Law No. 2 of 2025 | Effective from 29 August 2025
Abu Dhabi has enacted Law No. 2 of 2025, marking legislative shift aimed at enhancing buyer protections and strengthening regulatory oversight revising key provisions of Law No. 3 of 2015. The updated law introduces clearer controls over market practices, enhanced protections for buyers, and greater responsibilities for property owners and managers.
Key changes under the new law include a strengthened regulatory framework for buyer protection , most notably through the introduction of formal escalation procedures that must be followed before a developer may terminate a contract for nonpayment stricter oversight on escrow account use, and pre-approval requirements by the Department of municipalities Transport (DMT) for service charges. in a structural shift aimed at enhancing buyer rights, developers are no longer the sole authority in forming ownership associations instead, the law establishes a framework that empowers owners themselves to organize and participate in governance. These bodies are granted expanded powers to oversee service budgets, monitor the performance of management companies, and take part in the selection of management and maintenance providers in coordination with developers. The law also distinguishes between service fees and maintenance charges and prohibits the imposition of any unapproved payments under any designation, reinforcing accountability in common area cost recovery.
The law further clarifies that, in the absence of a specific provision under its real estate chapter on secured mortgages, the Civil Transactions Law shall apply.
Criminal penalties and substantial administrative fines have also been introduced for unlicensed activity and regulatory breaches, reinforcing the importance of compliance.
All real estate stakeholders—developers, brokers, property managers, and investors, are required to review their governance frameworks and operational procedures to ensure compliance with the law ahead of its effective date on 29 August 2025.
Get in Touch
For legal advice on navigating these developments and ensuring compliance, please contact Suneer Kumar, Head of Corporate Practice, who advises national and international clients on corporate structuring, licensing, employment, and complex commercial transactions. He has overseen the incorporation of entities across UAE free zones and mainland jurisdictions and regularly supports family groups, conglomerates, and liquidators on restructuring and cross-border matters. You can contact Suneer directly at s.kumar@alsuwaidi.ae.
You may also reach out to Vida Grace Serrano, Corporate Senior Associate, who advises clients across sectors including oil and gas, real estate, financial services, family businesses, and multinationals. With legal training in the United States, the Middle East, and Asia, she provides cross-border legal support on corporate, employment, and dispute-related matters. You can contact Vida directly at vida@alsuwaidi.ae.
Mamdouh Tawfik, Associate, is also part of the corporate team and brings wide-ranging experience in M&A, restructurings, joint ventures, employment, and commercial contracts. He has worked closely with government entities and major companies across the Gulf and previously held senior legal and governance roles. You can contact Mamdouh directly at mamdouh@alsuwaidi.ae.
Alsuwaidi & Company’s corporate team advises on a wide range of matters including regulatory compliance, investment structuring, M&A, employment, and tax strategy. We support multinational and regional businesses across sectors with practical, commercially grounded legal guidance.