Sustainable floating city development has recently gained increasing popularity as a serious solution to climate change threats and land scarcity faced in urban areas. While many design and engineering aspects have been widely studied and tested, social acceptance and legal issues have been relatively underemphasized. The legal aspects of floating city development are multifaceted, contextual and rather complicated. It involves different scales and levels of legislation and branches of law. This paper aims to identify the current legal framework at different levels, as well as the knowledge gaps that still need to be filled in order to make living (i.e. human settlement) at sea possible and regulated. Taking the Netherlands as a host nation example for floating city development, the research investigates into the status-quo and future challenges regarding international law (United Nations Law of the Sea Convention [LOSC]), national laws and property law. The results shed light on the complex interrelations between different scales and levels of laws that need to be taken into account for expanding cities on water. Recommendations on future research and regulatory actions needed to overcome the challenges and facilitate the realization of sustainable floating city development are provided.