the right against t he principal obligor 
arose;  
(d) if the obligee discharges the surety from his suretyship or the principal obligor from the 
debt;  
(e) upon the death of the principal obligor;  
(f) by the principal obligor being brought to the place of delivery after the deferred period 
matures, notwithstanding that the obligee refuses to accept delivery, unless he is unlawfully 
prevented from so doing;  
(g) by bringing the principal obligor before the period falls due, and the obligee suffers no loss through taking delivery of  him; and  
(h) by handing over the principal obligor himself.

Article (1100 ) 
The surety for the price of a thing sold shall be discharged from his suretyship if the sale is 
voided or if there is defect in title in the thing sold or if it  is rejected by reason of a defect.

Article (1101 ) 
If the surety or the principal obligor makes a composition with the obligee for part of the 
debt, they shall both be discharged from the balance, and if it is stipulated that the surety 
alone should be discharged, the obligee may at his election take the amount agreed upon from the surety and the balance from the principal obligor, or he may if he wishes take no action against the sure ty and make a claim for the whole debt against the principal obligor.

Article (1102 ) 
The rights of the obligee shall be transferred to his heirs upon his death.

Article (1103 ) 
If the obligee dies and he leaves the whole of his estate to the principal obligor, the surety  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  254 
 shall be discharged from his suretyship, and if he has another heir the surety shall be 
discharged in respect of the share bequeathed to the principal obligor only.

Article (1104 ) 
No claim may be made against a surety in respect of a s uretyship for a limited period save 
for the obligations arising during the period of the suretyship.

Article (1105 ) 
(1) If the surety or the original creditor assigns the debt secured or part thereof to another person by way of assignment accepted by the assignee or the debtor whose debt was so 
assigned, the principal obligor and the surety shall be discharged to the extent of such 
assignment.  
(2) If it is a condition of the assignment that the surety alone should be discharged, he alone 
shall be discharg ed to the exclusion of the principal obligor.  
 
 
Chapter Two : Assignments  
Part  1: The creation of an assignment

Article (1106 ) 
An assignment is the transfer of a debt and claim from the liability of the transferor to the transferee.

Article (1107 ) 
An assignment is an immediately binding contract unless one of the parties reserves to 
himself the option to rescind.

Article (1108 ) 
(1) An assignment shall be limited or absolute.  
(2) A limited assignment is one the execution of which is restricted to a  (particular) debt 
owned by the transferor to the responsibility of the transferee or (liability in respect of)  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  255 
 particular property in his possession by way of trust or guarantee.  
(3) An absolute assignment is one which is not restricted to any of the fore going, even 
though such (debt or property) may be in existence.

Article (1109 ) 
(1) In order for an assignment to be valid, there must be the consent of the transferor, the 
transferee, and the creditor.  
(2) A transfer made between the transferor and the t ransferee is dependent upon the 
consent of the creditor.

Article (1110 ) 
In order for an assignment to be valid, the transferor must be indebted to the creditor, but it is not necessary that the transferee be indebted to the transferor.  If he consents to the 
transfer, he shall be bound by the debt to the creditor.

Article (1111) 
An assignment by a person having an entitlement in respect of a waqf to his creditor shall be 
valid if it is an assignment limited to the amount due from the guardian of the waq f if the 
accrued yield of the waqf is in his hands prior to the assignment.

Article (1112 ) 
The consent of a father or guardian to an assignment to a third party shall be permissible if it 
benefits the minor in that the transferee is more solvent than the transferor, but shall not be 
permissible if he is equally or nearly equally as solvent as the tr ansferor.

Article (1113 ) 
In addition to the general conditions, the following conditions must also be satisfied in order 
for an assignment to be valid: 
(a) it must be completed and dependent on no condition other than an appropriate or  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  256 
 customary condition, nor must any future contract be dependent on it;  
(b) the performance thereof must not be deferred to an unknown future date;  
(c) it must be limited in time to a specific time limit;  
(d) the property transferred must be a known debt which is capable of being satisfied;  
(e) the property transferred to the transferee in a restricted transfer must be a debt or, 
specific property which cannot be compounded, and both types of property must be equal 
in type, amount and description; and 
(f) it must not involve a ny conditional or substantial additional consideration in favour of 
any of the parties, and the assignment shall be unaffected by such additional consideration 
agreed upon after the assignment was made, and it shall not be payable.

Article (1114 ) 
(1) An assignment shall be void if one of the conditions necessary therefor is not present, 
and the debt shall revert to the transferor.  
(2) If the transferee has made payment to the creditor before it becomes apparent that the 
transfer is void, he shall have the  option of recourse against either the transferor or the 
creditor.

Article (1115 ) 
A transfer shall become void upon the reason for the debt transferred or the reason for the 
transfer itself becoming void.  
  
Part  2: Effects of an assignment 
1- Between the  creditor and the transferee

Article (1116 ) 
The creditor shall have the right to make a claim against the transferee, and the transferor shall be discharged from the debt and claim together if the transfer is validly made.  
 
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  257

Article (1117 ) 
The debt shall be transferred to the transferee retaining the same characteristics as it had in 
the hands of the transferor.  If it is immediately payable, it shall remain immediately payable 
after the transfer, and if it is deferred, it shall retain its d eferred status.

Article (1118 ) 
It shall be permissible for the creditor and the transferee after the assignment is made to 
agree mutually to part of the debt or less thereof or a deferment of an immediately payable debt or to the immediate payment of the deferred debt or to take some other consideration 
for the debt unless the same amounts to riba al -nasi'a (see Article 733(4)).

Article (1119 ) 
The debt transferred shall retain all of the guarantees attaching thereto despite the fact that the person of t he debtor has changed, but nevertheless a guarantor, whether in rem or in 
personam, shall not remain liable to the creditor unless he has agreed to the transfer.

Article (1120 ) 
The transferee may, vis -à-vis the creditor, rely on all defences relating to the debt which he 
would have had as against the transferor, and he may rely on all defences available to the 
transferor vis -à-vis the creditor.  
  
2- Between the transferor and the transferee

Article (1121 ) 
The transferor shall have the right to claim against the transferee for any debt or property 
owed by him if the transfer is not restricted specifically to either of them, and the transferee 
shall not have the right to detain such property until making paym ent to the creditor.

Article (1122 ) 
The right of the transferor to claim against the transferee for the property of his that the  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  258 
 latter has by way of debt or specific property shall lapse if the transfer is restricted to either 
of such type of property and the conditions thereof are satisfied, and the transferee shall not 
be discharged as against the creditor if he pa ys either of them to the transferor.

Article (1123 ) 
It shall not be permissible for the transferee in a valid assignment of either type to refuse to 
make payment to the creditor notwithstanding that the transferor may have recovered his 
debt from the tra nsferee or retrieved his property held by the transferee.

Article (1124 ) 
(1) If an absolute assignment is made with the consent of the transferor and if a debt is owed to him by the transferee, there shall be a set -off of his debt after payment.  
(2) If h e is owed no debt by him, the transferee shall have recourse after payment.  
  
3- Between the creditor and the transferor

Article (1125 ) 
The transferor must deliver to the creditor the document of title relating to the obligation 
transferred and any necessa ry evidence or means to enable him to obtain his right.

Article (1126 ) 
If the transferor guarantees to the creditor the solvency of the transferee, such guarantee relates only to his solvency at the time of the transfer unless a contrary agreement is mad e.

Article (1127 ) 
(1) If the transferee dies before discharge of the debt under a limited transfer, the creditor shall be entitled to the property owed by the transferee or in his possession during the 
lifetime of the transferor.  
(2) If a debt of either type being transferred is deferred and the transferor dies, that deferred date shall hold good but shall be advanced to the date of the death of the transferee.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  259

Article (1128 ) 
(1) A limited transfer sh all be void if the debt lapses or if there are third party rights in the 
specific property arising through some prior matter, and the creditor shall have a recourse in 
respect of his right against the transferor. 
(2) A limited transfer shall not be void if  the debt lapses or third party rights arise in the 
specific property by virtue of an occurrence taking place after the transfer, and the transferee 
shall have a recourse against the transferor, after making payment, in respect of what he has 
paid.

Article (1129 ) 
The creditor shall have recourse against the transferor in the following circumstances:  
(a) if the assignment is cancelled by the agreement of the parties thereto;  
(b) if the transferee denies the assignment, and there is no evidence to prove it,  and he 
swears that it is non- existent; or  
(c) if, in the case of a limited assignment, the specific property is lost and is not guaranteed.  
  
4- Between the creditor and third parties

Article (1130 ) 
(1) If there are several assignments in respect of one r ight the first assignment shall take 
priority and be effective with regard to third party rights.  
(2) An assignment shall not be effective with regard to third parties unless official notice 
thereof is given to the transferee or is accepted by him by a doc ument of certain date.

Article (1131 ) 
(1) If the property in question is impounded while in the hands of the transferee before the 
transfer becomes effective as against third parties, then the transfer shall, with regard to the 
impounding party, have the  status of an impoundment made by another person.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  260 
 (2) In that event, if the impounding takes place after the transfer has become valid as against 
third parties, the debt shall be divided between the earlier impounding party, the creditor, 
and the latter i mpounding party, by way of division as between creditors, but provided that 
there shall be taken from the share of the latter impounding party such amount as 
supplements the value of the assignment due to the creditor.  
  
Part  3: Termination of the assignment

Article (1132 ) 
An assignment shall terminate by the subject matter thereof being discharged to the 
creditor, either in fact or de jure.  
  
Book Three : Original Rights In Rem  
Section 1 : Rights of ownership  
Chapter  One : The right of ownership generally 
Part  1: Scope, means (of acquisition), and protection

Article (1133 ) 
(1) The right of ownership is the power of the owner to dispose absolutely of his property, whether of the property itself, or of the benefit or exploitation of it.  
(2) The owner of a thing alone has the right to the beneficial use of the thing owned, and to 
its yield, fruits and produce, and to dispose of it in any manner permitted under the law.

Article (1134 ) 
(1) The owner of a thing owns that which is regarded as the essential elements of it if such 
cannot be separated from it without the thing being destroyed, damaged or altered.  
(2) Any person who owns land owns that is above and beneath it to the extent useful in 
enjoying it, upwards and downwards, unless the law or an ag reement provide to the 
contrary.  
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  261

Article (1135 ) 
(1) No person may be deprived of ownership without lawful cause.  
(2) Expropriation of ownership for the public benefit shall be against just compensation and 
in accordance with the provisions of the law.  
  
Part  2: Restrictions on rights of ownership  
1- General provisions

Article (1136 ) 
The owner may dispose of his property absolutely unless his disposition causes gross harm to another or is contrary to the laws and regulations relating to public or private interests.

Article (1137 ) 
Gross harm is that which is causative of the weakening or destruction of a building or which 
prevents essential use, i.e.  the benefits intended, being made of a building.

Article (1138 ) 
If a third party right subsists in property, the owner may not dispose of it in such a way as to harm the owner of that right, save with his consent.  
 
2- Restrictions on neighbours

Article (1139 ) 
To impede the passage of light to a neighbour shall be deemed to be gross harm, and no 
person shall have the right to make a building whereby the windows of his neighbour's 
house are blocked in such a way as to prevent the passage of light to him, otherwis e it shall 
be permissible for the neighbour to require that the building be removed to remove the 
damage.  
 
   
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Article (1140 ) 
If a person has property which he is lawfully enjoying and another person makes a new 
building close to it which is harmed by the fo rmer position, the person making the new 
building shall not have the right to claim for damages arising therefrom, and he shall be 
responsible for the.  elimination of such damage.

Article (1141 ) 
(1) The owner of the air space or the benefit thereof through which the branches of another person's tree extends shall have the right to require the removal of that which extends into 
his air space, notwithstanding that no harm may be caused to him thereby, and if he refuses 
he shall give an indemnity for any damage arising by reason of it and he may, without the 
need for a court order, remove that which extends into his property even by cutting it if 
there is no other way of removing it, and he shall not be liable.  
(2) This provision shall apply to the roots of a tree extending into another's land.

Article (1142 ) 
The owner of a building may require that his neighbour be prevented from planting a tree 
next to his building if the tree is of a kind that has spreading roots, and he may require that it 
be u prooted if it has been planted.

Article (1143 ) 
(1) A neighbour may not compel his neighbour to put up a wall or anything else on the boundary of his property nor to cede part of the wall or the ground on which the wall stands.  
(2) The owner of a wall may  not destroy it without strong justification if to do so would 
cause damage to the neighbour whose property is screened by the wall.

Article (1144 ) 
(1) An owner may not excessively exercise his right to an extent causing harm to the  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  263 
 property of the neigh bour.  
(2) A neighbour shall not have recourse against his neighbour for the customary and 
unavoidable detriments of neighbourhood, but may only require that such detriments be removed if they exceed the customary extent, providing that regard therein shall  be had to 
custom and the nature of the real property, the location of the properties in relation to each 
other, and the purpose for which they have been appropriated.  A permission issued by the 
competent authorities shall not derogate from the exercise of that right.  
 
3- Restriction on rights of the disponee

Article (1145 ) 
The owner may not, in making a disposition, whether by contract or bequest, impose 
conditions restricting the rights of the disponee unless such conditions are lawful and the 
purpose th ereof is the protection of a lawful interest in the disponor or the disponee or a 
third party, for a limited period.

Article (1146 ) 
Any condition preventing the disponee from disposing (of the subject matter of the 
disposition) shall be void unless the c onditions laid down in the foregoing Article are met.  
  
4- Rights of way

Article (1147 ) 
A private road, like jointly owned property, belongs to the persons who have a right of passage over it, and no person enjoying such right may build anything upon it without the 
permission of the others.

Article (1148 ) 
(1) Persons passing along a public way shall have the right to enter a private w ay if 
necessary.  
(2) The owners of a private way may not agree to sell it, divide it, or block the entrance to it.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  264

Article (1149 ) 
No persons other than those together owning a private way may open doors open it, or pass 
over it.

Article (1150 ) 
If one of the owners of a private way blocks his door leading on to it, his right to pass over it shall not lapse and it shall be permissible for him and his successors to reopen it.

Article (1151 ) 
The costs of repairing a private way shall be borne by a ll of the owners in proportion to the 
benefit each derives from it.  
  
Part  3: Co-ownership  
1- General provisions

Article (1152 ) 
Without prejudice to the provisions relating to shares in an inheritance, each heir shall, if 
two or more acquire ownership of a thing by virtue of one of the ways by which ownership 
may be acquired without splitting the share of each of them in it, be joint owners and the 
shares of each of them shall be counted as equal in the absence of any evidence to the 
contrary.

Article (1153 ) 
(1) Each of the partners in property may dispose of his share as he wishes without the 
consent of the remaining partners, on condition that the rights of the other partners are not 
prejudiced.  
(2) If the disposition is of a discrete part of co -owned property and that part does not, at the 
time of the division, fall to the lot of the disponor, the right of the disponee shall as from the 
time of the disposition be transferred to the part allotted to the disponor by way of division,  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  265 
 if the disponee did no t know that the disponor did not own the property disposed of 
separately at the time of the contract, and he shall likewise have the right to cancel the 
disposition.

Article (1154 ) 
A co -owner of property owned in common may not dispose of his share without  the consent 
of the other co- owner if the property has blended and merged.

Article (1155 ) 
(1) In the absence of any agreement to the contrary, the management of property owned in 
common shall vest jointly in the co- owners.  
(2) If one of the co- owners und ertakes the management without any objection from the 
remainder, he shall be deemed to be their agent.

Article (1156 ) 
(1) The wishes of the majority of the co- owners as to the management of the property shall 
be binding upon them all, and a majority s hall be determined by the proportion of shares.  
(2) If the co -owners do not agree, they may elect a manager and may lay down rules for the 
management and enjoyment of the property which will apply to all of the co- owners and 
their successors, whether gener al or special, and any of them may apply to the judge to take 
such steps as are necessary for the preservation of the property, and to appoint a manager 
over it.

Article (1157 ) 
(1) Co -owners who own at least three quarters of the co- owned property may decide, in 
order to enhance the benefit of that property, to make basic changes and to alter the 
purpose for which it was intended beyond the scope of ordinary management, provided that 
they notify their decisions to the remainder of the co -owners by officia l notice, and any 
person who objects shall have the right to make an application to the judge within two 
months from the date of the notification.  
(2) The judge may, upon application being made to him, and if he agrees with the decision  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  266 
 of the majority, or der the taking of such measures as he thinks fit, and he may in particular 
decide that the dissenting co- owner be given a guarantee securing payment of such 
compensation as may be due to him.

Article (1158 ) 
Any co -owner shall have the right to take steps t o preserve the co- owned property, even 
without the agreement of the remainder of the co- owners.

Article (1159 ) 
The costs of management and preservation of the co- owned property, any taxes payable 
thereon, and all other expenses arising out of the co- ownership or which are payable on the 
property shall be borne by all of the co- owners in proportion to the shares of each.  
  
2- Termination of co -ownership

Article (1160 ) 
Division shall be the separation and specification of a co -owned share, and may take place 
by mutual agreement or by order of the court.

Article (1161 ) 
The property divided must be such as is capable of division, and owned by the co- owners 
when the division takes place.

Article (1162 ) 
Without prejudice to the provisions of other laws, a ny person wishing to leave the 
co-ownership may, if no agreement in that behalf has been made with the other co- owners, 
make an application for judicial division.

Article (1163 ) 
In order for a division by consent to be valid, all of the participants mus t agree.  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  267

Article (1164 ) 
(1) In order for a judicial division to be valid, it must be made upon the application of one of 
the owners of the co -owned shares.  
(2) A judicial division may take place notwithstanding the objection of one of the co- owners.

Article (1165 ) 
The co- owned property must be capable of division in such a way that the division does not 
destroy the benefit intended.

Article (1166 ) 
If a partition in kind is not possible or would cause damage or significant decrease in the 
value of the property to be partitioned, any co- owner may sell his share to another co -owner 
or request the judge to sell it in the manner set out in the law.  
In case of failure to sell the share, such co -owner may request to sell the property as a whole 
in the manner  set out in the law and divide the proceeds among the co- owners on a pro- rata 
basis. The judge may order to restrict the auction to co- owners first if so requested by any of 
them.  
In all cases, the request for sale shall not be accepted if it causes more damage to the other 
co-owners and no new requests for sale shall be accepted from the same person before the 
lapse of one year from the date of rejection of the previous request or the date on which the 
damage is eliminated, whichever is sooner.

Article (1167 ) 
(1) The obligees of any co- owner may object to the division, whether by consent or by order 
of the court, by giving notice to all of the co -owners if the division is to be by consent, or by 
intervening in the court proceedings if it is to be by cour t order.  
(2) The division shall not be effective as against the obligees if the co -owners have not 
included them in all the proceedings.  
(3) If the division has been effected an obligee who has not been joined may not challenge it 
save in the event of frau d.  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  268

Article (1168 ) 
If it should appear that there is a debt owed by a deceased after the division of his estate, the division shall be cancelled unless the heirs discharge the debt or they are released from it by 
the obligees, or the deceased has left o ther undivided property and the obligation is 
discharged out of it.

Article (1169 ) 
A co -owner participating in the division shall be regarded as the independent owner of the 
share devolving on him after the division.

Article (1170 ) 
A division may not b e resiled from after has been perfected, save that it shall be permissible 
for all of the co- owners to cancel and annul the division by consent and to restore the 
divided property to co- ownership between them as before.

Article (1171 ) 
The provisions governing the options of conditionality, sight and defect shall apply in the division of heterogenous and homogenous non -fungibles, but in the case of fungibles, the 
provisions of the option for defect shall apply to the exclusion of the options of conditional ­
ity and of sight.

Article (1172 ) 
(1) Any person who has been the victim of gross cheating in division by consent may apply to the judge to cancel the division and to redivide the property equitably.  
(2) In determining the degree of the cheating, the crit erion shall be the value of the divided 
property at the time of the division.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  269

Article (1173 ) 
Claims for cancellation and redivision may not be heard unless they are brought within one 
year from the date of the division.

Article (1174 ) 
A partition shall  be void if there is a third party right over the whole or part of the co -owned 
property divided, and in that event there shall be a re- division of the balance.

Article (1175 ) 
Division by a voluntary agent shall depend upon the confirmation of the co -own ers of the 
property divided, whether by word or act.  
  
3- Division of benefits of co- ownership (joint use)

Article (1176 ) 
Joint use is the division of the benefits, which may be divided according to time or place, and in the former case the co- owners shal l take turns in enjoying the whole of the co- owned 
property for a period proportionate to the share of each of them, and in the latter case each of them shall enjoy a specified proportion of the co- owned property.

Article (1177 ) 
(1) If joint use is determined by time, the period must be specified, but it need not be specified in the case of use of a part.  
(2) The co -owners shall agree upon the duration of the joint use, and if they do not agree the 
court may specify such duration as it thinks fit in accor dance with the nature of the dispute 
and the co -owned property, and it may also conduct a ballot to determine the 
commencement of the joint use in time, and to determine that part of the property in the event of joint use of the part.  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  270

Article (1178 ) 
The provisions governing the division of joint use with regard to the effectiveness thereof 
against third parties, the capacity of the participants, their rights and obligations, and means 
of proof, shall be subject to the provisions of contracts of leasing if  such provisions do not 
conflict with the nature of such division.

Article (1179 ) 
(1) If the co -owners may, during the proceedings for final division, agree that the property of 
which the use is co- owned be divided among them pending the final division.  
(2) If the co- owners cannot agree on the division of use, the court may, upon the application 
of any of the co -owners, make an order as to such division and may seek the assistance of 
experts if appropriate.

Article (1180 ) 
(1) If one of the owners of co- owned property which is capable of being divided requires 
that the property itself be divided up, and the other wishes to have shared use, the claim for division (of the property itself) shall prevail.  
(2) If one of them requires that there should be shared use without any of them requiring 
division (of the property itself) and the others object, there must be shared use.  
(3) If one of the co- owners requires shared use of co- owned property which cannot be 
divided up, and the other objects, then the request f or shared use shall prevail.

Article (1181 ) 
Shared use shall not become void upon the death of one of the owners of shares or upon the 
death of them all, and the heirs of the deceased shall take his place.  
  
4- Mandatory co -ownership

Article (1182 ) 
Subj ect to the provisions of Articles 1165 and 1166 of this Law, the co -owners of co- owned  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  271 
 property may not require that it be divided up if it appears that the purpose for which such 
property was intended is such that it must always remain under co- ownership.  
  
5- Family ownership

Article (1183 ) 
Members of a single family all having a common business or interest may agree in writing to establish a family ownership, and such ownership may consist either of an estate which they 
have inherited and which they have  agreed to place in whole or in part in family ownership, 
or of any other property known to them which they have agreed to bring into such ownership.

Article (1184 ) 
(1) It shall be permissible to agree to the establishment of family ownership for a peri od not 
exceeding 15 years, but provided that each co- owner may apply to the court for leave to 
withdraw his share from such ownership prior to the expiration of the period agreed upon, if there is strong justification for that course.  
(2) If there is no fi xed period laid down for the said ownership, each co- owner may 
withdraw his share therefrom after the expiration of six months from the day on which he gives notice to the other co- owners of his intention to withdraw his share.

Article (1185 ) 
(1) The co -owners may not require that the property be divided up so long as the family 
ownership remains in existence, and no co- owner may dispose of his share to an outsider to 
the family save by the unanimous consent of the other co -owners.  
(2) If an outsider to t he family acquires the ownership of the share of one of the co- owners 
with his consent or if that happens compulsorily, he shall not be a co -owner in the family 
ownership save by his consent and the consent of the remainder of the co- owners.  
 
   
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Article (1186) 
(1) The owners of a majority of the shares in a family ownership may appoint one or more of 
their number to manage the co -owned property, and the manager of the family -owned 
property may effect changes in the use for which the co- owned property was int ended 
whereby the means of enjoyment of such property are enhanced, in the absence of an 
agreement to the contrary.  
(2) The manager may be dismissed in the same manner in which he was appointed, and the 
court may likewise dismiss him on the application of any co -owner if there is a strong reason 
justifying such dismissal.

Article (1187 ) 
With the exception of the foregoing rules, the rules relating to co- ownership, agency and 
inheritances shall apply to family ownership.  
  
-6 Ownership of floors and apartm ents

Article (1188 ) 
(1) If there are several owners of storeys in a building or of different apartments, they shall be deemed to be co- owners of the land and of the parts of the building intended for 
common use by them all or any other part registered under such description for which, by the nature of the building, must be in common ownership, including in particular the following:  
(a) foundations and structural walls;  
(b) party walls, walls of entrances, and walls supporting the roof;  
(c) ventilation ducts  for amenities;  
(d) roof supports, gangways, entrances, yards, ceilings, stairs and stairwells, corridors and passages, floor supports, lifts, and porters' rooms; and  
(e) heating and cooling appliances and other pipes, nozzles, drains, and installations and 
extensions used in common such as lighting and water appliances and appurtenances, and 
all that forms part of the building save those parts inside any particular floor or apartment.  
(2) All of the above shall apply in the absence of any contrary provisio n in the title deeds or  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  273 
 the law.

Article (1189 ) 
The common parts of buildings provided for in the foregoing Article may not be divided up, 
and the share of each owner in them shall be in proportion to his share in the building, and 
no owner may dispose of his share independently from the other.

Article (1190 ) 
Party walls between two apartments shall be co -owned by the owners of such apartments if 
they are not counted as a co- owned part (of the building as a whole).

Article (1191 ) 
Each owner may enjoy the use of the common parts for the purpose for which they were 
intended provided that such use does not interfere with the exercise by the remaining 
co-owners of their rights.

Article (1192 ) 
Each owner shall share in the costs of preserving, maintaining  and managing the common 
parts, and his share of the costs shall be in proportion to the value of the property that he owns unless there is a contrary provision in the rules for the management of the building, 
and any owner who causes an increase in the ex penses of the building shall be responsible 
therefor.  
An owner may not dispose of his share in the common parts in order to avoid paying his 
share of the expenses.

Article (1193 ) 
No owner may make any alteration in the common parts without the consent of  all of the 
owners even when the building is being renewed unless the alteration he makes is such as 
to increase the benefit of such parts and is not such as will alter its purpose or cause any  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  274 
 prejudice to the other owners.

Article (1194 ) 
(1) The owner of a lower floor must carry out such works and repairs as are necessary to 
prevent the collapse of the upper floor.  
(2) If he fails to carry out such repairs, the court may, upon the application of an injured party order that the necessary repairs be carri ed out, and the injured party shall have a right 
of recourse against the owner of a lower floor for any costs borne by him.

Article (1195 ) 
(1) If a building collapses, the owner of the lower floor must rebuild his lower floor as 
before, and if he fails to do so and it is built by the owner of an upper floor with his consent 
or by leave of the court, he shall have a right of recourse for the share of the owner of the lower floor in the expense.  
(2) If the owner of a lower floor fails to repair it and it is  repaired by the owner of an upper 
floor without the leave of the court or the consent of the owner of the lower floor, he shall 
have a right of recourse against the owner of the lower floor for his share of the value of the 
building at the time of the repair.  
(3) If the owner of an upper floor repairs a lower floor without reference of the owner of the 
lower floor and without ascertaining that he is failing (to repair it himself), the owner of the 
upper floor shall be deemed to have made a gift, and he sha ll have no right of recourse.  
(4) The owner of an upper floor may, in the first two cases, prevent the owner of a lower floor from disposing of it or using it until he satisfies his right, and he may also let it by leave 
of the court and recover what is du e to him out of the rent.

Article (1196 ) 
The owner of an upper floor may not increase the height of the building in such a way as to 
cause prejudice to the owner of the lower floor.  
 
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  275 
 7- Associations of owners of storeys and apartments

Article (1197 ) 
(1) Wherever there is co- ownership of real property divided into floors or flats, the owners 
may form an association as between them for the management thereof, and to ensure 
proper enjoyment thereof.  
(2) The purpose of the formation of the association may b e to build on land or to purchase it 
for the distribution of the ownership of the parts thereof among the members.  
(3) The composition, regulations, management, powers and other associated matters of such 
association shall be subject to the provisions of t he special laws made in that behalf.  
  
8- Party walls

Article (1198 ) 
If a wall is co -owned by two or more persons, none of the co- owners may make any new 
building on top of it without the consent of the others.

Article (1199 ) 
(1) A co -owner of a party wall may, if he has a serious interest in heightening it, heighten it at 
his own expense on condition that he causes no substantial prejudice to the other co -owner, 
and he must maintain the wall and make it fit to bear the load arising out of the heightening and must not adversely affect its fitness for that purpose.  
(2) If the party wall is not sufficiently strong to withstand the heightening, the co -owner who 
wishes to heighten it must rebuild the whole wall at his own sole expense, and any 
necessary thick ening must be on his side of the wall so far as possible, and the rebuilt wall 
shall, with the exception of the heightened part, remain in co- ownership without the 
neighbor  who carried out the heightening having any right to compensation.

Article (1200 ) 
A neighbor  who has not shared in the costs of heightening may become a co -owner of the 
heightened part if he pays one half of the costs and the value of one half of the land on  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  276 
 which the extra thickness stands, if it has been thickened.

Article (1201 ) 
(1) The owner of a party wall may use it for the purpose for which it was intended and may 
place beams on it to support the roof without subjecting the wall to an excess load.  
(2) If a party wall is not fit for the purpose for which it is usually intended, the costs of repairing or renewing it shall be borne by the co- owners in proportion to the share of each 
of them in it.

Article (1202 ) 
A wall which at the time it was built divides two buildings shall be deemed to be co- owned 
up to the middle line in the absence of any contrary indication.  
  
Chapter Two:  Means of acquisition of ownership  
Part  1: Acquisition of ownerless ("permitted") things  
(1) Moveables

Article (1203 ) 
Whoever takes possession of an ownerless moveable with the intention of becoming the own er, shall in fact become the owner thereof.

Article (1204 ) 
(1) A moveable shall become ownerless if the owner thereof abandons it with the intention of abandoning his ownership.  
(2) Wild animals shall be deemed to be ownerless so long as they remain at l iberty, and 
domesticated animals in the habit of returning to the place allocated for them but which then lose that habit shall become ownerless.

Article (1205 ) 
(1) Treasures found in land belonging to a particular person shall be  owned by him, but he  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  277 
 must give one fifth thereof to the state.  
(2) Treasures found in land owned by the state shall be owned by the state in their entirety.  
(3) In respect of land subject to a valid waqf, property discovered on it shall belong to the 
waqf  authority.

Article (1206 ) 
Minerals found in the ground shall belong to the state, notwithstanding that such minerals are on (privately) owned property.

Article (1207 ) 
Special laws shall b e passed governing treasures and minerals, and likewise rights of hunting 
and fishing, lost property and antiquities.

Article (1208 ) 
Articles washed up by the sea which no owner comes forward to claim shall belong to the 
person finding them and who has i nitially taken possession of them, and if they were 
formerly owned by a Muslim or a dhimmi (a non -muslim lawfully resident in a muslim 
jurisdiction), then one fifth of such property shall go to the treasury and the remainder shall 
belong to the finder, and if the former owner was a Muslim or a dhimmi, ownership shall 
revert to him if he is known, and if he is not known the provisions relating to lost property 
shall apply. 
  
2- Immoveables

Article (1209 ) 
(1) Uncultivated (and ownerless) land shall belong to the state.  
(2) It shall not be permissible to acquire ownership or take possession of such land without 
the permission of the state in accordance with the law.  
  
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  278

Article (1210 ) 
Undeveloped land is land which is not allocated to any ownership or any partic ular use, but 
it may become so allocated by being developed or becoming part of the precincts of a town, 
well, tree or house.

Article (1211 ) 
(1) Whoever cultivates or develops undeveloped land with the consent of the appropriate authorities shall be the owner thereof.  
(2) The competent authority may permit the development of land subject to a grant only of the right of use but not of ownership.

Article (1212 ) 
If a person develops part of the land he has been authorised to develop and leaves the rest, he shall be the owner of the developed part to the exclusion of the remainder unless the part 
left is encircled by land which he has developed.

Article (1213 ) 
By the development of undeveloped land shall be meant the erection of buildings or 
planting thereon, boring for water, or the like, and it shall, by the develop­ ment thereof, 
become the property of the person who has developed it, and if th e work done is obliterated 
thereafter and the land is developed by another person a substantial time after the 
obliteration, the land shall become the property of the second person to develop it, and it 
shall likewise become his property if he develops it prior to the expiration of a substantial 
length of time after the obliteration, and the original developer remains silent without any 
reasonable cause after he becomes aware (of the new development), and if he does not 
remain silent or there is a reasonabl e cause for his remaining silent, the land shall remain his 
property and the second developer shall be entitled to the value of his development which 
remains in place if he was unaware of the original developer, but he shall be entitled to  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  279 
 nothing if he had such knowledge.

Article (1214 ) 
The precincts of a town shall include the entrances and exits, places for gathering firewood, 
and the pastures, and the precincts of a house shall consist of such part as the persons 
resident there make use of, and a compound on which a house stands shall be used by the 
residents of each house in such a way as not to prejudice the enjoyment of their neighbours.  The precincts of a well is the area used by those who come to drink at it or draw 
water from it, and shall include the area where the erection of any thing towards would disturb those who come to use it would affect the water.  The precinct of a tree is such area 
as is required to water it, and over which its roots and branches spread, and on which the erection of a ny thing would affect its growth.  The people living in a town or a house, or the 
owner of a well or a tree, shall be the owners of the precincts, and they may prevent other 
people using it or erecting any thing on it.

Article (1215 ) 
(1) Whoever owns lan d by purchase, inheritance or gift from a person who has developed it, 
in circumstances where the development has become obliterated, shall remain the owner 
thereof notwithstanding the obliteration, and notwithstanding the passage of a long time 
after the obliteration.  
(2) If another person develops such land, he shall not by developing it become the owner thereof save by prescriptive rights of possession where the conditions necessary therefor are 
satisfied.

Article (1216 ) 
(1) The fencing off of undeveloped land shall not be regarded as a development thereof.  
(2) If any person does fence off undeveloped land, he shall be regarded as having a better 
right to it for a period of three years, but if he does not develop it within that period it shall 
be permis sible to give it to another person on condition that he does develop it.  
   
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Article (1217 ) 
If a person digs a well on undeveloped land with the consent of the appropriate authority, he 
shall be the owner thereof.  
  
 
 
 
Part  2: Guarantees

Article (1218 ) 
Property guaranteed shall become owned by virtue of the guarantee, such ownership being 
retrospective to the time at which the cause of ownership arose, provided that the subject 
matter must have been capable of being owned at the commencement of such peri od. 
  
Part  3: Inheritance and liquidation of estates  
1- General provisions

Article (1219 ) 
(1) An heir shall acquire by way of inheritance land, chattels and rights vested in the estate.  
(2) The definition of heirs and the determination of their shares in t he inheritance, as well as 
the transfer of the estate, shall be subject to the provisions of the Islamic Shari'a and the laws passed giving effect thereto.  
  
2- The estate 
a- General provisions

Article (1220 ) 
(1) If the testor has not appointed an executor  for his estate, any person concerned may 
apply to the court for the appointment of an executor unanimously elected by all of the heirs from among their number, or a third party, and if the heirs are not unanimous in the election 
of any person, the court shall make such election after hearing their representations.  
(2) Regard shall be had to the application of special laws if the heirs include an unborn baby,  
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 a person of no capacity or defective capacity, or an absent person.

Article (1221 ) 
If the testor has appointed an executor for the estate, the court must, upon the application of 
any of the persons concerned, confirm such appointment.

Article (1222 ) 
(1) A person appointed as the executor of an estat e may withdraw from his function in 
accordance with the rules governing agency.  
(2) The court may, upon the application of any party concerned or of the public prosecutor, 
or without an application being made, dismiss an executor and appoint another person  if it 
is shown that such a course is justified.

Article (1223 ) 
(1) The court must make a note in a special register of orders made appointing executors of 
an estate, or confirming them if they are appointed by the testator, or orders made in respect 
of their dismissal or withdrawal.  
(2) Such entries shall be effective in respect of third parties dealing with the heirs in 
connection real property forming part of the estate.

Article (1224 ) 
(1) The executor of an estate shall take delivery of the property  thereof after his 
appointment, and he shall liquidate it under the supervision of the court.  He may require to 
be paid remuneration as assessed by the court.  
(2) The estate shall bear the costs of the liquidation, and such costs shall have the same 
priority status as judicial expenses.  
  
  
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Article (1225 ) 
The judge must where required take all necessary steps to preserve the estate, and he may 
order that cash or financial securities and other valuables be deposited with the court within 
the jurisdiction of which the assets of the estate are situated whether in whole or in part, until the liquidation is completed.

Article (1226 ) 
The executor of an estate must pay out of the assets of the estate:  
(a) funeral costs;  
(b) sufficient and reasonable costs out of such assets to a needy heir until the liquidation is completed, after obtaining the order of the court for such expenditure, and provided that the 
expenditure shall be deducted from the portion due to each heir ou t of his share of the 
estate; and  
(c) the judge shall determine any dispute arising in this regard.

Article (1227 ) 
(1) The creditors may not, at the time of the appointment of the executor of an estate, take any proceeding against the estate, nor may they continue any proceeding already taken, 
save against the executor of the estate. (2) All proceedings already commenced against the deceased shall be suspended until all of 
the debts of the estate are settled, in the event that any party concerned so appli es.

Article (1228 ) 
No heir may prior to receiving a declaration of his share in the net estate dispose of the assets of the estate, nor may he demand any debts due to the estate or create a debt against 
it by way of set -off for a debt owed by it.

Article (1229 ) 
(1) The executor of an estate must take all steps to preserve the assets thereof, and must  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  283 
 manage the same, represent the estate in claims, and must get in the debts owed to it.  
(2) The executor of an estate shall have the same liability as an ag ent for reward 
notwithstanding that he may not in fact be working for remuneration, and the court may 
require him to submit an account of his management at specified times.

Article (1230 ) 
(1) The executor of an estate must summon the creditors and debtor s thereof to submit 
particulars of the debts due to or from them within a period of two months from the date of 
publication of such summons.  
(2) The summons must be posted on the notice board of the court within the jurisdiction of 
which the last residence of the testator was situated, and the court in which the assets of the 
estate are situated, whether in whole or in part, and it must also be published in one of the 
daily newspapers.

Article (1231 ) 
(1) The executor of an estate must, within three months of the date of his appointment, deposit with the court ordering his appointment an inventory of the assets and liabilities of the estate, and an estimate of the value of such assets, and he must notify the persons 
concerned of such deposit by registered letter.  
(2) He may apply to the court to extend that time if such a course is justified.

Article (1232 ) 
The executor of an estate may, in assessing the value of the assets of the estate and making 
an inventory thereof, use the services of an expert, and may provide proof of what is shown 
by the papers of the testator and what comes to his knowledge in connection therewith, and the heirs must notify him of any debts owed by or rights due to the estate.

Article (1233 ) 
Any breach of trust on the part of any person who commits a fraud against the assets of the  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  284 
 estate, notwithstanding that he may be an heir, shall be punishable by the penalties laid 
down in the criminal law.

Article (1234 ) 
Any dispute as to the correctness of the inventory shall be raised before the court having jurisdiction within thirty days from the date on which the inventory was deposited with the 
court.  
  
 
b- Settlement of debts of the estate

Article (1235 ) 
(1) After t he expiration of the time limit for hearing disputes as to the inventory, the 
executor of the estate shall, after obtaining the leave of the court, pay the debts in respect of which there is no dispute.  
(2) With regard to disputed debts, they shall be sett led after a final determination as to the 
validity thereof.

Article (1236 ) 
The executor of an estate must, in the event that the estate is bankrupt or will probably be 
bankrupt, suspend the settlement of any debt notwithstanding that it may not be disput ed 
until a final determination is made on all of the disputes relating to the debts of the estate.

Article (1237 ) 
(1) The executor of an estate shall pay its debts out of the rights due to it which he receives, 
and out of the cash and value of the moveables forming part of the estate, and if such value 
is insufficient, then payment shall be made out of the real proper ty. 
(2) Moveables and immoveables belonging to the estate shall be sold by auction in accordance with the procedures and times laid down for compulsory sales in the Code of 
Procedures before the Civil Courts, unless the heirs decide upon another means, and if the  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  285 
 estate is bankrupt, all of the creditors must agree to such other means agreed upon by the 
heirs, and in all cases the heirs shall have a right to participate in the auction.

Article (1238 ) 
The court may, upon the application of all of the heirs,  order that a debt secured on property 
shall become immediately payable, and may determine the amount of the debt due to the 
creditor.

Article (1239 ) 
Any heir may, after distribution of the deferred debts secured on property, pay the relevant 
amount  prior to the date of maturity.

Article (1240 ) 
Creditors who have not obtained their rights on the grounds that they have not been proved on the inventory, and who have no securities on the assets of the estate, shall have a right of 
recourse against per sons who have acquired a right in rem in good faith over such assets, 
and they shall also have a right of recourse against the heirs up to such part of the estate as 
has devolved upon them.

Article (1241 ) 
The executor of an estate shall, after settling t he debts, give effect to the dispositions of the 
testator and other encumbrances.  
 
c- Delivery and division of the assets of the estate

Article (1242 ) 
After the obligations of the estate have been dealt with, the balance of the assets shall 
devolve upon t he heirs, each in accordance with his lawful proportion.  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  286

Article (1243 ) 
(1) The executor of the estate shall deliver to the heirs such part of the assets as have 
devolved upon them.  
(2) The heirs may, immediately upon the expiration of the period laid down for disputes 
relating to the inventory of the estate, demand that the property and money not requiring to 
be liquidated, or part thereof, be delivered to them, by way of a provisional arrangement 
against submission of a guarantee, or without a guarantee .

Article (1244 ) 
The court shall, upon the application of any of the heirs or persons concerned, issue a 
certificate allocating the portions of the estate, and setting out the lawful proportion due to 
each heir.

Article (1245 ) 
Each heir may require t he executor of the estate to deliver his portion of the inheritance to 
him after dividing it from the rest unless such heir is bound to remain a co -owner by way of 
agreement or by virtue of a provision in the law.

Article (1246 ) 
(1) If the application fo r division is accepted, the executor of the estate must make such 
provision, but provided that such division shall not become final until all of the heirs have consented.  
(2) The executor of the estate must, in the absence of a unanimous agreement as to the 
division, make an application to the court to make such division in accordance with the 
provisions of the law, and the costs of such application to divide shall be deducted from the 
portions due to the heirs.  
  
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  287

Article (1247 ) 
The provisions laid down in  respect of the division of property shall apply to the division of 
an estate, and the provisions of the following articles shall likewise apply thereto.

Article (1248 ) 
If the assets of the estate include property which is exploited agriculturally, industrially or 
commercially, and is properly to be regarded as an independent economic unit, then, in the 
event that the heirs do not agree that it should continue to be so us ed and there is no third 
party right subsisting over such property, it must be allocated in whole to such of the heirs as 
demanded if they are the persons most capable of dealing with it, on condition that the 
value thereof is ascertained and deducted from the proportion of such heir in the estate, and 
if all of the heirs are equally capable of managing it, it shall be allocated to such one of them 
as gives the greatest value, but provided that it shall not be less than the fair value.

Article (1249 ) 
If upon the division of the estate one of the heirs has a debt against it, the remainder of the 
heirs shall not guarantee that debt if he becomes bankrupt after the division, unless a 
contrary agreement is made.

Article (1250 ) 
A testamentary disposition as to the division of the assets of the estate among the heirs shall be valid provided that it makes an appointment in favour of each heir or some of the heirs as 
to his proportion, and if the value of any property appointed in favour of one of them exceeds hi s entitlement to the estate, such appointment shall be regarded as a special 
testamentary disposition in his favour.

Article (1251 ) 
It shall be permissible to resile from a division deferred until after death, and such division shall become binding upon the death of the testator.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  288

Article (1252 ) 
If the division does not include the whole of the property of the testator at the time of his 
death, the assets which are not included in the division shall become the co- owned property 
of the heirs in accordance with the rules of succession.

Article (1253 ) 
If one or more of the probable heirs included in the division die before the death of the testator, the separate share falling to the lot of such deceased person shall devolve as 
co-owned property upon the remainder of the heirs in accordance with the rules of 
succession, without prejudice to the mandatory provisions of succession.

Article (1254 ) 
The rules governing division generally shall apply to divisions deferred until after the death, 
with the exception of the rules relating to cheating.

Article (1255 ) 
If the property divided does not include the debts of the estate, or if it does include t hem, but 
the creditors do not agree to such division, it shall be permissible for any heir, in the absence 
of agreement with the creditors, to apply to the court for a division and for settlement of the 
debts, provided that so far as is possible the divisi on provided for by the testator, and the 
considerations upon which it is founded, shall be applied.  
  
3- Provisions relating to unliquidated estates

Article (1256 ) 
If the estate has not been liquidated in accordance with the foregoing provisions, the 
ordin ary creditors of the estate may enforce their rights or such as have been bequeathed to 
them against the real property of the estate which has been disposed of, or over which third 
property rights in rem have arisen if they have placed a restriction on it for their debts prior  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  289 
 to the registration of the dispositions.  
  
 
Part 4: Wills

Article (1257 ) 
(1) A will is a disposition by a person over his estate, deferred until after his death.  
(2) A legatee shall acquire ownership over the property bequeathed to hi m by virtue of the 
will.

Article (1258 ) 
The provisions of the Islamic Shari'a and the legislative provisions deriving therefrom shall 
apply to wills.

Article (1259 ) 
In the event of the denial of a claim under a will or an oral resilement therefrom afte r the 
death of the testator, such claim shall not be heard unless there are official documents or 
documents all written in the hand of the deceased, bearing his signature, and the same shall 
apply if the will itself or the resilement therefrom contains a c ertification of the signature of 
the testator.

Article (1260 ) 
(1) Any legal act done by a person in a terminal illness of which the intention is to make a 
gift shall be regarded as a disposition to take effect after the death, and the provisions 
governing wills shall apply thereto, by whatever name the act may have been called.  
(2) The heirs of the disponor must prove by all means that the disposition was made by their 
testator during the terminal illness.  No deed of disposition may be relied on as against the 
heirs unless the date thereof is officially proved.  
(3) I f the heirs prove that the disposition was made by their legator during a terminal illness, 
the disposition shall be deemed to have been made by way of gift unless the person to  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  290 
 whom the disposition was made proves the contrary, or if there are special provisions to the 
contrary.

Article (1261 ) 
If a person makes a disposition to one of his heirs but retains possession of the property 
which he has disposed of and of his right to use it throughout his life, the disposition shall be 
deemed to take effect aft er the death, and the provisions relating to wills shall apply thereto 
unless there is evidence to the contrary.  
 
Part  5: Acquisition by accretion 
1- Accretion to real property  
a- Accretion by operation of nature

Article (1262 ) 
Silt carried by (naturally) moving water to the land of any person shall be owned by him.

Article (1263 ) 
(1) The owner of soil which has become displaced through an act of God may make a claim 
for it if it can be ascertained, and the owner of the land of  greater value shall indemnify the 
owner of the land of lesser value for the value thereof, and he shall become the owner of such soil.  
(2) No such claim shall be heard after the expiration of one year from the occurrence of the 
incident.

Article (1264 ) 
Islands, both large and small, which are naturally, formed in water courses, shall be deemed 
to be part of the property of the state.

Article (1265 )  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  291 
 Islands, both large and small, which are formed in lakes, and likewise the silt of lakes and of 
the sea shall be deemed to be the property of the state.

Article (1266 ) 
Land rising over the sea, lakes, pools and ponds which have no owner shall be the property of the state.  
  
b- Accretion by act of persons

Article (1267 ) 
Any building, plant or work standing upon land shall be deemed to have been put there by the owner of the land at his own expense and to belong to him, unless there is evidence to 
the contr ary.

Article (1268 ) 
If an owner of land builds on his land with materials owned by a third party but without his consent, then, if the materials are still in existence and the owner demands their return, the 
land owner must return them to him, but if they have been destroyed or wasted, he must 
pay the value thereof to their owner, and in either event the owner of the land must pay compensation if appropriate.

Article (1269 ) 
If a person places a building, plant or other installation using materials he ha s, on land which 
he knows belongs to another, without the consent of the owner thereof, the owner may require that what has been placed there be removed at the expense of the person who placed it there, and if the removal would damage the land, he may become the owner 
thereof for the value which they would have had if removed.

Article (1270 ) 
If a person places a building, plant or other construction with materials of hi s on the land of  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  292 
 another claiming a lawful cause, then, if the value of the things placed and still existing is 
greater than the value of the land, the person who has placed them there may acquire 
ownership of the land at a fair value, and if the value of the land is not less than the value of the things placed there, the owner of the land may acquire ownership thereof at their 
existing value.

Article (1271 ) 
If a person erects installations with materials of his on the land of another with the consent 
of the other, then, if there is no agreement between them as to what shall happen to the 
installations, the owner of the land may not require that they be removed, and he must, if the owner of the installations does not require them to be removed, pay him the existing 
value thereof.

Article (1272 ) 
If a person plants or makes another installation with materials owned by another on the 
land of any person, the owner of the materials may not require them to be returned, but he 
shall have a right of recourse for compensation against the person who placed them there, and likewise he shall have a right of recourse against the owner of the land for an amount 
not exceeding the balance of the debt owing to the constructor out of the value of such 
installations.

Article (1273 ) 
If one of the owners of shares builds for himself on co- owned property capable of being 
divided up without the consent of the others, and the property is then divided up, then, if the 
built -up part falls to his lot he shall be the owner of it, and if it falls to the lot of another he 
may acquire the ownership thereof for the value which it would have if removed, or he may 
require the builder to demolish it.  
  
2- Accretion to chattels   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  293

Article (1274 ) 
If moveables accrue to different owners in such a  way that they cannot be separated without 
damage and there is no agreement between the owners, the court shall decide upon the 
dispute in accordance with custom and the rules of equity, having regard to any damage which may occur the state of both parties , and the good faith of each of them.  
  
Part  6: Contract

Article (1275 ) 
Ownership and other rights in rem over moveables and real property may be transferred by 
contract if the elements and conditions thereof required by law are satisfied, but without 
prejudice to the provisions of the following Articles.

Article (1276 ) 
Ownership of moveables not s pecified by type may only be transferred by specific 
appropriation.

Article (1277 ) 
Ownership of real property or other rights in rem over real property may not be transferred 
between the two contracting parties so as to be valid against a third party sav e by 
registration in accordance with the special laws.

Article (1278 ) 
An undertaking to transfer ownership of real property shall be limited to an obligation to pay 
compensation if the undertaker is in breach of his undertaking, whether the undertaking 
contains a provision to pay compensation or not.  
 
Part  7: Pre-emption  
1- General Provisions

Article (1279 )  
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 Pre-emption is the entitlement of an owner of a share in co- owned property to take the 
share of his fellow co -owner for the price negotiated in a financial commutative contract, or 
for its value in a non- financial commutative contract for the equivalent of  the customary 
market price.

Article (1280 ) 
The following shall be deemed to be pre- emptors: - 
(1) the overseer of a co -owned waqf in jointly owned real property if the donor has given 
him the right to take the share of another co- owner by way of pre- empt ion for retention; or  
(2) a person having a reversionary interest in a waqf after the expiration of the period 
thereof or after the beneficiaries have ceased to have that status, if the waqf is co -owned 
and part of jointly owned property and the co -owner s ells his share.

Article (1281 ) 
The following persons shall not have a right of pre- emption:  
(1) the beneficiary of a waqf in respect of part of property co- owned by the donor and 
another if the other co -owner sells his share notwithstanding that the beneficiary has given 
as a waqf the share of the co -owner which he wishes to take by pre- emption, unless he is the 
person having the reversionary interes t in the share endowed to him, in which case he shall 
have a right of pre -emption over it and become the owner thereof;  
(2) a neighbour in the event of the sale of adjoining land, notwithstanding that he may have a right of way over such land by way of lea se or easement; or  
(3) the overseer of a waqf in co- owned real property, if a non -endowed part is sold, 
notwithstanding that the overseer intends to make an endowment of the share which he 
wishes to take by pre- emption, unless the donor has given him the right to acquire the 
donated property by way of pre- emption for the waqf, in which case he may do so.

Article (1282 ) 
A co -owner shall have no right of pre- emption in the following cases:  
(1) crops, whether sold separately or with the land, and in the event of a sale with the land  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  295 
 the right of pre- emption shall attach to the land alone at the price agreed for it, and the crops 
shall remain for the purchaser;  
(2) a well in the event that the land it waters is divided with the well remaining in joint 
ownersh ip, and if the land is not divided then there shall be a right of pre -emption over it 
whether the co- owner sells his share thereof separately or together with his share in the 
land;  
(3) the precincts of a house or a passageway giving access to it, whether the co- owner sells 
his share of the whole of it separately or together with his share in the house if the house is divided, and the precincts or the passageway shall remain jointly owned by the co- owners, 
and if the house is not divided the right of pre- emption over the precincts and the passage 
shall exist and be appurtenant to the house; and  
(4) animals, unless they belong to jointly owned property for use to be made of them in tilling or irrigation or the like, and the co -owner sells his share  in the pr operty and the 
animals together, in which case the right of pre -emption shall exist and be appurtenant to 
the property.

Article (1283 ) 
The pre -emptee is a person who owns the share of one of the co- owners by way of full 
ownership supervening upon the own ership of the other co- owner by way of commutative 
contract, whether for money consideration or not.

Article (1284 ) 
Property subject to pre- emption is real property capable of division disposed of by contract 
by one of the co- owners notwithstanding that such contract was by way of exchange for 
similar property, or if the real property is a building or tree owned by two co- owners on 
waqf land, and if the land is not capable of division, then there shall be no right of 
pre-emption over it.

Article (1285 ) 
(1) If one of the co- owners sells his share in co -owned real property and the others take that  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  296 
 share by pre- emption, it shall be divided between them in accordance with the amount of 
the portion of each and not on a per capita basis, and if the purchaser i s one of them, they 
shall leave him his share of the pre -emption in it at the price for which he bought it, and they 
shall not take the whole of the share from him.  
(2) Shares shall be calculated as at the date of the arising of the right of pre -emption an d not 
the date of sale.

Article (1286 ) 
(1) If there are several degrees of pre- emptors, the right of pre- emption shall belong to the 
person participating with th e seller of the real property subject to pre- emption in the 
distribution of an estate, and if his right thereto lapses it shall devolve on the heir who does 
not participate in the distribution of the estate, and if his right lapses it shall devolve upon the legatee.  In the event of the lapse of that last right, the right of pre -emption shall belong 
to the co -owner who is a stranger (to the inheritance).  
(2) Each one of such persons shall give way to the person below him in the chain of 
pre-emption and not vice versa and the heirs of each one of them shall take his place in his 
right to pre -emption, and in giving way to the person next below him in the chain of 
pre-emption.

Article (1287 ) 
(1) If there are several sales of real property subject to a right of pre -emption, and the 
pre-emptor is unaware of those several sales or if he knows of them but is absent, he shall 
have the right to elect either to take by pre- emption at the price of the sale of any part or to 
pay the price at which the purchaser in whos e possession the land was has taken it, 
notwithstanding that it is less than the price at which he purchased it, and the purchaser 
shall have a right of recourse for the excess against the seller, and if the pre -emptor knows of 
the several sales and is pre sent, he shall take at the last sale price only. 
(2) If a pre -emptor takes by sale, all subsequent rights shall be cancelled and all prior 
dispositions shall be affirmed, and any person whose purchase has been annulled shall have 
a right of recourse against the seller for the price which he has paid to him, and not for the  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  297 
 value of the property.  
(3) In all cases, if any defect appears in the land or if there is a third partyright thereover the 
purchaser shall be liable for the price at which he accepted the sale.

Article (1288 ) 
A pre -emptor shall exercise the right of pre- emption for himself and not for a third party, and 
if he does so for a third party in order  to make a gift or a charitable donation to him, the 
pre-emption shall be void and his right to take the property for himself thereafter shall lapse.

Article (1289)  
(1) The pre -emption shall become final after sale with the arising of the cause creating  the 
right of pre -emption.  
(2) A gift with a stipulation for consideration shall be treated as a sale.

Article (1290 ) 
Real property subject to a right of pre- emption must belong to the pre- emptor at the time of 
the sale of such property.

Article (1291 ) 
If there is an established right of pre -emption, it shall not lapse upon the death of the seller, 
the purchaser or the pre- emptor.

Article (1292 ) 
There shall be no pre- emption in the following circumstances:  
(a) property acquired by a gift with no consideration, charitable donation, inheritance, or by 
testamentary disposition; and  
(b) in respect of buildings and trees deliberately sold without the land upon which they 
stand, or in respect of buildings or trees  on land owned by the state.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  298

Article (1293 ) 
The right of the pre- emptor to pre- emption shall lapse in the following circumstances:  
(a) if the purchaser of the share of his co -owner makes a division or if he purchases the share 
from him or takes a lease of it, notwithstanding that he did not know that such act would 
cause the right of pre- emption to lapse;  
(b) if he sells his share notwithstanding that he sold it in ignorance of the fact that his 
co-owner had earlier sold his share;  
(c) if he fails for tw o months without good reason to demand his share in the pre- emption, 
being aware that buildings or plants have been placed upon the land by the purchaser; or  
(d) if without good cause he fails to demand his right of pre- emption for a period of two 
months from the time he learns of the sale by his co- owner of his share if he is present in the 
country, and from the time he returns from abroad and learns of the sale by his co- owner if 
he is abroad at the time of the sale, and if he denies his knowledge of the sale and the purchaser alleges that he was aware of it, his denial of knowledge shall be accepted on his 
oath.

Article (1294 ) 
If the real property is subject to a right of pre- emption is sold in one deal, the pre- emptor 
shall have the option either to take the whole of it or to leave it to the purchaser, but he may 
not take part of it to the exclusion of another part save by the consent of the purchaser 
whether the land sold was one share or several shares, and whether there was one 
purchaser or seller, or several.

Article (1295 ) 
If any of the pre- emptors waives his right to take by pre- emption or if he is absent before 
taking his right of pre -emption, the remainder or those of them who are present may take 
the whole of the property su bject to pre- emption or may leave the whole of it, and they may  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  299 
 not take part to the exclusion of another part save with the consent of the purchaser.  
In the event that the person present elects to take the whole of the land subject to the right 
of pre- emp tion, the provisions of the following Article shall be observed.

Article (1296 ) 
(1) If any of the pre -emptors is absent before exercising his right of pre -emption and those 
who are present take the whole of the real property subject to that right, and th en one of 
those absent arrives, he may take his share in the property from those who were present on the basis of such property being divisible into two parts only, and if a third pre- emptor 
arrives, he may take his share on the basis that the property is divisible into three parts, and 
if a fourth pre -emptor arrives he may take his share on the basis that the property is divisible 
into four parts, and so on. (2) The liability for the price of what they have taken in the event of the existence of any 
third party right or of a defect appearing shall be that of the purchaser notwith ­standing 
that the seller has discharged him from the sale before he takes the property purchased from 
him by way of pre- emption.

Article (1297 ) 
Claims for pre -emption shall not be heard:  
(1) if the sale has taken place by public auction under procedures laid down by law;  
(2) if the sale has been by ascendants and descendants, or between two spouses, or between 
relatives up to the fourth degree, or between relatives by marriage up to the second degree;  
(3) if the pre -emptor has waived his right expressly or by implication.  
  
 
 
2- Procedures for pre -emption

Article (1298 ) 
(1) A claim for pre -emption must be brought within two months from the date on which the  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  300 
 pre-emptor learned of the sale.  
(2) In no case shall a claim for pre -emption be heard after the expiration of six months from 
the date of registration.

Article (1299 ) 
(1) A claim for pre -emption against a purchaser shall be brought before the court within the 
jurisdiction of which the property is situated.  
(2) The court shall decide every dispute relating to the true price of the land subject to the 
pre-emption, and i t may grant the pre- emptor a period of grace of one month to pay what is 
due, failing which the right of pre- emption shall lapse.

Article (1300 ) 
(1) The purchaser may bring an action against the pre -emptor before the court for an order 
either that he exercise the right of pre- emption or that such right should lapse, and if the 
pre-emptor takes either of the aforesaid courses, he shall be bound by that course, and if he 
does not make any election, the court shall terminate his right of pre- emption.  
(2) If the pre -emptor applies for extra time to consider whether to exercise the right or allow 
it to lapse, the purchaser shall not be obliged to agree to such application.  
(3) A person who wishes to purchase may not make a claim against the pre- emptor either to 
exercise or to waive his right prior to the purchase notwithstanding that he may have had 
made such a request prior thereto, and the pre- emptor has forfeited his right of pre- emption, 
and in that event such forfeiture shall not be binding upon him.

Article (1301 ) 
Without prejudice to the rules relating to registration, the title of the pre- emptor in the sale 
shall be established by order of the court or by his taking delivery from the purchaser by 
consent.  
  
3- Procedures for pre -emption   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  301

Article (1302 ) 
The yield of real property exploited by a purchaser before it is taken from him by 
pre-emption shall belong to him until the time it is taken, and if he has leased to a third party 
before it is taken by pre- emption and the rent is payable by a lump- sum or monthly and the 
lessee has paid the rent, the pre- emptor may not cancel the lease.  The rent shall belong to 
the purchaser if the balance of the period of the lease after the land is taken by pre -emption 
does not exceed one year, and if the rent is payable monthly and the lessee has not paid the 
rent or if the balance of the period is greater than one year, then the pre- emptor may cancel 
the lease or affirm it, in which latter case the rent shall belong to him after the land is taken by pre- emption.

Article (1303 ) 
(1) The acquisition of land subject to pre- emption by order of the court or by mutual 
consent shall be deemed to be a new sale giving rise to the options of inspection and defect in favour of the pre -emptor, notwithstanding that the purchaser may h ave waived the same.  
(2) The pre -emptor shall not have the benefit of any delay in payment granted to the 
purchaser save by the consent of the seller.  
(3) If a third party right over the land arises after it is taken by pre -emption, the pre- emptor 
shall have a right of recourse for the price against the person to whom he paid it, whether the seller or the buyer.

Article (1304 ) 
(1) If the purchaser adds  to the property subject to pre- emption any of his own property, or 
if he builds or plants trees on it before the claim of pre- emption is made, the pre- emptor may 
elect either to abandon his right of pre- emption or to assume ownership of the property at 
the price thereof plus the value of what has been added or the new building or plant.  
(2) If the addition, building or planting has taken place after the claim has been made, the 
pre-emptor may abandon his right of pre- emption or require the removal of what has been 
added if appropriate, or may keep what has been added and pay the value of the added land,  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  302 
 or the value that the things newly placed on it would have had if removed.  
(3) If the land subject to a right of pre- emption has been diminished otherwise t han by the 
act of the purchaser, or by his act but for the public benefit, the pre- emptor may take it at its 
full price and shall have no claim in respect of the diminution, or he may leave it to the 
purchaser, and if the land has diminished by his act otherwise than for the public benefit 
then the price at which it is sold to the pre- emptor shall be reduced up to the amount of the 
diminution.

Article (1305 ) 
The pre -emptor may set aside all dispositions made by the purchaser notwithstanding that 
he may have endowed the pre- empted land as a waqf, or turned it into a place of worship.

Article (1306 ) 
No mortgage for security or any priority right created by or against the purchaser against the 
land subject to pre- emption shall be valid as against the pre -emptor if such right arose after 
the claim for pre- emption had been made, and the rights of the obligees shall remain as 
against the proceeds of sale of the land.  
 
Part  8: Possession  
1- General Provisions

Article (1307 ) 
(1) Possession is actual control by a person through himself over a thing or a right which 
may be dealt in.  
(2) Possession by an intermediary shall be valid if the intermediary exercises it in the name of the possessor and if his relationship with the possessor binds him to comply with his directions in connection with such possession.  
(3) A person not of the age of discretion shall acquire possession through the person representing him at law.  
(4) Possession may not be based on an act done by a person on t he grounds only that it is  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  303 
 permitted, or an act not objected to by a third party by way of toleration.

Article (1308 ) 
If possession is accompanied by duress or obtained secretly or by a trick, such possession 
shall have no effect as against the person subjected to the duress, or from whom the 
possession was concealed, or who was tricked, save from the time at which such defects ceased.

Article (1309 ) 
(1) Possession shall be deemed t o be continuous as from the time it becomes apparent by 
the use of the thing and the right by way of normal and regular use.  
(2) A person claiming to have acquired ownership by passage of time may rely on possession by a person under whom he has derived ti tle to land.  
(3) No lessee, usufructuary, bailee, or borrower, or the heirs of such persons, may make a claim (to ownership) by reason of the passage of time.

Article (1310 ) 
Possession shall  pass from the possessor to a third party if they both agree thereto, and if it is 
possible for the person to whom possession had passed to exercise control over the thing or 
the right the subject of the possession, notwithstanding that it has not been del ivered to 
him.

Article (1311 ) 
(1) If several persons dispute the possession of a thing or right; the possession shall be 
provisionally deemed to be that of the person having physical possession unless it is proved 
that he has obtained such possession in a  manner tainted by a defect.  
(2) The possession shall retain the same status as it started with when obtained, unless there 
is evidence to the contrary.  
   
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Article (1312 ) 
A person in possession of a thing shall be deemed to be acting in good faith if he is ignorant 
that he is infringing the rights of another person, and good faith shall be presumed unless 
there is evidence to the contrary.

Article (1313 ) 
(1) Good faith sh all continue to be presumed in favour of the possessor save from the time 
at which he becomes aware that his possession amounts to an infringement of a third party's right.  
(2) Likewise, the quality of good faith shall cease as from the time the possessor is notified of the defects in his possession in a statement of claim. 
(3) A person who has improperly acquired possession by duress from a third party shall be 
deemed to be acting in bad faith.

Article (1314 ) 
Possession shall cease if the possessor aband ons his actual control over the thing or right, or 
if he loses it by any other means.

Article (1315 ) 
(1) Possession shall not cease by virtue of a temporary obstacle interfering with the exercise 
of actual control over the thing or right.  
(2) No claim in  respect thereof shall be heard if such obstacle continues for a whole year and 
arises out of a new possession taking place either against the will or without the knowledge 
of the possessor.  
(3) The year shall be calculated from the time at which the new possession commenced if 
such time is evident, and from the time the first possessor became aware of it if it 
commenced secretly.  If there is any fundamental obstacle to bringing a claim, the year shall 
be calculated as from the time when it could have been  brought.  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  305

Article (1316 ) 
If a possessor brings a claim for delivery up and recovery of his possession, he may apply for 
an order restraining the defendant from placing any buildings or planting any trees on the 
disputed land so long as the claim continue s, provided that he submits sufficient security 
against any damage the defendant may suffer if it appears that the claimant was unjustified 
in bringing his claim.  
  
2- Effects of possession  
a- Passage of time in prescription

Article (1317 ) 
Whoever is in possession of chattels or unregistered land as owner thereof or who possesses a right in rem over moveables or an unregistered right in rem over real property shall, if his 
possession has continued uninterrupted for 15 years, be free of any c laims, if he denies the 
same, for ownership or claims for a right in rem from any person not having a lawful excuse 
(for having delayed bringing such claim).

Article (1318 ) 
(1) If possession arises over land or an unregistered right in rem over land, then, if the 
possession is accompanied by good faith and is at the same time based on a valid cause, the 
period of prescription for bringing claims shall be seven years.  
(2) A valid cause is a document or event proving possession of real pr operty, and the 
following shall be deemed to be valid causes:  
(a) transfer of property by inheritance or testamentary disposition;  
(b) gifts inter vivos with or without consideration; or  
(c) sale and barter.

Article (1319 ) 
(1) No claims for the principa l property of a waqf or for property inherited shall be heard if  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  306 
 they could have been brought and for the failure to bring which there is no lawful excuse, 
against a person in possession of real property who has treated it as an owner without 
dispute or in terruption for a period of thirty three years.  
(2) Ownership may not be acquired of moveables or real property owned by the state or 
public bodies of the state, nor against moveables or real property owned by charitable 
endowments, nor may any right in rem over such property be acquired by prescription.

Article (1320 ) 
(1) No claim for absolute ownership or claim for an inheritance or for a waqf bestowed on 
progeny shall be heard against a person in possession of real property if such property has 
been in the possession of him and the person from whom he acquired it by sale, gift, 
testamentary disposition or otherwise for the period laid down for the prescription of claims.  
(2) If possession exists and it is proved that it existed at a previous time, that f act shall be 
evidence that it continued between those two times unless there is proof to the contrary.

Article (1321 ) 
No person may rely on the passage of time as a bar to a claim for absolute ownership being brought if the cause by which he is in posse ssion of the land is not a cause conferring 
ownership, nor may he by his own act alter the cause of his possession nor the original act on which it is founded.

Article (1322 ) 
Passage of time barring proceedings for ownership shall not apply if the person  having the 
right and the right to claim has a lawful excuse for not having done so.

Article (1323 ) 
The passage of time shall not be interrupted if possession of real property ceases, in the 
event that the owner recovers it or makes a claim for the recovery thereof within one year.   
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Article (1324 ) 
Subject to the foregoing provisions the rules for the pr escription of claims by passage of time 
relating to rights of possession shall apply in the calculation, cessation or interruption of and 
reliance on such time limit before the courts, waiver thereof, and agreement to vary the time, 
to such extent as these  rules do not conflict with possession.  
  
b- Possession of moveables

Article (1325 ) 
(1) No claim of ownership shall be heard against a person in possession of a moveable or a right in rem over a moveable or a bearer bill if his possession is based on a val id cause and 
he is acting in good faith.  
(2) Possession shall of itself be indicative evidence of ownership unless the contrary is 
proved.

Article (1326 ) 
(1) By way of exception  to the provisions of the foregoing Article, the owner of a moveable 
or a bearer bill may, if he has lost it, or it has been stolen or misappropriated from him, 
recover it from the person in possession of it in good faith within a period of three years 
from the date of the loss, theft or misappropriation, and the provisions relating to 
misappropriated moveables shall apply to the recovery.  
(2) If the person in possession of the stolen, lost or misappropriated thing has bought it in good faith in the market,  by public auction, or by a person trading in similar things, he may 
require the person recovering that thing from him to pay the price which he has paid.  
  
c- Acquisition of fruits by possession

Article (1327 ) 
A person in posses sion in good faith shall be the owner of the fruits and benefits arising  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  308 
 during the period of his possession.

Article (1328 ) 
(1) A person in possession in bad faith shall be liable in respect of all of the fruits which he 
has received or failed to receiv e from the time at which he began to act in bad faith.  
(2) He may recover what he has spent in producing such fruits.  
  
d-Recovery of expenses

Article (1329 ) 
(1) An owner to whom his ownership is restored must pay to the person formerly in 
possession all o f the necessary expenses which he has incurred in preserving the property 
from destruction.  
(2) With regard to (unnecessary but) beneficial expenses, the provisions of Article 1270 and 
1272 of this Law shall apply.  
(3) The owner shall not be bound to reimburse expenses of a luxurious character, and the 
possessor may remove what he has installed by reason of such expenses provided that he 
restores the thing to its original condition, and the owner may retain such thing for the value 
it would have had if removed.

Article (1330 ) 
If a person acquires possession from an owner or a previous possessor and it is proved that he has reimbursed to his predecessor the expenses incurred by him, he may make a claim 
therefor from his predecessor or the person recovering possession.  
 
 
e- Liability for destruction

Article (1331 ) 
(1) If a person in possession in good faith enjoys the thing in the belief that it is his right to 
do so, he shall not be liable towards another person having a right to the thing in respect of 
such enjoyment.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  309 
 (2) A person in possession in good faith shall not be liable for any destruction or damage 
sustained by the thing save to the extent of any compensation he may have recovered or 
security obtained in respect of such destruction or damage.

Article (1332 ) 
If a person is in possession in bad faith, he shall be liable for the destruction or loss of a thing notwithstanding that the same may have occurred through no fault of his. 
  
Section 2 : Rights deriving from ownership  
Chapter One : Rights of u sufruct, use, habitation, flat space, and decision  
Part  1: Rights of enjoyment  
(1) General Provisions

Article (1333 ) 
Usufruct is a right in rem for the beneficiary to use and exploit a property belonging to oth-
ers as long as it remains as it is.

Article (1334 ) 
He acquires the right to benefit from a legal action, by pre- emption, by inheritance, or by the 
passage of time.

Article (1335 ) 
Provisions relating t o the usufruct of state -owned lands are regulated by special law.  
  
2- Effects of a right of enjoyment

Article (1336 ) 
The rights and obligations of the beneficiary shall take into account the instrument that created the usufruct right, as well as the provisions stipulated in the following articles.  
 
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  310

Article (1337 ) 
The  fruits of the thing benefited from are the right of the beneficiary for the duration of its 
benefit.

Article (1338 ) 
(1) The usufructuary may deal with the property enjoyed in the usual manner if the 
document giving rise to the usufruct imposes no rest riction.  
(2) If is subject to a restriction, the usufructuary may exercise the enjoyment by use of his 
own property, or similar property, or without it.  
(3) The owner of the reversion may object to any unlawful use or any use inconsistent with the nature o f the thing enjoyed, and may apply to the court to terminate the right of usufruct 
and to return the property to him, without prejudice to third party rights.

Article (1339 ) 
(1) The usufructuary shall, during the period of his enjoyment, be responsible f or the usual 
expenses required for the preservation of the property enjoyed, and for the maintenance thereof.  
(2) With regard to unusual expenses and major repairs other than those necessitated by the 
act of the usufructuary, they shall be borne by the owner, unless there is an agreement to the 
contrary.

Article (1340 ) 
(1) The usufructuary must exercise the care of the reasonable man in preserving the usufruct.  
(2) If the property is damaged or destroyed without any wrongful act or default on the part 
of the usufructuary, he shall not be liable therefor.

Article (1341 )  
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 The usufructuary shall be liable for the value of the thing enjoyed if it is damaged or 
destroyed after the termination of the period of the usufruct in the event that he does not 
return i t to the owner in circumstances where he could have done so, notwithstanding that 
he did not use the property after the termination of the period and notwithstanding that the 
owner may not have claimed it back.

Article (1342 ) 
(1) The usufructuary must no tify the owner:  
(a) if a third party claims a right over the property enjoyed, or if it is misappropriated;  
(b) if the property is destroyed or damaged or requires major repairs of a kind for which the owner is responsible; and 
(c) if it is necessary to ta ke steps to avert a danger which had been hidden.  
(2) If the usufructuary does not give such notice, then he shall be liable for any damage 
sustained by the owner.

Article (1343 ) 
(1)The beneficiary has the right to consume the movables that he benefits from, which 
cannot be used except by consuming them in kind. He must return the same or their value 
after the expiration of his right to benefit from them, and he must guarantee them if  they 
perish before benefiting from them, even without his transgression because it is a loan.  
(2) If the beneficiary of the aforementioned movables dies before returning them to their owner, he must guarantee the same or their value in his estate.

Article (1344 ) 
The usufruct right expires:  
(1) Upon the expiry of fifty years, unless the document establishing it stipulates another 
period.  
(2) Destruction of the property used.  
(3) By waiver of the beneficiary.  
(4) By terminating it by court ruling for misus e.  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  312 
 (5) By uniting the roles of owner and beneficiary, unless the owner has an interest in its 
survival, such as if the property was mortgaged.

Article (1345 ) 
If the specified period for usufruct has expired and the usufructed land is occupied with crops,  the land is left to the beneficiary for a similar fee until he cultivates the crops and 
reaps, unless the law stipulates otherwise.

Article (1346)  
(1) If the usufruct right ends with the destruction of the thing and payment of compensation 
or insurance, the beneficiary’s right is transferred to the compensation or insurance amount.  
(2) If the loss is not due to the owner’s fault, he is not obliged to ret urn the thing to its 
original state, but if he returns it, the usufruct right is restored to the beneficiary if the loss 
was not due to it, unless otherwise agreed upon.

Article (1347 ) 
The beneficiary’s waiver of the usufruct right does not a ffect his obligations to the owner of 
the beneficial property nor the rights of third parties.

Article (1348 ) 
A claim for a usufruct right shall not be heard by the passage of time if fifteen years have 
elapsed since it has not been used.  
 
Part  2: Rights of use of residence

Article (1349 ) 
It is permissible for the benefit to be based on the right of use, the right of residence, or both.    
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  313

Article (1350 ) 
The extent of the right of use and the right of residence is determined solely by the needs of 
the right holder and his family, taking into account the provisions of the document estab-
lishing the right.

Article (1351 ) 
It is not permissible to assign the right of use or the right of residence to others except based on an explicit condition in the document establishing the right or of extreme necessity.

Article (1352 ) 
The provisions of the usufruct right apply to the right of use and the right of residence inso-far as they do not conflict with the previous provisions and the nature of these two right s. 
  
Part  3: Rights of musataha (user of the land of another)

Article (1353 ) 
The musataha right is a real right that gives its owner the right to erect a building or plants on someone else’s land.

Article (1354 ) 
(1) A right of musataha may be acquired by a greement or by the passage of time.  
(2) It may be transferred by inheritance or testamentary disposition.  
(3) The document creating the right shall govern the rights and obligations of the person 
having the right.

Article (1355 ) 
(1) It shall be permissible to assign or pledge a right of musataha.  
(2) It shall also be permissible to create rights of easement thereover provided that they do 
not conflict with the nature thereof.  
  
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Article (1356 ) 
(1) The period of a right of musataha  may not exceed fifty years.  
(2) If no period is specified, either the owner of the right or the owner of the reversion may 
terminate the contract by giving two years' notice in that behalf to the other.

Article (1357 ) 
The owner of the r ight of musataha shall be the owner of any buildings or plants which he 
has placed upon the land, and he may dispose of them along with the right of musataha.

Article (1358 ) 
A right of musataha shall cease: 
(1) upon the expiration of the period;  
(2) if a n event occurs whereby the owner of the property and the owner of the right become 
the same person; or  
(3) if the owner of the right fails to pay the agreed consideration for a period of two years, 
unless an agreement to the contrary has been made.

Article (1359 ) 
A right of musataha shall not cease by virtue of the removal of the buildings or plants prior 
to the expiration of the period.

Article (1360 ) 
Upon the termination of a right of musataha, the provisions of Article 785 of this Law shall apply  to the buildings and plants, unless an agreement to the contrary has been made.  
  
Chapter Two : Waqfs (Charitable trusts)

Article (1361 )  
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 The provisions laid down in a special law shall apply to waqfs.  
  
Chapter Three : Rights  of easement  
Part  1: Creation of rights of easement

Article (1362 ) 
(1) An easement is a right restricting the enjoyment of real property in favour of other real 
property owned by another person.  
(2) Rights of easement may exist over public property if they are not inconsisten t with the 
use for which such property is intended.

Article (1363 ) 
(1) Rights of easement may be acquired by consent or by legal disposition or by inheritance.  
(2) Openly enjoyed rights of easement may likewise be acquired by passage of time, 
including rights of way, and canal rights and rights of passage of water, unless it is 
established that the right is unlawful, in which case the damage must be made good, for however long it has existed.

Article (1364 ) 
Any person who has given permission for the en joyment of a right of easement over real 
property owned by him may withdraw that permission whenever he wishes.

Article (1365 ) 
(1) Restrictions imposed upon the right of an owner of real property to build shall be 
regarded as rights of easement against s uch property in favour of other real property for the 
benefit of which such rights exist, unless a contrary agreement has been made.  
(2) Any transgression of those rights shall give rise to a claim that they be made good by specific performance or by compensation if such a course is shown to be appropriate.

Article (1366 )  
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 If the owner of two separate properties creates an open and evident easement between 
them, the right of easement shall remain if either or both of the two properties are 
transferred to other owners without any alteration in their condition, unless an agreement to the contrary is made.  
  
Part  2: Scope of rights of easement

Article (1367 ) 
The extent of rights of easement shall be defined in the document whereby they are created and by the custom prevailing in the place where the property concerned is, and it shall 
likewise be subject to the following provisions.

Article (1368 ) 
The owner of the dominant property may exercise his rights within lawful limits, and must 
do what is necessary for the use and maintenance of his right, without increasing the degree of burden of the easement, and he may use that right in such a manner as to cause no  more 
than minimal damage.

Article (1369 ) 
(1) The cost of works necessary for the enjoyment for a right of easement and the 
maintenance thereof shall be borne by the owner of the dominant property.  
(2) If the works also benefit the servient property, the costs of maintenance shall be borne by 
both parties in proportion to the benefit derived therefrom by each of them.  
(3) If the owner of the servient property is the person having the obligation to carry out 
those works at his expense, he shall always have  the right to discharge himself of such 
obligation by abandoning the servient property either in whole or in part to the owner of the dominant property.

Article (1370 ) 
The owner of the servient property may not do any act such as to affect the use of the right  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  317 
 of easement nor may he alter its character unless the right of easement existing over an old 
place has become more onerous for the owner of the servient property, or if he is prevented 
from carrying out useful repairs, and in that event the owner of  such property may require 
that the right be transferred to a different place in which it may be enjoyed as easily as in the 
previous place.

Article (1371 ) 
(1) If the dominant property is divided up, the right of easement shall remain in existence in 
favour of each part of it, provided that that does not increase the burden to the servient 
property.  
(2) If the right benefits only some of such parts, the owner of the servient property may 
require that it be terminated in respect of the other parts.

Article (1372 ) 
(1) If the servient property is divided up, the right of easement shall remain in existence over each part of it.  
(2) However, if the right is not in fact used over some of such parts and it is not possible to use it over those parts, the owner of each part thereof may require that the right be terminated in respect of his part.  
  
Part  3: Termination of rights of easement

Article (1373 ) 
A right of easement shall terminate upon the expiration of the period laid down therefor, or 
by virtue of the subject matter of it ceasing to exist.

Article (1374 ) 
A right of easement shall terminate if the dominant and servient properties come into one 
ownership, and shall arise again if the reason for the termination, attributable to a past 
event, ceases to exist.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  318

Article (1375 ) 
A right of easement shall terminate if it is impossible to exercise it by reason of a change in 
the condition of the servient  and dominant properties, and shall arise again if the condition 
reverts to what it was previously.

Article (1376 ) 
A right of easement shall terminate if the owner of it annuls his use of it, and notifies the owner of the dominant property that he has wit hdrawn from the use of such right.

Article (1377 ) 
A right of easement shall terminate if the purpose for which it existed in favour of the 
dominant land ceases, or if only a limited benefit remains which is incommensurate with the 
burdens imposed upon th e servient property.

Article (1378 ) 
(1) No claim for a right of easement will be heard if fifteen years elapse without the right being exercised.  
(2) If there are a number of co- owners of the dominant property, use of the easement made 
by any one of them shall interrupt the period of prescription for the benefit of the remainder 
of them, and if the period of prescription stops in favour of one of the co- owners, it shall 
likewise stop for the benefit of the others.  
  
Part  4: Certain types of easement  
1- Rights of way

Article (1379 ) 
If a right of way is established in favour of any person over land owned by another, the 
owner of that land may not prevent him from using it unless his passing over the land is an 
act performed by consent.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  319

Article (1380 ) 
The o wner of land not connected to a public highway, or land which could only be joined to 
a public highway at exorbitant or oppressive expense, shall have a right of way over 
neighbouring land to the customary extent in respect of payment of reasonable 
consideration, and such right may only be exercised over such part of the neighbouring land 
as causes the least amount of damage, and over such part as will achieve the necessary purpose.

Article (1381 ) 
If connection with a public highway is prevented by reason  of the dividing up of the land by 
a legal disposition, a right of way may only be required over parts of that land.  
  
2- Right to draw water

Article (1382 ) 
The right to draw water is the taking of turns to have the use of water for the irrigation o f 
land or crops.

Article (1383 ) 
Each person may have the use of the water sources, courses and canals which are for the 
public benefit, in accordance with the provisions laid down by special laws and regulations.

Article (1384 ) 
(1) If a person makes a stream or water course for the irrigation of his land, no other person 
shall have the right to use it save by his consent.  
(2) Nevertheless it shall be permissible for neighbouring owners to use a stream or water 
course as required for the irrigation of th eir land after the owner has satisfied his need 
therefrom, and the neighbouring owners must, in that event, share in the costs of making 
and maintaining the stream or water course in proportion to the area of their land in respect  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  320 
 of which they benefit fro m it.

Article (1385 ) 
No co- owner of a source of water or of a co- owned stream may create another channel from 
it save by the consent of the other co- owners.

Article (1386 ) 
If the owners of the right to draw water do not agree to carry out necessary repairs to the 
source of the water or tributaries or a co- owned stream, it shall be permissible to compel 
them to do so in proportion to the shares of each of them upon the application of any of them.

Article (1387 ) 
The right to draw water may be inherited,  and the benefit thereof disposed of by 
testamentary disposition, but may not be sold save with the land, nor may it be given by gift, 
or leased.  
 
3- Rights of passage of water

Article (1388 ) 
(1) A right of passage of water is the right of a land owner to have water for irrigation flow over the land of another in order to reach his land from a source remote from it.  
(2) If such right is established in favour of any person, the owners of land ov er which the 
water flows may not block its passage.

Article (1389 ) 
If a right of passage of water is established in favour of any person over the property of another and it causes damage to him, the owner of the right of passage must rep air it to 
remove the damage, and if he fails to do so the owner of the other land may do so at the 
expense of the owner of the right of passage, up to the customary limit.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  321

Article (1390 ) 
(1) Any owner of land wishing to irrigate his land from either natural or artificial sources 
which he has a right to use may create a passage of water over the land situated between his land and such sources provided that he pays immediate compensation therefor and on 
condition that such act does not substantially interfe re with the enjoyment of the 
intermediate property by the owner thereof, and if the land does sustain damage as a result 
thereof, the owner of the land may require compensation for such damage as he has 
sustained.  
(2) The owner of land must grant permissio n for the placing of the installations necessary for 
the right of passage of water to neighbouring land in consideration of compensation to be 
paid in advance, and he may have the use of such installations provided that he bears the costs of their erection  and the use he makes of them in a proportion commensurate with the 
benefit he derives therefrom.

Article (1391 ) 
If an owner of land suffers damage by reason of the installations referred to in the foregoing paragraph, he may require the persons having the benefit thereof to make good the damage caused.  
   
4- The right to free flow

Article (1392 ) 
Free flow is the flowing or drainage of water which is either unusable or exceeds the 
requirement of the land of another over which it flows.

Article (1393 ) 
(1) Low ground is subject to an accumulation of water naturally flowing from high ground 
without any human intervention in the flow.   
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 (2) The owner of the lower ground may not make a dam preventing such flow.  
(3) Likewise, the owner of the higher ground may n ot do anything which increases the 
burden on the lower ground.

Article (1394 ) 
An owner of agricultural land shall have the right to draw off unusable water or water which 
is in excess of the requirements of the land over which it flows, in consideration of 
appropriate compensation.

Article (1395 ) 
The owners of land over which water flows naturally may make use of installations for the 
drawing off of such water provided that each of them bears the cost of erecting, modifying 
and maintaining such installations in proportion to the benefit derived therefrom by each of 
them.

Article (1396 ) 
No person may create a harmful flow of water on to land owned by another or on to a public 
or private road, and the dama ge shall be made good notwithstanding that it may have been 
continuing for a long time.

Article (1397 ) 
Owners of new installations may not divert the flow of water produced thereby on to the 
land of another without his consent, unless they have a right to do so.

Article (1398 ) 
(1) An owner of land may modify the surface thereof in such a way that rain water flows on 
chis land or on to a public highway, subject to the special laws and regulations.  
(2) It shall not be permissible for him to create a flow of water on to neighbouring land,  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  323 
 unless he has an old established right to do so.  
  
Book Four: Securities Over Property  
Section 1: Pledge (or mortgage) by way of security  
Chapter One: Definition and creation of a pledge by way of security

Article (1399 ) 
A pledge by way of security is a contract whereby an obligee acquires, over real property 
allocated for the satisfaction of his debt, a right in rem whereby he shall take precedence 
over ordinary obligees and obligees subsequent in rank to him in the satis faction of his right 
out of the proceeds of such land, in the possession of whomsoever it may be.

Article (1400 ) 
A pledge by way of security may only be made by registration thereof, and the pledgor shall 
be bound to pay the costs of the contract unless a contrary agreement is made.

Article (1401 ) 
(1) The pledgor must be the owner of the land pledged, and capable of making dispositi ons 
thereover.  
(2) It shall be permissible for a pledgor to be the debtor guarantor of a specific right 
providing a pledge in favour of the obligor.

Article (1402 ) 
It shall not be permissible to pledge the property of a third party save with the consent of the 
true owner by a notarised instrument.

Article (1403 ) 
(1) It shall be permissible for a father to pledge his property to his minor child, and in the event that there is no father, the true grandfather may pledge his property held by such 
minor.   
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 (2) If the father is owed a debt by his minor son, he may take a pledge of the property of his 
child for himself.  
(3) The father or true grandfather may pledge the property of a minor for a debt owed by the 
minor himself.  
(4) He may also pledge the property of one of his minor children for another minor son of 
his for a debt owed to him by such other.  
(5) Neither the father nor the true grandfather may pledge property of the minor child for a debt owed to a person who is a stranger to the father or grandfather . 
(6) The consent of the court must be obtained in the circumstances referred to in paragraphs 
2, 3 and 4.

Article (1404 ) 
(1) It shall be permissible for a guardian with the consent of the court to pledge property of a 
minor or a person under a restricti on to a stranger for a debt owed to him by either of them.  
(2) It shall not be permissible for him to pledge his property held by a minor or person under 
a restriction, nor to take a pledge of the property of either of such persons for himself.

Article (1405 ) 
The real property pledged by way of security pledge must be present and in existence when 
the pledge is made.

Article (1406 ) 
(1) It shall not be permissible for there to be a security pledge save over real property which 
may be dealt in and sold by public auction or a right in rem over real property.  
(2) It shall be permissible for the court to set aside a contract of pledge by way of security if the land pledged has not been sufficiently described.

Article (1407 ) 
A pledge by way of security shal l include the appurtenances of the land by way of buildings,  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  325 
 growing things, and things which have become part of the land of affixation, and any new 
buildings erected on the land after the contract was made.

Article (1408) 
(1) A co -owner of co- owned pro perty may pledge his share, and the pledge shall be 
transferred, after division, to the separate share falling to his portion, having regard to the 
registration thereof with the land registry.  
(2) Sums owing to him out of the shares or the proceeds of sale  of the land shall be 
appropriated towards satisfaction of the debt for which the pledge was made.

Article (1409 ) 
The consideration for a pledge way of security must be an ascertained debt owed or promised, specified at the time of the pledge, or specifi c property which is guaranteed.

Article (1410 ) 
A pledge by way of security shall be indivisible, and each part of the real property pledged shall stand as security for the whole of the debt and each part of the debt secured by the real 
property pledged.

Article (1411 ) 
The provisions relating to pledges by way of security shall apply to moveable property which the special laws provide must be registered.  
  
Chapter Two:  Effects of a pledge by way of security  
Part  1: Effect of the pledge as between the con tracting parties  
1- In relation to the pledgor

Article (1412 ) 
A pledgor may dispose of his real property which is pledged by way of security without the same affecting the rights of the pledgee.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  326

Article (1413 ) 
(1) The pledgor shall have the right to mana ge the property pledged and to obtain the yield 
thereof up to the date on which he is compulsorily divested of ownership upon his failure to 
pay the debt.  
(2) The yield of the real property pledged shall attach to such property as from the date of divestin g of ownership.

Article (1414 ) 
The pledgor shall be the guarantor of the property pledged and he shall be liable in full for its safety until the date the debt is paid.  The pledgee may make objection to any shortfall in 
his security and may take such ste ps as will preserve his right, and shall have recourse 
against the pledgor for the costs of so doing.

Article (1415 ) 
(1) If the property pledged is destroyed or damaged through the default of the pledgor, the pledgee shall have the right to require that  his debt be paid immediately or that sufficient 
security for his debt be provided.  
(2) If the loss or damage occurs through a cause with which the pledgor had nothing to do, he may elect between providing sufficient security for the debt or discharging th e debt prior 
to the maturity date thereof.  
(3) If acts take place which are such as to expose the property pledged to destruction or 
damage or which may render the property insufficient as a security, then the pledgee may 
apply to the court for an order th at such acts cease and that steps be taken to prevent any 
damage occurring.

Article (1416 ) 
A pledge by way of security shall, upon the destruction of or occurrence of damage to the land, be transferred to the property which takes its place by way of compensation or 
insurance monies or consideration for expropriation for the public benefit, and the pledgee  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  327 
 may satisfy his right out of such property in accordance with the rank which he holds.

Article (1417 ) 
If the pledgor is a guarantor in rem, it shall not be permissible to recover the debt otherwise 
than that of the property pledged, and he may not exercise a recourse against the debtor 
prior to execution against his property.  
  
2- In relation to the obligee- pledgee

Article (1418 ) 
A pledgee of a pledge b y way of security may assign his right to another person provided 
that the debtor consents, and the deed of assignment shall be registered with the land 
registry.  
 
Article (141 9) 
(1) A pledgee may satisfy his debt out of the land pledged upon the debt fall ing due in 
accordance with the rank which he holds after taking the steps laid down in the law of 
procedures before the civil courts, and special laws.  
(2) If the land is insufficient to satisfy his debt, he may have recourse for the balance of his 
debt against the assets of the debtor as an ordinary creditor.  
  
Article (1420 ) 
(1) If it is a condition of the contract of pledge by way of security that the ownership of the 
property pledged be vested in the pledgee in consideration for his debt in the event th at the 
pledgor does not pay at the specified time, or if there is a condition that it be sold regardless 
of the legal procedures, the pledge shall be valid but the condition shall be void.  
(2) The condition shall also be void notwithstanding that it may ha ve been made by 
subsequent agreement.  
  
Article (1421 )  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  328 
 (1) A lease already granted by the pledgor shall be of no effect as against the pledgee unless 
it is proved that it antedated the pledge.  
(2) A lease granted commencing after the expiration of a lease already granted shall be of 
absolutely no effect as against the pledgee unless it is recorded in the contract of pledge.  
 
Part  2: Effects of a pledge by way of security in relation to the non- contracting parties  
1- General Provisions  
Article (1422)  
A ple dge by way of security shall be effective as against the non -contracting parties as from 
the date of registration thereof prior to third parties acquiring rights in rem over the property 
pledged.  
  
Article (1423 ) 
The effect of a pledge by way of security s hall be restricted to the sum specified in the deed 
of pledge registered with the land registry, unless there is a contrary stipulation in the law or 
by way of agreement.  
  
Article (1424 ) 
Neither an assignment of a pledge by way of security nor a waiver th ereof or of the status 
thereof shall be effective as against the non -contracting parties unless the same is noted on 
the original instrument giving rise to the right, and registered.  
2- Order of priorities  
Article (1425 ) 
(1) Debts owing to obligee- pledgee s under pledges by way of security shall be paid out of 
the proceeds of the land pledged or the property which takes its place in accordance with 
the ranking of each of them, notwithstanding that they may have effected the registration on 
the same day.  
(2) Such rank shall be noted by serial number on the registration, and if several persons 
come forward at the same time to register their pledges against one obligor and over the same land, such pledges shall be registered under one number, and those creditor s shall be  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  329 
 regarded as being of equal rank upon distribution.  
  
Article (1426 ) 
It shall be permissible for an obligee- pledgee to assign the rank of his pledge up to the 
amount of his debt to another obligee- pledgee over the same property pledged, and it sh all 
be permissible to rely, in respect of such ranking, as against that other creditor on all 
arguments upon which it would have been permissible to rely as against the original creditor save in respect of those matters connected with the expiration of the rights of the first 
creditor if such expiration took place subsequent to the assignment of his rank.  
  
Article (1427 ) 
(1) A pledge by way of security shall rank as from the date of registration thereof.  
(2) It shall retain its rank until an entry is made at the land registry indicating that it has 
expired.  
  
Article (1428 ) 
Registration of a pledge by way of security shall result in the costs of the contract and 
registration being implicitly included in the debt covered by the pledge, and at the same rank 
which it has.  
  
3- Rights of following 
Article (1429 ) 
An obligee- pledgee by way of security shall have the right to follow the property pledged 
into the hands of whomsoever may be in possession of it in order to obtain satisfaction of his debt upon maturity , in accordance with his rank.  
  
Article (1430 ) 
An obligee- pledgee by way of security may take steps to divest the ownership of the 
property pledged and to sell the same if the debt has not been paid at the due time, after  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  330 
 giving notice to the debtor and t he person in possession of the land in accordance with the 
procedures laid down in the law of procedures before the civil courts, and special laws.  
  
Article (1431 ) 
Any person in whom ownership of or another right in rem over the property pledged has 
become vested for any reason shall be deemed to be a person in possession, without his 
being personally obliged in respect of the debt covered by the pledge.  
  
Article (1432 ) 
A person in possession of land pledged by way of security may pay the debt covered by the pledge together with expenses after notification being given to him, and provided that he 
shall have a right of recourse against the debtor in respect of what he has paid and he may 
also take the place of the creditor who has obtained satisfaction of h is debt, in respect of 
such rights as he has.  
  
Article (1433 ) 
A person in possession of land pledged by way of security shall have the right to disencumber the land which has passed to him of any right in rem over it attaching by way of security for a reg istered debt, by paying the debt prior to proceedings being taken for the 
land to be sold, or at such times as are laid down by the Law of Procedures before the Civil Courts and the special laws.  
  
Article (1434 ) 
The proceedings for compulsory divesting of  ownership for non- payment of a debt shall be 
taken in accordance with the provisions of the Law of Procedures before the Civil Courts, 
and special laws.  
  
Article (1435 ) 
It shall be permissible for a person in possession of land pledged by way of securit y to  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  331 
 intervene in the proceedings for the sale of the land by auction, and if the sale is awarded to 
him and he pays the price he shall be deemed to be the owner of the land under the original 
deed of ownership, and the land shall be freed of the right reg istered.  
  
Article (1436 ) 
If the sale under the auction of land pledged by way of security is awarded to a person other than the person in possession of it, he shall acquire it under the order made in the auction, 
and may obtain satisfaction of his right from the person in possession of it.  
  
Article (1437 ) 
(1) The person in possession shall be liable for any damage or harm that may befall the land 
pledged in accordance with the rules relating to guarantees (liability) laid down in this Code.  
(2) He must re nder up the yield of the land as from the date he is given notice to pay the 
debt.  
  
Article (1438 ) 
If the proceeds of the land sold exceed the value of the debts secured, the excess shall belong to the person in possession, and his obligee- pledgees may recover their debts 
thereout.  
  
Article (1439 ) 
(1) The person in possession may have recourse by way of claim for guarantee against the 
previous owner up to the amount claimed by the successor against the person from whom he has obtained ownership by way of contract or gift.  
(2) The person in possession may also have recourse against the debtor for any amount paid in excess of amounts owing by him under the deed of ownership, whatever may be the 
cause of his having paid such excess.  He shall take the place of the creditors whose rights he 
has discharged, and in particular he shall take their place in connection with securities 
provided by the debtor to the exclusion of securities provided by persons other than the 
debtor.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  332 
  
Chapter Three:  Expiry of pledges by way of security  
Article (1440 ) 
(1) A pledge by way of security shall expire upon the expiration of the debt secured in full.  
(2) If the cause of the expiration of the debt ceases to exist, the pledge shall arise again as it 
was before without prejudice to the rights of persons acting in good faith acquired by them 
during the period between the expiration and the re- arising of the right.  
  
Article (1441 ) 
(1) A debtor may pay the debt secured by the pledge by way of security and the appurtenances thereof prior to the time for the payment of it.  
(2) If the creditor does not accept such discharge, the debtor may deposit the money with the land registry which shall, after ascertaining the value thereof, settle the amount owed by 
the debtor and deliver to him the deed of discharge and termination of the pledge, regard 
being had therein to special laws.  
  
Article (1442 ) 
The pledge shall terminate upon the sale of the property pledged in accordance with the law of procedures before the civil courts and special laws a nd payment of the proceeds to the 
obligee- pledgees in accordance with the ranking of each of them, or the deposit.  
  
Article (1443 ) 
A pledge by way of security shall expire upon the transfer of ownership of the property 
pledged to the pledgee or the transf er of the right of pledge to the pledgor, and provided that 
it shall rearise upon the cessation of the cause of its originally expiring, with retroactive 
effect.  
  
Article (1444 ) 
A pledge by way of security shall expire if the obligee- pledgee waives the sa me.  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  333 
   
Article (1445 ) 
(1) A pledge by way of security shall expire upon the destruction of the subject matter 
thereof.  
(2) The provisions relating to the destruction of property pledged as laid down in this Code 
shall be observed.  
  
Article (1446 ) 
(1) If th e limitation period for a debt guaranteed expires, it shall be permissible for the 
pledgee to apply for an order releasing the pledge.  
(2) If the land pledged is transferred to the person in possession, he may raise the defence 
that the debt secured by the pledge is time- barred if the pledgee fails without excuse to raise 
a claim against him under the pledge for a period of 15 years.  
  
Article (1447 ) 
A pledge by way of security shall not expire upon the death of the pledgor or of the pledgee, 
but shall rema in in effect with the heirs. 
  
 
Section 2:  Possessory pledges (mortgages)  
Chapter One:  Definition and creation of possessory pledges  
Article (1448 ) 
A possessory pledge is a contract giving rise to a right to retain the property in the hands of 
the obligee or the hands of a stakeholder by way of security for a right which may be 
recovered thereout in whole or in part in priority over other obligees.  
  
Article (1449 ) 
Property pledged by way of possessory pledge must be capable of delivery at the time the 
pledge is made, and capable of being sold by public auction.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  334 
   
Article (1450 ) 
(1) A pledge of fruit before ripening shall be valid, but it may only be enforced against after it 
has ripened.  If the pledgor becomes bankrupt or dies before the fruit ripens, the pledgee 
shall rank with the other creditors in obtaining satisfaction of his debt out of the other assets 
of the pledgor.  
(2) If the fruit ripens after the distribution and is sold, and the proceeds are allocated to the 
pledgee, everything which he has tak en in the distribution shall be returned to the other 
creditors if the proceeds thereof are equal to his debt.  If the proceeds are less, he shall return 
to them the excess of what he has taken, notwithstanding that he may initially have shared 
with them i n respect of the balance of his debt after the proceeds of the fruit pledged 
appropriated to him.  
  
Article (1451 ) 
It shall be permissible to pledge perishable goods for a deferred debt, and such property 
shall be retained if possible, but if not it shall be sold by public auction and the proceeds 
shall take the place of the pledge.  
 
  
Article (1452 ) 
The consideration for a possessory pledge must be an ascertained debt owed or promised, specified upon the pledge being made, or real property secured.  
  
Article (1453 ) 
In order for a possessory pledge to be perfected, the obligee or the stakeholder must take possession of it, and the pledgor may resile from the pledge prior to delivery.  
  
Article (1454 ) 
If the pledgor becomes subject to any restriction on makin g dispositions of his property  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  335 
 before the pledgee takes possession of the property pledged, the contract of pledge shall be 
void.  
  
Article (1455 ) 
The pledgor or the pledgee may agree to place the property pledged by way of possessory pledge in the hands of a stakeholder, in which event possession by the stakeholder shall 
stand as possession by the pledgee and the pledge shall be perfected upon possession being taken.  
  
Article (1456 ) 
(1) It shall not be permissible for the stakeholder to deliver the proper ty pledged to the 
pledgor or the pledgee without the consent of the other so long as the debt remains in existence, and he may recover the property if he has delivered it.  
(2) If the property pledged is lost before recovery, the stakeholder shall be liable for the 
value thereof.  
  
Article (1457 ) 
If the stakeholder dies and the pledgor and pledgee do not agree to deposit the property with another person, it shall be permissible for either of them to request the court to order that it be placed in the possess ion of a stakeholder selected by it.  
  
Article (1458 ) 
The pledgor by way of possessory pledge in respect of a debt owed by him or by another person must be the owner of the property pledged and be competent to make dispositions 
over it.  
  
Article (1459 ) 
The provisions relating to pledges by way of security set out in Articles 1403 and 1404 of 
this Code shall apply to possessory pledges.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  336 
   
Article (1460 ) 
The provisions relating to pledges by way of security set out in Article 1408 of this Code 
shall apply to  pledges of co- owned property.  
  
Article (1461 ) 
If a part of co- owned land or the like is pledged, the pledgee may take possession of the 
whole if the remainder is owned by the pledgor, and if it is owned by other parties, he may only take possession of the part pledged.    
  
Article (1462 ) 
The provisions relating to the indivisibility of property pledged by way of security for a debt 
laid down in Article 1410 of this Code shall apply to possessory pledges, and the whole of 
such property shall remain as sec urity for the whole or part of the debt.  
  
Article (1463 ) 
A possessory pledge shall include all of the appurtenances of the property pledged which would have been included in a sale.  
  
Article (1464 ) 
If the property pledged by way of possessory pledge produces a yield while in the possession of the purchaser (sic) which is distinct from it but of the same nature, such yield shall form 
part of the pledge, but if it is not of the same nature, it shall not form part of it unless it has 
been agreed in the contr act of pledge that it should do so.  
  
Article (1465 ) 
(1) It shall be permissible for property pledged by way of possessory pledge to stand as security for more than one debt ranking at the same level on condition that it is pledged 
under one contract.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  337 
 (2) The whole of the property shall be a pledge with each of the obligees in respect of his 
debt.  
  
Article (1466 ) 
(1) Property on loan may be pledged with the consent of the lending owner and upon the 
conditions laid down by him.  
(2) The lender may not recover the property pledged prior to the discharge of the debt.  
  
Chapter Two:  Effects of a possessory pledge  
Part 1:  Effects of the pledge as between the contracting parties  
1- With regard to the pledgor  
Article (1467 ) 
(1) It shall not be permissible for the pledgor to dispose of the goods pledged by way of 
possessory pledge save with the consent of the pledgee.  
(2) If such disposition is by way of sale, the right of the pledgee shall transfer to the proceeds 
of the property pledged.  
  
Article (1468 ) 
(1) If th e pledgor makes an acknowledgment in favour of a third party in respect of the 
goods pledged by way of possessory pledge his acknowledgment shall be of no effect as 
against the pledgee.  
(2) Such acknowledgment shall not affect the right of the pledgee to detain the property pledged until such time as the debt is discharged.  
  
Article (1469 ) 
The pledgor shall ensure the safety of the goods pledged and he may not do anything to them which lessens their value as security or which interferes with the exercise b y the 
pledgee of his rights.  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  338 
 Article (1470 ) 
The provisions relating to destruction of or damage to goods pledged arising out of the 
default of the pledgor or by way of unavoidable accident laid down in Article 1415 of this 
Code shall apply to possessory pledges.  
 
Article (1471 ) 
If the goods pledged are damaged or destroyed, the possessory pledge shall attach to the 
property which replaces it and the pledgee may satisfy his rights thereout in accordance 
with the provisions of Article 1416 of this Code.  
  
2- With regard to the obligee/pledgee 
Article (1472 ) 
The pledgee must keep the goods pledged by way of possessory pledge himself or with a trustee, and he must exercise the care of a reasonable man over them.  He shall be 
responsible for their loss or dest ruction unless the same is attributable to a cause in which 
he had no hand.  
  
Article (1473 ) 
The pledgee may not dispose of the goods pledged without the consent of the pledgor, and it shall not be permissible for him to dispose of them unless he is an age nt for sale.  
  
Article (1474 ) 
(1) It shall not be permissible for the pledgee to enjoy the use of the property pledged by way of possessory pledge, whether moveable or immoveable property, without the consent 
of the pledgor.  
(2) The pledgor may permit the pledgee to have the use of the property pledged provided 
that the benefit derived from it is deducted firstly from the expenses which he has incurred 
on behalf of the pledgor, and secondly from the principal amount of the debt.  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  339 
 Article (1475 ) 
It shall be  permissible for a pledgee to stipulate that he should have the beneficial use of the 
thing pledged for himself if a fixed time or purpose is laid down therefor, and the (value of 
the) benefit is to be deducted from the debt whether it be a debt by way of sale or loan, and if it is not deducted from the debt then (the pledgee) may not stipulate that he should have 
such beneficial use if the debt is by way of loan, and it shall be permissible, if the debt is by 
way of a deferred price on a sale, and that is stipulated in the contract of sale.  
  
Article (1476 ) 
If the obligee misuses the property pledged, the pledgor shall have the right to require that 
the property pledged be placed in the possession of a stakeholder.  
  
Article (1477 ) 
The pledgee may retain th e property pledged by way of possessory pledge until such time as 
his debt is discharged in full together with all appurtenances or costs thereof, and thereafter 
he must return the property pledged to the pledgor.  
  
Article (1478 ) 
(1) If the property pledg ed is lost while in the possession of the pledgee, he shall be the 
guarantor of the value thereof at the time he took possession of it.  
(2) If the value of the property is equivalent to the value guaranteed by him, the debt shall 
lapse whether the loss occ urred through the wrongful act of the pledgee or not.  
(3) If the value is greater than the debt, the debt shall lapse with regard to the pledgor, and 
the pledgee shall be liable for the balance if the loss was through his wrongful act or default 
in preserving the property.  
(4) If the value of the property is less than the debt, the debt shall be reduced pro tanto, and 
the obligee shall have a right of recourse for the balance of the debt as against the pledgor.  
 
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  340 
 Article (1479 ) 
A pledgee by way of possessory pledge shall have the rights of a pledgee by way of security 
pledge in executing against the property pledged and thereafter against all of the assets of 
the obligor in the event of failure to make full satisfaction of his debt as set out in Article 1419 of this Code.  
  
Article (1480 ) 
The provisions of Article 1420 of this Code shall apply to a possessory pledge.  
  
Part  2: Effects of a pledge in relation to parties other than the contracting 
parties  
Article (1481 ) 
In order for a possessory pledge to be effective as against the non -contracting parties, the 
property pledged must be in the possession of the pledgee- obligee or of a stakeholder to 
whom both parties consent.  
  
Article (1482 ) 
The pledgee may detain the property pledged in his possession until his debt is satisfied in 
full together with the appurtenances and costs thereof, and if he loses possession of the 
property through reasons beyond his control he shall have a right to recover the same.  
Article (1483 ) 
The property pledged by way of possessory pledge shall stand as security for the principal 
amount of the debt and the necessary expenses incurred by the pledgee on behalf of the pledgor, together with the costs of the contract of pledge and the enforcement thereof.  
  
Chapter Three:  Special provisions relating to certain possessory pledges  
Part  1: Possessory pledges of land  
Article (1484 ) 
A possessory pledge of land shall not be deemed to be effective as against the  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  341 
 non -contracting parties unless it is registered, in addition to the (actual) possession by the 
obligee- pledgee of the property pledged.  
  
Article (1485 ) 
(1) An obligee -pledgee may lend the land pledged by wayof possessory pledge or may lease 
it to the pledgor and provided that the land pledged shal l remain as security for payment of 
the debt, and without that affecting the effectiveness of the pledge as against the 
non‑contracting parties.  
(2) With regard to rent paid by the pledgor, the provisions of Article 1474 of this Code shall 
be followed in c onnection with an advantage obtained out of the property pledged.  
  
Article (1486 ) 
The obligee- pledgee shall discharge the necessary costs of repairing the property pledged 
and maintaining the same, as well as taxes and imposts due thereon, and provided th at he 
may deduct the same from the yield of the land pledged or from the price thereof upon sale, 
in accordance with the rank of his debt.  
  
Part  2: Pledges of moveable property  
Article (1487 ) 
A pledge of moveable property by way of possessory pledge shall not be deemed to be 
effective as against the non -contracting parties unless an instrument is made of fixed date 
setting out the debt, and the property pledged, together with the fact of the tr ansfer of 
possession to the pledgee.  
  
Article (1488 ) 
If the property pledged is threatened with loss, damage or detriment to its value, the pledgee 
shall notify the pledgor thereof, and if the pledgor does not provide another security to the 
pledgee, it s hall be permissible for each of them to apply to the court for the sale of the 
property pledged, whereupon the right of the obligee shall be transferred to the proceeds.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  342 
   
Article (1489 ) 
It shall be permissible for a pledgor to apply to the court for leave to sell the thing pledged if 
an opportunity arises to sell the same by way of a profitable contract, notwithstanding that 
that may be prior to the maturity date of the debt, and the court shall, upon granting leave, 
fix the conditions of sale and shall make a determination as to the depositing of the 
proceeds.  
  
Article (1490 ) 
The foregoing provisions shall apply to the extent that they do not conflict with commercial laws and special laws consistent with the Islamic Shari'a.  
  
Part  3: Pledges of debts  
Article (1491 ) 
A person who pledges a debt owing to him must deliver the instrument proving such debt to the pledgee.  
  
Article (1492 ) 
(1) A pledge of a debt shall not be effective as against the debtor unless he is notified of such 
pledge or he consents t hereto.  
(2) It shall not be effective as against any person other than the debtor unless the pledgee is 
in possession of the instrument evidencing the debt pledged.  
(3) The pledge shall rank as from the date on which notification or acceptance is proved to have taken place.  
  
Article (1493 ) 
A pledge of instruments in favour of a named person or promissory notes shall be made in the special way laid down by law for the assignment thereof, but provided that it shall be 
stated that the assignment has taken place by way of pledge.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  343 
   
Article (1494 ) 
It shall not be permissible to pledge a debt which cannot be assigned or attached.  
  
Article (1495 ) 
A pledgee may recover his periodical entitlements to the debt pledged and the costs 
connected therewith, and he must in that event deduct the same from the costs, and 
thereafter from the principal amount of the debt.  
 
Article (1496 ) 
The obligee- pledgee must preserve the debt pledged, and if he is entitled to recover anything 
out of that debt without the intervention of the pledgor, he must recover it at the time and 
place specified for satisfaction, and must notify the pledgor thereof.  
  
Article (1497 ) 
A debtor in respect of a pledged debt may rely as against the creditor -pledgee on defences 
relating to the validity of the right secured by the pledge, and likewise on defences which he 
may have as against his original creditor, all of the above to the sam e extent to which it 
would be permissible for the debtor, in the event of an assignment, to rely on such defences 
as against the assignee.  
Article (1498 ) 
(1) A debtor under a pledged debt must pay the debt to the pledgor and the pledgee together if it fall s due prior to the maturity of the debt secured by the pledge.  
(2) The pledgor and the pledgee may agree to deposit monies paid by the debtor with a stakeholder until the debt secured falls due, and the right arising out of the pledge shall be transferred to the monies deposited.  
  
Article (1499 ) 
If the debt pledged and the debt secured by the pledg e both become due for payment and  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  344 
 the pledgee does not obtain satisfaction of his right, it shall permissible for him to take out of 
the debt pledged that which is owed to him and to return the balance to the pledgor, 
provided that the right to which he is  entitled and the debt pledged are of the same type, 
otherwise it shall be permissible for him to require that the debt pledged be sold or that he 
become the owner thereof for its value in satisfaction of his right.  
  
Article (1500 ) 
The provisions relating  to pledges of moveable property by way of possessory pledge shall 
apply to pledges of debts, to the extent that they do not conflict with the foregoing 
provisions.  
  
Chapter Four:  Termination of possessory pledges  
Article (1501 ) 
A possessory pledge shall terminate upon the termination of the debt secured in full, and shall rearise with it if the cause for the termination of the debt ceases to exist, without 
prejudice to rights which third parties acting in good faith may have lawfully acquired 
during the p eriod between the expiry of the debt and the rearising thereof.  
  
Article (1502 ) 
A possessory pledge shall also terminate upon any of the following causes: ‑ 
(a) by a waiver by the obligee- pledgee of his right to the pledge, whether expressed or 
implied;  
(b) if the right arising out of the pledge merges with a right of ownership in the possession of 
one person, but provided that it shall arise again retrospectively if the cause (of such merger) ceases to exist; or  
(c) the destruction of the property, or the expiration of the right pledged.  
  
Article (1503 ) 
A possessory pledge shall not cease upon the death of the pledgor or of the pledgee, but  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  345 
 shall remain as a pledge with the heirs until the debt is satisfied.  
 
Section 3:  Priority rights (liens)  
Chapter One:  General provisions  
Article (1504 ) 
A priority right is a specific right over property following (such property), conferring upon 
the obligee priority status in obtaining his right in accordance with his bargain and as 
acknowledged by law.  
  
Article (1505 ) 
(1) If the law does not lay down the rank of the priority right, it shall rank below the other 
rights referred to in this Chapter.  
(2) If rights rank equally, then they shall be satisfied in proportion to each unless the law requires otherwise.  
  
Article (1506 ) 
A general priority in an obligee shall apply to all of the assets of an obligor, but a particular 
priority shall only take effect over specific real or moveable property.  
  
 
Article (1507 ) 
(1) A priority right shall not affect the rights of a person in possession of moveable property 
if he is acting in good faith.  
(2) A tenant of land shall be deemed to be a person in possession within the meaning of the 
foregoing paragraph in relation to moveable property located on the land leased, and a hotelier sh all also havethat status in relation to the belongings of the guests.  
(3) A person having a priority right over moveable property may, if he fears that it will be lost or disposed of, require that it be placed under protection.  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  346 
 Article (1508 ) 
(1) The pro visions relating to pledges for security shall apply to priority rights over real 
property, to the extent that they do not conflict with the nature thereof.  
(2) Priority rights securing rights due to the public treasury and the fees and costs of judicial 
sales shall not be registrable.  
  
Article (1509 ) 
The provisions relating to pledges for security in connection with the destruction of or damage to property shall apply to priority rights.  
 
Article (1510 ) 
Priority rights shall terminate in the same manner in which rights under pledges for security and possessory pledges may terminate, and in accordance with the provisions for 
termination of those kinds of right unless there is a provision to the contrary. 
  
Chapter  Two:  Types of priority rights  
Part  1: General provisions 
Article (1511 ) 
The rights described in the following provisions shall be priority rights with their rank 
therein, and shall be satisfied as among themselves in proportion to each of them, in  
addition to the priority rights laid down in special provisions.  
 
Part  2: General priority rights and particular priority rights over moveable 
property 
Article (1512 ) 
(1) Judicial costs expended for the common benefit of creditors in preserving the proper ty of 
the debtor and selling the same shall give rise to a priority right over the proceeds of such 
property.  
(2) Such expenses shall be recovered before any other right notwithstanding that it may be a  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  347 
 priority right or secured by a pledge by way of secur ity, including the rights of creditors who 
have expended money for their benefit, and the costs incurred in selling the property shall 
rank above the costs incurred in the proceedings for distribution.  
  
Article (1513 ) 
(1) Taxes, imposts and other rights o f any kind whatsoever owing to the government shall 
constitute a priority right upon the conditions laid down in the laws made in that behalf.  
(2) Such monies owed shall be recovered from the proceeds of property encumbered by 
such priority, in the possession of whomsoever it may be, in preference to any other right 
notwithstanding that the same may be a priority right or secured by a pledge, with the 
exception of judicial costs.  
  
Article (1514 ) 
Costs expended in preserving or repairing moveable property s hall give rise to a priority 
right thereover and shall be recovered out of the proceeds thereof after judicial expenses 
and sums owed to the public treasury.  
  
Article (1515 ) 
(1) The following rights shall stand as priority rights over all of the assets of a debtor, both 
moveable and immoveable, to the extent to which monies are due on those rights in respect 
of the last six months:  
(a) expenses incurred (by others) due by a debtor to persons who have been compelled to bear such expenses;  
(b) monies due for  the supply of food, clothing and medicine to the debtor or the person 
supporting him.  
(2) Such sums may be recovered directly after judicial costs, monies due to the public 
treasury and the costs of preserv ing and repairing property, and as between themselves shall 
be recovered in proportion to each of them.  
    
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  348 
 Article (1516 ) 
(1) The cost of seeds, manure and other fertilizing materials, insecticides, and the costs of 
sowing and harvesting shall be a priority debt over the produce in the production of which it 
has been expended, and all such expenses shall rank equally and be r ecoverable out of the 
proceeds after prior rights, if any.  
(2) Likewise, the cost of agricultural machinery and repair expenses thereof shall be a 
priority debt over it at the same rank.  
  
Article (1517 ) 
The rent for agricultural property and land for two years or for the period of the tenancy if 
less, and every other right vested in the landlord under the contract of tenancy shall 
constitute a priority right over moveable property on the property leased and owned by the 
tenant, and which may be attached, a s well as the agricultural produce.  
  
Article (1518 ) 
The priority right for the rent referred to in the foregoing Article shall attach notwithstanding that the moveable property may be owned by the wife of the tenant or a third party of 
whose right the lan dlord is unaware, without prejudice to the special provisions relating to 
stolen or lost chattels.  
   
Article (1519 ) 
(1) A priority rig ht in respect of a tenancy debt shall attach to chattels and produce which are 
on the property leased notwithstanding that they may be owned by a sub- tenant, if the 
landlord has not permitted the first tenant to lease the property to another person.  
(2) If  the lessor has permitted the first tenant to sublet the property leased to another person, 
the priority right shall only apply to money due to the first tenant by the subtenant.  
 
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  349 
 Article (1520 ) 
The landlord shall have the right to follow  property encumbered by a priority right if it is 
removed from the land leased without his knowledge or consent, and sufficient assets do 
not remain upon the land to secure the priority rights, the above being without prejudice to the rights of third parties acting in good faith over such assets, and the priority right shall 
remain in existence over property which has been carried away, notwithstanding that (the 
exercise of such right) may prejudice the rights of third parties, for a period of three years 
from the day on which they were carried away, if the landlord imposes an attachment over 
such property within thirty days from the date of asportation.  Nevertheless, if such property 
is sold to a purchaser acting in good faith in the public market or at a public auction or from 
a person dealing in such property, the landlord must return the proceeds to the purchaser.  
  
Article (1521 ) 
A debt arising out of a tenancy of agricultural land and property shall be recovered out of the 
proceeds of the property encu mbered by the priority right after the rights set out in the 
foregoing Articles, save in respect of those rights which are ineffective as against the right of 
the landlord in his capacity as a person in possession in good faith.  
  
Article (1522 ) 
(1) Monies  due to a hotelier by a guest for his board and accommodation, and monies 
expended on his account shall constitute a priority right over the belongings which the guest 
has brought to the hotel.  
(2) The priority right shall attach to the belongings notwiths tanding that they are not owned 
by the guest unless it is proved that the hotelier knew at the time they were brought into the hotel that they were subject to third party rights, but on condition that such property is not 
stolen or lost.  The hotelier may object to the removal of the belongings from the hotel so 
long as he has not been paid in full, and if the property is removed despite his objection or without his knowledge, the priority right shall remain in existence over such property 
without prejudice to rights over that property acquired by third parties acting in good faith.  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  350 
 Article (1523 ) 
The priority right of a hotelier shall rank equally with the priority right of a landlord, and if 
both rights exist simultaneously, the earlier of them in date shall be preferred unless the 
right is invalid as against the other.  
  
Article (1524 ) 
(1) The seller of moveable property shall have a priority right thereover for the price and appurtenances, and such priority right shall remain in existence so long as the  chattels retain 
their identity, but without prejudice to rights acquired by persons acting in good faith, and 
subject to the special provisions in the commercial laws.  
(2) Such priority right shall rank after the other priority rights referred to over mov eable 
property.  It shall apply as against a landlord or a hotelier if it is established that they were 
aware of the priority right of the seller at the time the chattels were brought on to the 
property leased or into the hotel.  
  
Article (1525 ) 
(1) Co -own ers of chattels shall, upon their dividing the same, have a priority right thereover 
by way of security for the rights of each of them in having recourse against the others by reason of the division and the recovery by them of their share.  
(2) The priority right of a sharing party shall have the same rank as that of the priority right 
of a seller, and the earlier in time shall prevail if there are competing ranks.  
 
 
Part  3: Priority rights over real property  
Article (1526 ) 
(1) The price and appurtenances of real property owing to a seller thereof shall have the 
status of a priority right over the property sold.  
(2) The priority right must be registered notwithstanding that the sale is registered, and it shall rank as from the date of its registration.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  351 
   
Article (1527 ) 
(1) Amounts due to contractors and building engineers who have undertaken to construct 
buildings or other installations, or to reconstruct, repair or maintain the same, shall have the status of a priority right over such structures, but to the extent to which it exceeds the value 
of the land at the time of sale, by reason of such works.  
(2) Such priority right must be registered and it shall rank as from the time of registration.  
  
Article (1528 ) 
(1) Co -owners of  land shall, upon their dividing the same, have a priority right thereover by 
way of security for the right of recourse that any of them has as against the others to recover 
his share to which he is entitled under the division.  
(2) A priority right arising out of the division must be registered, and it shall rank as from the 
date of registration.