The following procedures must be followed for purchasing real estate in Dubai:
Complying with the law: Preparing and Endorsing a Sale and Purchase Contract
Getting the developer to sign a No Objection Certificate going to the Registrar Office to transfer ownership
Each of them will be covered in more depth below.
Legal Due Diligence: To ensure that the property is owned by the seller or developer and is free of mortgages, liens, or other charges, the buyer should ask the seller or developer to accompany him to the Dubai Land Department (DLD) or to grant him a power of attorney to inquire about the property.
Drafting and Signing a Sale and buy Agreement: Before signing the sale and buy agreement, it is crucial to check the property, if it has been finished. The parties to the contract must utilise the standard form of sale contract (Form F), but they are free to modify or attach their own terms and conditions as long as they don’t contradict with the form’s requirements. A broker must additionally sign the DLD’s standard form for the appointment of real estate brokers if they are representing a party in the sale transaction.
Getting a No Objection Certificate from the Developer: In order to confirm that the seller has paid all service charges associated with the property you are buying and that there are no violations of any applicable laws pertaining to jointly-owned properties, you must obtain a No Objection Certificate (“NOC”) from the project developer (if there isn’t an owners association).
The developer has the right to impose an AED 500 administrative fee on the NOC.
Going to the Registrar’s Office to complete the ownership transfer:
The DLD receives assistance from many licensed trustee offices in order to perform its property registration duties. After verifying that the seller and buyer have submitted all necessary paperwork, the trustee office registrar inputs the information into a computer connected to the Land and Property Department. A new title deed in the buyer’s name will be issued when the Land Department receives online approval. If all parties send in their paperwork on time and in order, transfers will be completed the same day.
Dubai’s Property Purchasing Process:
This is a very basic rundown of the purchasing procedure; for a more thorough understanding, speak with your agent:
The Offer: You submit an offer as soon as you locate the house of your dreams. You and the seller will sign a “Memorandum of Understanding” (MOU) if that offer is accepted. This is a contract to enter into a “Sale and Purchase Agreement,” or SPA. This rather antiquated procedure was developed to circumvent the problem that developers frequently issue SPAs.
The Deposit: 10% of the whole purchase price is often paid to the seller together with your signature on the MOU, which was created by your agent. Ensure that the MOU clearly outlines what will and won’t happen to the deposits (a lot of MOUs don’t specify when either the seller or you will lose their deposit). Generally, you forfeit your money if you sign the MOU and then decide to back out of the agreement or postpone it. Note: Before signing, confirm that you are able to fulfil the transfer date and final payment (for example, if your purchase depends on you selling a property, this information must be included in the MOU).
The Finance: The buyer’s bank will determine the property’s worth if they want to use financing. They will start processing the payments if they determine it is worth the amount they have committed to lend. Finance transactions take longer than cash transactions, and money advances from banks might take up to 30 days. This procedure might take a total of sixty days if the seller is under mortgage.
The Transfer: Upon receipt of the funds, the seller receives a “No Objection Certificate” (NOC) from the developer attesting to the fact that the developer has approved the transfer and the seller has paid all outstanding fees. The Parties sign the SPA (banks may also be present), and if financing is not available, the money is turned over. If financing is being utilised at this point, the bank will only provide a “Comfort Letter” indicating that they would make the payment when the developer signs the SPA. The buyer gets registered as the new owner once the developer signs the SPA, which should take a few days.To release the remaining cash, the developer or seller brings a copy of the comfort letter and the SPA to the bank.
General Advice:
The property owner must appear before the Registrar at the Dubai Land Department (Trustee offices) either in person or through a representative operating under a properly documented power of attorney.
For corporations, evidence of all authorised individuals purchasing or selling real estate on the company’s behalf must be provided in the form of a partners’ resolution, a power of attorney, or properly documented corporate documentation.
Documents in other languages need to be certified translations into Arabic and authenticated.
Real estate transactions are required to be registered within 60 days of the date the sale and purchase contract (or any other written contract) is signed. Failure to do so may result in a fine in addition to the registration expenses.
Any modification to the company’s shareholders’ equity that results in the ownership of real estate in Dubai is deemed a transfer of the property, necessitating notice to the Dubai Land Department (DLD) and payment of any relevant costs.
Although foreign corporations are not permitted to directly hold real estate in Dubai, they are permitted to do so by setting up subsidiaries in free zones like the Dubai Multi Commodities Centre (DMCC) and Jebel Ali Free Zone (JAFZA).
If any of the businesses’ shareholders is a corporation formed and registered in a foreign jurisdiction, it is crucial to contact the Dubai Land Department (DLD) and get their prior permission of the planned transaction structure and the buyer’s papers.
Avoid doing business with real estate brokers who aren’t RERA registered.
