As real estate continues to evolve in Abu Dhabi and across the UAE, many investors are turning to Musataha agreements as a flexible way to build and develop on government-owned land. But what happens if the property collapses during the Musataha term? And what rights do buyers have if they purchase from a Musataha holder?
Here’s what you need to know as of 2025:
1. What Is Musataha?
Musataha is a long-term right—usually 25 to 50 years—that allows a party to build on and benefit from land owned by someone else. At the end of the term, the land and structures revert to the original landowner unless renewed.
2. If the Property Collapses
- The Musataha holder is responsible for reconstruction, unless covered by insurance.
- If the collapse is due to poor construction, the developer may be held liable under the 10-year decennial liability clause (UAE Civil Code Articles 880–883).
- If the contract allows termination due to force majeure or destruction, both parties can opt to end the Musataha.
3. Buyer Rights and Protections
Buyers who purchase from Musataha holders:
- Own the unit/structure, not the land.
- Have rights only within the Musataha term.
- Can seek compensation through insurance or legal claims if within the liability period.
- Must ensure clear SPAs, insurance coverage, and understanding of the Musataha expiry.
4. 2025 Legal Update: ADGM Transition
Under ADGM Real Property Regulations 2024:
- Musataha and usufruct rights in Al Reem Island are being reclassified as leases (starting Jan 1, 2025).
- Existing rights remain valid unless parties choose to renegotiate.
- The underlying contractual obligations between landowners and Musataha holders remain enforceable.
Why This Matters
Understanding the structure and legal protection of Musataha rights is essential for property investors, especially when dealing with government land. As the UAE moves toward more regulated and transparent frameworks, investors need to be more informed than ever.
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Author: Ms Yasar Abu Hejleh
