Property Law in Jordan
Property Law in Jordan operates under a combination of civil law and Islamic law, influenced by the country's historical ties with the Ottoman Empire and its modern legal framework. Property ownership and transactions are governed by various regulations, with key laws like the Jordanian Civil Code and Real Estate Law forming the foundation of property rights and obligations in the country.
Key Features of Property Law in Jordan:
1. Legal Framework
a. Civil Code and Statutes
Jordan's Civil Code (Law No. 43 of 1976) is the primary source of property law, and it governs matters related to ownership, possession, transfer, and inheritance of property. This is complemented by a series of specific laws and regulations concerning real estate transactions and registration.
The Real Estate Law (No. 8 of 1953) and the Land Registration Law are also crucial in defining and regulating real property ownership, transactions, and registration.
Islamic law (Sharia) influences some aspects of property law, particularly concerning inheritance and some property rights for Muslims.
b. Jordanian Courts
- Property disputes are generally handled by the Jordanian judiciary, which is comprised of the Court of First Instance, Court of Appeals, and the Supreme Court. The Judicial Council oversees the legal processes related to property.
2. Types of Property Ownership
a. Real Property
- Real property in Jordan refers to land and buildings, and ownership rights are generally treated under the country's legal framework for property.
b. Freehold Ownership
- Freehold ownership allows individuals to hold full and unrestricted ownership of land and buildings. Jordanian citizens and foreigners can own property, but there are specific restrictions for non-Jordanians (foreigners) on land ownership in some areas, particularly in certain regions and areas near borders.
c. Leasehold Ownership
- Leasehold ownership is common in Jordan, particularly in commercial properties. Under a leasehold, the tenant has the right to use the property for a specified period (often 99 years), after which ownership reverts to the freeholder.
d. Joint Ownership
- Joint ownership is recognized in Jordan, particularly in cases where multiple parties own a share in the property. This type of ownership is subject to agreements on the division of rights and responsibilities.
e. Possession vs. Ownership
- Possession of property is different from ownership. In Jordan, an individual can possess property under various forms of usufruct or lease agreements but may not own the title to the property.
3. Land Registration System
Jordan uses a land registration system that aims to provide clarity and certainty of ownership. The Land and Real Estate Registration Department is responsible for maintaining land registers.
The title deed (known as Sijil Mulk) is the official document of property ownership. The registration process is essential to legally transfer and protect property rights in Jordan.
Property registration is mandatory for most real estate transactions. The title deed system serves as the proof of ownership and is crucial for proving legal title to property.
4. Property Transactions
a. Sale and Transfer of Property
The sale of property must be documented through a formal sale agreement and must be registered with the Land Registry. Both the seller and the buyer must sign the contract, and the transaction will be completed once the property is formally transferred.
In addition to the sale agreement, the buyer and seller must go through the land registration process to update ownership records. The buyer must also pay applicable registration fees and taxes.
b. Stamp Duty and Taxes
- Stamp duty is payable on property transactions, and the amount varies depending on the property’s value.
- Property tax is also imposed on certain types of property, including both real estate taxes and land use taxes.
c. Due Diligence
- Buyers should conduct due diligence before purchasing property in Jordan, which includes verifying the property’s legal status, title, and absence of encumbrances (e.g., mortgages or liens). This can be done through searches at the Land Registry.
5. Mortgages and Secured Lending
a. Mortgages
Mortgages in Jordan are commonly used for financing property purchases. A mortgage loan is typically secured by real property, and the lender can foreclose on the property if the borrower defaults on repayment.
Mortgages are registered in the Land Registry, ensuring that the lender's interest in the property is legally recognized.
b. Foreclosure
- If a borrower defaults on the mortgage, the lender may initiate foreclosure proceedings. The foreclosure process is regulated by the Civil Code and the Civil Execution Law.
c. Bank Financing
- Bank financing for property purchases is common, and many banks in Jordan offer real estate loans to both citizens and residents. Foreigners may also be able to access financing, although the terms may differ.
6. Leases and Tenancies
a. Residential Leases
Residential leases in Jordan typically involve a fixed-term lease agreement between the landlord and the tenant. The agreement specifies the rental amount, duration, and responsibilities of each party.
Security of tenure for tenants is not as strong as in some other jurisdictions, but tenants have legal protections under the Lease Law and Civil Code. Leases are often for one or more years, and the landlord can increase the rent at the end of the term.
b. Commercial Leases
Commercial leases are similar to residential leases but often involve more complex terms regarding the use of property, rent increases, maintenance responsibilities, and possible term extensions.
Lease agreements for commercial properties are generally governed by contract law, and they tend to be more negotiable than residential leases.
7. Succession and Inheritance
a. Inheritance Law
Inheritance law in Jordan is influenced by Islamic law (Sharia) for Muslim Jordanians, and the distribution of assets, including real property, is governed by strict Sharia principles. However, for non-Muslims, civil inheritance laws apply.
For Muslim property owners, inheritance is typically divided among heirs according to predetermined shares under Sharia law, with fixed portions allocated to the spouse, children, and other family members.
b. Wills
A will (or Wasiyyah) is recognized in Jordan for both Muslims and non-Muslims, and it can specify how property is to be distributed upon death, subject to the constraints of Sharia for Muslims.
The Royal Court handles matters related to wills and probate, ensuring that the terms of the will are executed in accordance with the law.
8. Expropriation and Public Use
- The government of Jordan has the power to expropriate land for public purposes, including infrastructure projects. Expropriation is done in accordance with the Land Expropriation Law and typically involves compensation to the property owner at fair market value.
9. Dispute Resolution
Property disputes in Jordan can be resolved through the Jordanian courts, particularly the Court of First Instance and Court of Appeals. The Royal Court also deals with issues concerning land inheritance and wills.
Disputes may involve conflicts over land ownership, rental agreements, or other property-related issues. In many cases, mediation or arbitration may also be used to resolve conflicts without going to court.
10. Foreign Ownership Restrictions
Foreign ownership of property in Jordan is generally restricted. Non-Jordanians can own property under certain conditions, typically in designated areas or for investment purposes, subject to approval from the Jordanian authorities.
Foreigners are not allowed to own agricultural land or land within a certain distance from Jordan's borders (particularly near sensitive areas).
There are also limits on the percentage of foreign ownership in certain developments, particularly in real estate projects.
Key Takeaways:
- Jordanian property law is governed by civil law, Islamic law (for Muslims), and various statutes.
- Ownership of land and real property can take various forms, including freehold and leasehold.
- Land registration is mandatory for property transactions, and ownership must be verified through the Land Registry.
- Stamp duty and other taxes apply to property transactions, and due diligence is essential for ensuring clear title.
- Mortgages are commonly used in property transactions, and foreclosure is possible in the case of default.
- Leases for residential and commercial properties are regulated under Jordanian law.
- Inheritance laws follow Sharia law for Muslims and civil law for non-Muslims, with wills being enforceable in property distribution.
- Expropriation of land by the government is possible under certain circumstances, with compensation provided.
Jordan’s property laws ensure a structured and regulated system for ownership and transactions while also offering protections for both local and foreign property owners.
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