Buying a property anywhere in the world generally creates certain legal aspects. Dubai is a top-tier market for real estate, where one can buy all sorts of properties. In Dubai, its amended laws allow foreigners also to buy properties and many are looking to invest in Dubai real estate market. Real Estate Law Number 7 of 2006; Land Registration Law in the Emirates regulates the legal aspects of buying a property in Dubai. Article 4 of Law number 7 of 2006 defines who can own or buy a property in Dubai. Article 4 states that only a UAE and GCC national and a company owned fully by them have the right to own a property in Dubai. And for a non-national person, ownership is permitted in certain designated areas in the Emirates as freehold and commonhold. The non-resident foreigners who have an investment interest or buy a flat in Dubai commonly look for freehold properties. Investors enjoy full ownership over the freehold property and they can use it for any legal purpose. Commonhold properties consist of apartments and non-residential units in a building. However, here the property owner has to make payments for the property maintenance and its common areas. The designated freehold areas in Dubai where a non-resident foreigner can buy properties include the Arabian Ranches, Palm Jumeirah, Dubai Marina, and Downtown Dubai. If you are looking for luxurious villas or perfect homes or invest in real estate in Dubai the procedure for buying such properties is fair and straightforward. For buying or owning a property in Dubai, there are four basic steps to follow. They are:
First of all, you have to find out the right property and negotiate the terms and conditions with the seller. To find out the property in Dubai the buyer can seek the assistance of RERA registered brokers. For the purchase of a property, one can use home loan options or mortgage financing. While agreeing with the terms and conditions of the sale, make sure that there is no uncertainty between the buyer and the seller. Make clear that the cost of property and mode of payment is fair and transparent.
After accepting the terms and conditions made by both parties the next step is to sign a sale agreement, also known as a Memorandum of Understanding. A Memorandum of Understanding (MOU) is normally called a Contract / Form F and protects the rights of the three parties to the sale agreement. Contract / Form F is one of the important forms required during the transaction of a property. Form F will be available on the official website of the Dubai Land Department (DLD). Once the agreement is ready, the buyer and seller have to sign the agreement at Registration Trustee Office. After signing the contract in front of a witness the buyer has to pay a security deposit of 10% on the property to the Registration Trustee. And the same deposit will be returned to the buyer on the transfer of the property is finalized.
The seller has to apply for a No Objection Certificate (NOC) from the developer to transfer the ownership of the property. The developer will issue a No Objection Certificate (NOC) for a fee that will range from AED 500 to AED 5000. Before issuing a No Objection Certificate the developer has to make clear that no service charges are outstanding on the property.
After obtaining the No Objection Certificate (NOC) from the developer, both the buyer and seller have to meet at the office of the Dubai Land Department to complete the transfer of ownership. The buyer and the seller have to produce certain documents before the Dubai Land Department takes effect the transfer of the property. They are;
After the completion of the registration process, a new title deed will be issued in the name of the buyer is he who will be the new owner of the property. Usually, the process of transfer of property in Dubai will take two to ten weeks to complete. And if the property is bought on a mortgage the legal steps are slightly different. In such a case, before signing the Memorandum of Understanding the buyer has to get a pre-approval on the mortgage, and approval from the Dubai Land Department is also required before applying for a No Objection Certificate. If the property going to be purchased has an existing mortgage, then the buyer must settle the original mortgage on the property before applying for a No Objection Certificate (NOC). Such situations are riskier for the buyer and it will take more legal steps than usual. There are several costs included while buying a property in Dubai. They are;