Know About the New Law in UAE - "the Federal Waqf Law"

The concept of Waqf has long been a matter of confusion to an extent where people didn’t want to process significant amounts of the asset through Waqf because of its somewhat unstructured law. However, things are taking a turn for the best as His Highness Sheikh Khalifa bin Zayed Al Nahyan issued the latest UAE Federal Waqf Law No. 5 of 2018 or as it is popularly known, The Federal Waqf Law.

Explaining Waqf and why people were not sure about it

To explain in detail, Waqf is the process of transferring the ownership of a property or an asset to a juristic body. From the moment of transfer, the Waqf will handle the benefits or profits gained from the assets. Now the confusion comes in deciding whether Waqf can be done for a temporary period or whether the benefits are transferable to the donor’s family. Muslim scholars were of different opinions on this matter, and the sharia law doesn’t provide enough insight into Waqf laws because there wasn’t enough valid consensus on the subject.

It’s clear why people approach Waqf with a sense of doubt because if they want to Waqf their property, there is no solid foundation for how the benefits will be managed. Also, the one who is managing the Waqf has no confirmation whether this property can be used for investment purposes. Therefore, both the founder and administrator had no solid laws to base their decisions.

The Federal Waqf Law of 2018

To put an end to all these commotions, The Federal Waqf Law was issued on June 6, 2018. The Federal Waqf Law No. 5 of 2018 contains 40 articles that are aimed towards bringing a unified code of conduct among the people. It leaves no room for error and makes the process streamlined. With the new laws, the government wanted to address three distinct elements that put many into confusion;

·         The type of assets that can come under Waqf

·         Who all are the beneficiaries of the profits/benefits gained from the Waqf

·         The administration of Waqf owned assets

First of all, the Federal Waqf Law categorizes the Waqf into three distinct types. They are;

1)      Waqf Ahli: The income or benefits gained from the asset under Waqf goes to the Waqf founder’s (waqf donor) children and their offspring.  

2)      Waqf Khayri: The income or benefits gained from the asset under Waqf must be used for developmental and humanitarian functions, like the empowerment of the poor.

3)      Waqf Mushtarak: The income or benefits gained from the asset under Waqf can be utilized for both humanitarian functions as well as by the Waqf founder’s offspring.

Another change that came with the new federal law is the provision to use the Waqf for investment and commercial use. This is a notable addition to the conventional Waqf law as previously, Waqf asset was only used for charitable purposes.  Some of the notable changes that came with the new laws are;

·         Waqf will be henceforth considered as a legal entity.

·         Waqf can be managed by an administrator of the founder’s choice

·         The administrator has the right to invest the Waqf, provided that the administrator has the permission of the founder or the approval of the competent court.

·         Waqf can be anything of value like real estate, intellectual properties or securities.

From the new set of laws put forward by the Federal Waqf Law, UAE now has a coherent and streamlined judiciary system that governs matters related to Waqf. Reviewing the new set of laws, one cannot fail to realize the similarities it has with the Waqf laws that Dubai put in place with Law No. 14 of 2017. With the Federal Waqf Law in UAE, we see a unified system of laws across the lands of Emirates.

Does the new set of Waqf Laws in UAE bring any actionable changes?

The advantages are plenty when you consider the newly opened windows that will enable investment and financial distribution possibilities. However, the major advantage is the unified law that ties up all loose ends that once kept people away from taking on Waqf related responsibilities. With the new reform, people will be more willing to handle Waqf related asset since there is a robust judiciary system backing it.

For any additional support and queries, you can reach law firms in Dubai to know more details.