However in relation to immovable property (land) in the UAE, there is a divergence between how ownership, and the transfer of ownership, is dealt with under Shari'a principles and UAE law. This issue is further compounded by the different approaches in each Emirate to registration of Islamic finance contracts such as Ijara, including whether financial institutions with foreign ownership can own (under an Ijara) property in certain areas.

So what happens when a finance party does not take legal ownership and instead relies on contractual ownership of immovable property (commonly referred to as Shari'a title) with a mortgage?

In previous articles we have highlighted the numerous positive Court judgments which have been obtained for our clients in relation to termination of Ijara to confirm the ownership of the finance party, including compensation in some cases, and enforcement of the purchase undertaking. All of these cases involved the finance party as legal owner of the property.