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Aldarbas, Ahmad M S (2015) The regulatory framework of the real estate sector in the Arabian Gulf countries. PhD thesis. SOAS University of London. http://eprints.soas.ac.uk/26682 Copyright © and Moral Rights for this thesis are retained by the author and/or other copyright owners. A copy can be downloaded for personal non‐commercial research or study, without prior permission or charge. This thesis cannot be reproduced or quoted extensively from without first obtaining permission in writing from the copyright holder/s. The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the copyright holders. When referring to this thesis, full bibliographic details including the author, title, awarding institution and date of the thesis must be given e.g. AUTHOR (year of submission) "Full thesis title", name of the School or Department, PhD Thesis, pagination. The regulatory framework of the real estate sector in the Arabian Gulf countries Ahmad M S Aldarbas, Thesis submitted for the degree of Doctor of Philosophy in the Law Department School of Oriental and African Studies University of London 2015 Department of Law SOAS, University of London 1 Ahmad Aldarbas Abstract Over the last fifteen years, there has been a rapid expansion in the Arabian Gulf real estate sector, where it plays a significant role in the economy of the Arabian Gulf countries, which is considered as the second biggest sector after the energy sector. The purpose and aim of this thesis is to analyse and investigate the usefulness of the current real estate regulation and whether the current regulatory rules of the real estate sector are sufficient to protect local and foreign real estate investors or not. The thesis will examine the current governing legal framework of the real estate sector in all Arabian Gulf countries. The thesis also intends to find whether the current regulatory framework of the real estate regulation in divergence or convergence among Arabian Gulf countries. This thesis intends to provide suggestions of the Laws and regulations that should be implemented to regulate properly the practices of the real estate sector in Arabian Gulf countries. The thesis will investigate the attractiveness level of the Arabian Gulf real estate markets to global real estate investors and analyse the general regulatory framework of foreign direct investment (FDI) in the Arabian Gulf region. Finally, there will be a close look at the effects of the recent financial crises on the sector and policies by way of response by the Gulf countries. To achieve the above objective, the thesis will adopt a qualitative methodology and a comparative analysis between the Arabian Gulf rules and regulations with other developed countries in order to discover the main loopholes that need reform in the Gulf real estate sector. 3 Ahmad Aldarbas Acknowledgment All praise and thanks be to Allah, the Almighty, who gave me the ability to complete this research. In addition, I would like to express special thanks for Dr Ali Fahad Alzumai for his endless support and constant encouragement during my study; My sincere thanks also goes to my supervisor Mr Ian Edge of the Law department, School of Oriental and African Studies for his support, helpful guidance and excellent supervision during these past four years. A special thanks and gratefulness should also be expressed mom and to my wife, sons and my little daughter for their endless assistance and patience during my study period. 4 Ahmad Aldarbas Table of Contents Chapter one: ......................................................................................................................... 9 The historical background of the Arabian Gulf Countries ................................... 9 1. Introduction .......................................................................................................................... 9 2. The importance and the aim of the study Purpose ............................................... 14 3. Research Question ............................................................................................................ 15 4. Hypothesis and Thesis Objectives ............................................................................... 16 5. Methodology ........................................................................................................................ 16 6. Comparative Law Methodology .................................................................................... 17 7. Primary Sources ................................................................................................................ 19 8. Secondary Sources ............................................................................................................ 19 Chapter Two: The urban development of the Arabian Gulf Countries ......... 20 1. Introduction: ....................................................................................................................... 21 2. The historical background of the urban development in the Arabian Peninsula....................................................................................................................................... 21 2.1. The population growth of the Arabian Gulf countries and causes of immigration and establishment of the cities: ............................................................................24 2.2. The beginning of the influx of population in the modern era ..............................26 3. Factors affecting the real estate development in the Arabian Gulf countries, 29 3.1. The discovery of oil and the evolution/ development of urbanisation in the Arabian Peninsula: ............................................................................................................. 29 3.1.1. The First Oil Boom .................................................................................................................31 3.1.2. The Second Oil Boom ............................................................................................................33 3.1.3. The Third Oil Boom................................................................................................................36 4. The concentration of the Development Strategies of the GCC states on real estate projects: ............................................................................................................................ 40 5. The size of the real estate sector in the Arabian Gulf countries: ..................... 44 6. The real estate bubble in the Arabian Gulf countries: ......................................... 46 7. The historical background of the legal system in the Arabian Peninsula: ... 47 7.1. The Islamic country legal system .....................................................................................47 7.2. The legal system of the Ottoman Empire ......................................................................48 7.3. The legal system of the during the British Empire ...................................................49 7.4. The French /Egyptian civil Law system ........................................................................52 7.5. The current constitutional system of the Gulf member state: .............................54 7.6. The citizens’ legislative role in the Gulf member states .........................................60 7.7. The role of the councils in the enactment of Laws ...................................................62 7.8. The source of Law: .................................................................................................................65 8. Conclusion: .......................................................................................................................... 66 Chapter THREE: The historical background of the property ownership in the Arabian Peninsula .................................................................................................... 69 1. Introduction ........................................................................................................................ 69 5 Ahmad Aldarbas 2. The conceptual background of land and property in the Islamic shari’a Law: 70 3. The concept of land ownership in Islamic Shari’ah Law and the concept Trusteeship .................................................................................................................................. 73 4. Right to Private Ownership under the Islamic Shari'ah: .................................... 74 5. Expropriation in Islamic shari’ah Law: ..................................................................... 77 6. The land system in the Ottoman Empire: ................................................................. 78 7. Land-related Laws from the Ottoman government (the Ottoman Land Law of 1858) ......................................................................................................................................... 79 8. Regulating property ownership in the modern state ........................................... 83 9. Regulation property ownership in the Gulf countries: and the constitutional protection of property rights ................................................................................................. 85 10. The regulation of ownership (public- private ownership) ........................... 86 11. The regulatory framework of property ownership in the Arabian Gulf countries ......................................................................................................................................