
- What are the main differences between real estate law in Lebanon and other major jurisdictions?
The main difference between the real estate law in Lebanon and other jurisdictions pertains to the rights of acquisition of real estate properties in Lebanon. In a brief summary of such prominent difference, Legislative Decree No. 11614, dated January 4, 1969, concerning real estate acquisition by non-Lebanese stipulated:
- Foreigners (non-Arabs) must receive the approval of the Council of Ministers before the acquisition of real estate and,
- Arab nationals may acquire up to 5000 sq m of real estate without seeking prior approval.
However, after promulgation of the amendment of the aforesaid law through Law No. 296 of April 3, 2001, the legal terms for the acquisition of foreigners are regulated as follows:
- The rule:
All non-Lebanese persons, whether legal or natural persons and Lebanese legal persons considered by the Law as non-Lebanese as defined by Article 2 (at least one share owned by a non-Lebanese), willing to acquire any real estate right in Lebanon are required to obtain a license granted by decree from the Council of Ministers upon the proposal of the Minister of Finance.
- Exception:
There are some cases that do not require a license notably the acquisition by non-Lebanese naturals, legal persons, and Lebanese legal persons considered by the Law as non-Lebanese of built property or property set for building, of a maximum of 3.000 sq m throughout the Lebanese Territory
- Limitations:
1. It is forbidden to license non-Lebanese naturals and legal persons and Lebanese legal persons considered by the Law as non-Lebanese to acquire more than 3% of the total surface of Lebanon, providing that it would not exceed 3% of the surface of each department, or 10% of Beirut, where they are allowed to acquire up to10% of its surface. - In the following two cases, the rule is only applicable to 50% of the area owned:
- a) Partnerships or Limited Liability Companies, in cases where more than 50% of the parts are held by Lebanese partners or fully Lebanese-owned companies whose statutes prohibit the transfer of shares to non-Lebanese,
- b) Joint Stock Companies or Limited Partnerships by Shares, where more than 50%of shares are held by Lebanese partners or by fully Lebanese-owned companies whose statutes prohibit the transfer of shares to non-Lebanese.
- What are the key stages in the conveyancing process?
The conveyance process has many stages which differ depending on whether the subject at the matter is an apartment or a piece of land. The aforesaid key stages for the conveyance of an apartment are:
1- Obtaining a rental value from the ministry of finance.
2- Obtaining a swabbed sale contract from the notary public.
3- Obtaining a title deed.
4- Head to the real estate department where the transfer process occurs after the payment of the property registration fee.
However, the key stages for the conveyance of a piece of land slightly differ from the above in the following:
1- Instead of obtaining a rental value, one must obtain a statement of contents from the municipality where the land is located.
2- One must obtain a swabbed sale contract from the notary public.
3- One must obtain a title deed.
4- One must obtain a map location of the property.
5- Head to the real estate department where the transfer process occurs after the payment of the property registration fee.
- What is the key documentation required in the conveyancing process?
As mentioned above the key documentation required in the conveyance process are:
1- Rental Value.
2- Swabbed sale contract.
3- Title deed.
4- Location map of the property.
5- Statement of contents.
- Are there specific factors for a foreign investor to be aware of?
Foreign ownership in Lebanon is governed by Legislative Decree Number 11614 dated January 4, 1969, in addition to its subsequent amendment (296/2001). The ownership of real estate property in Lebanon by foreigners is subject to the below principles:
- A foreign person/individual Lebanese entity deemed as foreign can own up to 3000 square meters of land in aggregate (including built property) without a prior permit or authorization. Spouses and minor descendants are considered as one individual. The acquisition above 3000 square meters requires the approval of the Lebanese Council of Ministers. The Council issues a decree in that respect. The foreigners are granted one year to purchase and register the property. After such period the license shall be canceled.
- For foreigners aiming to complete business projects, such projects should be completed in five years renewable for one time only. Real estate and properties owned by foreigners cannot exceed the following limits:
– 3% of the total surface of the Lebanese Territory.
– 3% of the total surface of a particular regional sector (caza).
– Within Beirut, 10% of its total surface.