Revisions To The Land Registration Law In The Kingdom Of Bahrain

Following the New Year, the SLRB has implemented Legislative Decree No.13 of 2013 promulgating the Land Registration Law (New Law) replacing Legislative Decree No. 15 of 1979 (Old Law). The New Law was ratified in June 2013 as a result of the ever growing real estate market in Bahrain. Whilst the majority of the provisions of the Old Law have not materially changed, the New Law provides for greater clarity and a refreshed structure.

We have set out below some of the key changes which we believe will affect the transactions we will be assisting with in 2014 and onwards.

1. Registration Fees

   The Old Law provided for a tiered registration fee structure as follows:

   The New Law replaces the above structure by setting a flat registration fee of 2% on all property sales regardless of the purchase price. This significantly reduces the registration fees for transactions which fall above BHD 120,000. For example, if the purchase price of a property is BHD 1 million, the registration fee under the Old Law would amount to BHD 30,000, whilst the registration fee under the New Law would amount to BHD 20,000.

2. Early Registration Discount

   The New Law seeks to further promote early registration of property transactions by increasing the discount on registration fees by 5% to a total of 15% for applications that are submitted for registration at the SLRB within 2 months from the date the prescribed forms of transfer are signed and executed before a Notary Public. As such, if a transaction is registered with the SLRB within 2 months, the purchaser will pay a registration fee of 1.7% (2% x 15%). By way of example, if the purchase price of a property is BHD 1 million, a purchaser is liable to pay a registration fee of BHD 20,000 (i.e. 2% of BHD 1 million). If the purchaser registers the property within 2 months, then the purchaser will only pay BHD 17,000 (i.e. 1.7% of BHD 1 million).

3. Title Deed Copies

   Any party with a proven right in a property is now permitted to obtain a copy of the title deed from the SLRB (Article 39 New Law). Previously, only one title deed was issued per property (Article 38 Old Law). Whilst the New Law also confirms that relevant stakeholders are able to apply to receive a certificate detailing their interests in the property, the New Law appears to have abandoned applications for copies of the title plans or plot size area from the SLRB (Article 52 New Law).

4. Corner Plots

   The New Law provides further clarity in relation to the sale...