The UAE’s New Civil Transactions Law: What Changes for Your Contracts, Property, Powers of Attorney and Inheritance

The Civil Transactions Law is the code that governs contracts, property rights and powers of attorney in the UAE, and sets the conflict-of-law rules for a foreigner’s estate. On 1 June 2026, Federal Decree-Law No. 25 of 2025 replaced the 1985 version.

Most commentary on the new UAE Civil Transactions Law has been written for companies. This guide is for residents, property owners, investors and owner-managers.

What the new law is and when it took effect

Federal Decree-Law No. 25 of 2025 was issued on 1 October 2025, published in Official Gazette No. 809 on 14 October 2025 and took effect on 1 June 2026. It has 1,422 articles and repeals Federal Law No. 5 of 1985. The official English text is on the UAE Legislation portal; the Arabic text prevails.

Some published guides give 1 January 2026 as the start date. That is the date the state news agency, WAM, announced the law. Article numbers below refer to the new law unless we say otherwise.

Does the new law apply to contracts signed before 1 June 2026?

Article 4(1) says the law has no retroactive effect unless it provides otherwise. Law firms that have published on the point read this as leaving earlier contracts under the 1985 law, although the text does not say so directly. It is also unclear which law governs an older contract that is amended or renewed after 1 June 2026.

Two sets of rules apply from 1 June 2026 whatever the date of the contract: the new capacity rules, which apply to everyone who meets them (Article 5), and the limitation periods, meaning the time allowed to bring a claim. The new limitation rules apply to any period still running on 1 June 2026 (Article 6).

The general 15-year period (Article 429) and the period for claims in tort (Article 258) are unchanged. Two others have changed:

• Fees of lawyers, doctors, engineers and brokers: 3 years, down from 5 (Article 431; 1985 law, Article 475).
• Latent defects in something you bought: 1 year from delivery, up from 6 months (Article 510; 1985 law, Article 555).

Where a new period is shorter, it runs from 1 June 2026, unless less time was left under the old one (Article 7). An unpaid doctor’s fee that fell due in September 2024 had until September 2029 under the 1985 law. The new 3-year period ends earlier, on 1 June 2029, so that date applies. A fee that fell due in January 2024 keeps its old deadline of January 2029, which comes first. Claims between merchants, which can include a broker’s commission, may instead fall under the Commercial Transactions Law (Federal Decree-Law No. 50 of 2022), which has its own five-year period.

Whether a 6-month defect period still running on 1 June 2026 now extends to a year is unclear, so work to the shorter one.

Powers of attorney: a sale or mortgage needs a power that names it

The 1985 law pulled both ways. Article 927(3) said a general mandate covered “all acts of exchange and disposal” except gifts, but Articles 928 and 929 said a mandate in general terms covered only management and that any other act needed a special mandate.

The new law requires a special power, naming the type of act, for anything beyond management: sale, mortgage, donation, settlement, acknowledgment, arbitration, oath and pleading (Article 870(1)). A power in general terms covers management only, including leases of up to three years (Article 871). It remains valid for that, but under the new law it does not let your attorney sell, mortgage or give away your property.

In Dubai, the Land Department already requires this. Under its Circular No. 29/R/2025 of 16 July 2025, a power used to sell or mortgage property must name the act in specific wording, such as “sale of real estate” or “real estate mortgage”, and broad wording such as “full authority to manage property” can be rejected. A power issued abroad must also be less than two years old. We have not seen official guidance on older general powers under the new law. Do not plan a sale or mortgage around a power that does not name those acts. Sign a special power that does.

A power signed outside the UAE has its own formalities, which our guide to legalising documents for use in the UAE explains.

Inheritance and wills for foreign residents

Under the Civil Transactions Law, succession still follows the deceased’s nationality at the time of death, unless a will chooses another law (Article 17). For non-Muslim residents there is a second layer: Federal Decree-Law No. 41 of 2022 on Civil Personal Status applies to their inheritance unless they adhere to their home-country law. Without a will, it gives half the estate to the spouse and half to the children in equal shares, although any heir of a foreigner can ask for the nationality rule to apply instead (Article 11 of that law). Four changes in the new Civil Transactions Law affect expatriate families.

Dual nationals: the passport you entered on

Where nationality decides the governing law, the 1985 law applied UAE law to anyone with more than one (Article 24 of that law). Article 25 now applies the law of the nationality on which the person entered the UAE. Emiratis with a second nationality remain under UAE law (Article 26). If you hold two passports, keep a record of the one you entered on and tell whoever drafts your will.

UAE property and your will

A will can choose the law that governs its substance and its form (Article 17(3) and (4)). UAE law still governs a foreigner’s will that covers real estate in the UAE (Article 17(5)), so a will dealing with property here should be drafted with UAE law in mind. Our guides explain how to register a DIFC will and where else you can register a will in the UAE.

No heirs: a waqf instead of the State

Under the 1985 law, the UAE assets of a foreigner who died leaving no heir went to the State. Article 17(2) now makes them a charitable endowment (waqf) under the competent authority. If you have no close family, raise this when you make your will.

Public order and non-Muslim estates

Article 3, which defines public order, now refers to the personal status “of Muslims” where the 1985 version referred to personal status generally. Article 29 sets a foreign law aside only if it conflicts with public order or public morals; the 1985 text (Article 27) also named Sharia. Article 3 still treats the definitive rulings of Sharia as public order. Special laws and treaties take precedence (Article 22). For a non-Muslim who dies without a will, Federal Decree-Law No. 41 of 2022 already sets the default split. These changes matter most when an heir asks for the home-country law to apply, and the courts have not yet ruled on that under the new wording. That is one more reason to make a will.

Adulthood now starts at 18

The age of majority is now 18 Gregorian years (Article 84(2)), down from 21 lunar years (1985 law, Article 85). A court may also let a minor aged 15 manage their own property (Article 149); the previous age for this was 18 Hijri years.

Because Article 5 applies the capacity rules to everyone who meets them, anyone aged 18 or over who was not already an adult became one on 1 June 2026 and, unless a court has restricted their capacity, can sign contracts in their own name. Someone who had full capacity under the old rules keeps the benefit of acts done before that date, even if the new rules would limit them (Article 5(2)).

Contracts and property deals you sign from now on

The 1985 law required good faith in performing a contract (Article 246 of that law). The new law extends it to negotiations. A party who negotiates or breaks off in bad faith pays the other side’s actual loss, though not lost profit unless agreed (Article 121). Each side must also disclose information that is decisive to the other’s consent, where the other side cannot be expected to know it or is relying on them for it. A clause limiting that duty is void, and a breach lets the other party ask for the contract to be annulled (Article 122). If you sell a flat or a share in your business, tell the buyer anything decisive to their decision.

In a hardship case, a court can now rescind the contract as well as reduce the obligation (Article 224). The 1985 law allowed only a reduction (Article 249 of that law).

In a contract with someone abroad, the law the parties expressly choose applies (Article 19). If they have not chosen, the law of their common domicile applies, and if their domiciles differ, the law of the place where the main obligation is performed. The 1985 law fell back on the place where the contract was made. Contracts over property follow the law of where the property is. Name the governing law in any cross-border contract.

Musataha rights, which let someone build on land owned by another, must be registered, and an unregistered disposition of one is void (Article 1255). Our articles on contractual clauses in Dubai real estate agreements and buying real estate in Dubai cover what else to check before you sign.

What to do now

1. Find every power of attorney you have signed or hold over UAE property. If one is in general terms and a sale or mortgage is planned, take advice before relying on it.
2. Make or update your will. Dual nationals should record the passport they entered on, and property owners should check that the will covering their UAE real estate was drafted for UAE law.
3. Review contracts you are negotiating for what you must disclose and which law governs them.
4. Diary your deadlines. Work out the new end dates for any fee or defect claim that was running on 1 June 2026.

Frequently asked questions

Is my general power of attorney still valid?
Yes, for management, including leases of up to three years. A sale or mortgage now needs a special power naming the act, and whether an older general power still works for a sale is not settled. Take advice first.

Does the new law apply to a contract I signed in 2025?
It has no retroactive effect unless it says otherwise (Article 4), but its limitation periods apply to claims still running on 1 June 2026 (Articles 6 and 7), and its capacity rules apply to everyone from that date (Article 5). If you amend or renew the contract, check which law governs it.

When did the law come into force?
On 1 June 2026. The 1 January 2026 date that still circulates is when the law was announced.

I have two passports. Which law governs my estate?
If neither is Emirati, the Civil Transactions Law points to the nationality you entered the UAE on (Article 25). A will can choose another law (Article 17(3)), UAE law governs a will covering UAE real estate (Article 17(5)), and for non-Muslims the Civil Personal Status Law (Federal Decree-Law No. 41 of 2022) may apply instead. Take advice before you make your will.

If you would like your powers of attorney, your will or a contract checked against the new law, contact our team.

This article reflects UAE law as at October 2026. It is general information, not legal advice.