Host
There’s just so much more to hear. Download our podcasts at DubaiI1038.com.
Our guest today is Ludmila Yamalova from Yamalova and Plewka. Ludmila, how are you doing today?
Ludmila Yamalova
Very well, thank you, and good afternoon.
Host
Well, our topic today is all about wills. This was prompted by a question from last week. Pete texted in and said recently there was an announcement about wills, and he wants to know what’s changed. We’ll get to the topic, but we’ve already got lots of questions. So I’ll kick off with this one, Ludmila. It says:
Where do I stand with my work residence visa when the company I work for, their trade license has expired? What do I do before any issues occur?
Ludmila Yamalova
Well, as an employee, you’re not directly and immediately affected when the company’s license has expired. The expiration of a license in and of itself does not affect either the validity of the company or any of its rights and obligations otherwise, including to its employees, until obviously things progress.
So, for example, if the company—because usually, there is a grace period for the company to renew its license. After that, there are penalties that accrue to the company for not renewing the license. But in and of itself, the company does not disappear, and it’s not suspended until some time passes.
It depends on where the company is registered. Much depends on the authorities. We have not seen consistent timelines or processes across free zones or economic zones regarding when the company gets suspended. Usually, a company can even run with an expired license for over a year, and employees will continue to be sponsored the same way unless something triggers intervention.
When issues arise is when the company needs to interact with authorities—for example, when an employee needs to renew their visa. That’s when complications begin. But until such time, the expiration of the license itself is not an issue.
Host
Okay, so let’s say the worst happens and the owners of the company do run away, leaving a company in that situation. As an employee, I guess the licensing authority’s next step is to start canceling visas and residence visas. That may mean dependents too. How much time do you have? What can you do in that instance as an innocent party?
Ludmila Yamalova
That’s a multifaceted question. Authorities themselves do not start canceling visas on their own initiative until much, much later. Usually, the actions must be taken by the affected parties—in this case, the employees.
If the company owners have run away, employees need to be assertive about registering their claim with the Ministry of Labour. That would be the first step. In doing so, they can claim unpaid salaries, end-of-service benefits, or any other compensation related to the termination of employment.
Now, regarding visa cancellations, an employee cannot simply approach the immigration authorities and say, “I don’t want to work here anymore. Please cancel my visa.” Cancellation requires someone from the company to act, usually the manager listed on the trade license.
If the manager and owner are the same and they’ve both disappeared, things can get complicated. Employees will remain in limbo until all affected parties bring their cases to relevant authorities like the Labour Court, Ministry of Labour, or immigration.
Host
Alright, next question. I hope that answers everything, Andy. This one, no name attached, says:
I’ve purchased a property on a payment plan. However, we’ve now organized a mortgage before the second payment has kicked in. Both the property developer and the bank are providing conflicting information on how to get the title deed registered. What is the correct process?
Ludmila Yamalova
The question is a bit confusing, possibly because not all details are revealed. If you’ve purchased an off-plan property, then what you’re referring to as a “title deed” may actually be an Oqood.
An Oqood is an interim registration system for off-plan properties. You will not receive a title deed until the property is completed and handed over.
It is possible to get a mortgage for an off-plan property. The bank would register its interest in the Oqood system rather than the title deed system. Different banks have varying processes, but typically, this involves a tripartite arrangement among the buyer, the bank, and the land department.
Once the property is completed, the title deed will be issued, and the bank can update its interest accordingly. Until then, everything happens through the Oqood system.
Host
We’re going to focus on wills in a moment, Pete, but first, VAT questions. Kathy texted in and said:
Good evening. I have a VAT question. I took out car insurance in September and recently received a mail stating I must pay VAT for the policy from January 2018 to August. Is it correct for them to demand this since I took the policy out in September?
Ludmila Yamalova
Great question. There’s a bit of a gray area here, and it could depend on contractual interpretation. If the insurance policy does not mention additional fees like VAT, one might argue the insurer should bear that cost.
However, VAT is not a fee the insurance company collects for itself; it’s a government tax. Therefore, it is unlikely a contractual argument against paying VAT will hold up. Since VAT applies as of January 2018, policies extending into that period will incur the tax. The amount should be proportional, i.e., only for the portion of coverage that applies post-January 1, 2018.
Host
Pete texted back in with a follow-up: If I buy insurance for my car, home, or life, will I need to pay VAT? If I buy through a brokerage, do I pay VAT twice?
Ludmila Yamalova
If you purchase three separate policies from different insurers, you will pay VAT on each. If you go through a broker, VAT is usually applied once per policy—not separately for the brokerage.
Host
Coming up, we will be talking about medical insurance. There’s also a question about bounced checks—recent announcements have created some confusion. We’ll seek clarity on that too.
This is Drive Live Talks Legal. Our guest today is Ludmila Yamalova. Let’s hop through as many of these texts as we can. Ludmila, here’s one I mentioned earlier from Kumar:
With the recent announcement that bounced checks up to AED 200,000 will result in a fine rather than a prison sentence, what if someone issued me multiple checks, each below AED 200,000, but cumulatively they amount to more than AED 200,000? Would that result in a fine or a prison sentence?
Ludmila Yamalova
Great question. Let me clarify a couple of points.
First, if multiple checks are issued by the same person, they’re treated as one claim rather than separate offenses. So, if those checks collectively exceed AED 200,000, the new provision for fines rather than imprisonment would not apply. In such cases, the law would treat the total as over AED 200,000, and the penalties could include imprisonment in addition to the fine.
Second, the new law does not remove the obligation to pay the bounced check. It simply replaces the jail term for minor offenses with a financial penalty to the government. However, the issuer of the bounced check must still settle the amount owed.
Host
Can civil action still be taken after the fine or sentence is issued?
Ludmila Yamalova
Yes, but in most cases, there’s no need for separate civil action. The criminal case itself ensures that the issuer of the bounced check must pay the amount. The fines and penalties addressed by this law are separate from the debt obligation itself.
Civil action might come into play if there are other contractual disputes. For example, if you’re disputing the terms under which the check was issued or there’s a broader disagreement about the contract, you might file a civil case for resolution.
Host
Here’s a medical insurance question:
I want to add my wife to my company’s medical insurance, but they’re asking her to drop the one she already has from her employer. Does Dubai law allow someone to be insured by both their employer and their spouse’s employer?
Ludmila Yamalova
Dubai law does not prohibit individuals from holding multiple insurance policies, but in practice, most insurance companies and employers will not allow it. Insurers typically require individuals to hold only one policy at a time to prevent overlapping claims.
If your wife’s employer is asking her to waive her current coverage, this is likely a contractual requirement of their policy with the insurance provider. Unfortunately, there’s no legal obligation forcing companies or insurers to allow multiple policies. You may have to choose one policy based on which offers better coverage.
Host
Here’s a related follow-up: His wife’s employer requires her to sign a waiver, and his company wants a waiver from her current provider. Is this legal?
Ludmila Yamalova
Yes, this is perfectly legal. It’s a matter of contractual obligations rather than statutory requirements. If both companies’ policies include waivers to prevent dual coverage, it’s their prerogative to enforce this. However, the law doesn’t require waivers, so this boils down to the terms agreed upon with each insurer or employer.
Host
Let’s move to a property-related question. This person says:
I’ve purchased an off-plan property with a mortgage. The developer says I need to register it with the DLD, but the bank says it’s already registered under their interest. What’s the correct process?
Ludmila Yamalova
This is common with off-plan properties. Until the property is completed, it is registered in the Oqood system with the Dubai Land Department (DLD). Your bank registers its interest there as well, not in the title deed system, which applies to completed properties.
Once the property is finished, a title deed will be issued, and the bank’s interest will transfer to the title deed. In the meantime, make sure the Oqood reflects both your ownership and the bank’s interest accurately. This can be verified through the DLD or the developer’s records.
Host
Finally, a question on wills: Pete has been following up, asking if there’s an update on wills for non-Muslims in Dubai.
Ludmila Yamalova
Yes, there’s been a significant update. Dubai introduced Law No. 15 of 2017, which provides a framework for the management of inheritance and execution of wills for non-Muslims in Dubai. This law offers an alternative to the DIFC Wills and Probate Registry (WPR).
Now, wills can also be registered with Dubai Courts under this new system. The Dubai Courts’ registry allows non-Muslims to include real estate in their wills, which wasn’t previously possible outside the DIFC.
However, there are differences to consider:
- The DIFC WPR allows you to include guardianship provisions for minor children, while the Dubai Courts registry does not.
- Language might be an issue with Dubai Courts, as their official language is Arabic. Wills registered in DIFC are in English and do not require translation.
- Costs may differ, but those details are yet to be finalized for the Dubai Courts’ registry.
Pete, I’d recommend weighing these factors to decide where to register your will.
Host
Thank you, Ludmila, for clarifying that and for answering so many varied questions today. Always a pleasure having you on the show.
Ludmila Yamalova
Thank you—it’s always a pleasure to join you and help out.
Host
That wraps up this edition of Drive Live Talks Legal. There’s just so much more to hear—download our podcasts at DubaiI1038.com.