If you have decided to purchase a property in the UAE, there are a number of things to consider in order to make the process as smooth as possible, especially since there is no obligation to use a notary in the UAE. Therefore, a close examination of the contract documents is of particular importance. Our experienced lawyers at Daburon & Partners will be happy to assist and support you in your Real Estate acquisition. Among other things we check for you:
Our focus is on the following areas:
- the contract documents, in particular the contract provisions regarding the required down payment, the possibility of cancelling the reservation or the additional fees (for example for the property management or for any ancillary costs of the complex)
- the registration of the project and the construction progress
- Brokering amicable settlements
- the absence of encumbrances on the property
- the registration of the Real Estate agency with the authorities
If the seller is also the builder or project developer, a deposit on the purchase price (around 10-20% of the purchase price) is usually paid after signing a reservation agreement. This is followed by the inking of the purchase agreement, consisting of a contract form prepared by the land registry authority, which regulates the essential elements of the contract (contractual partner, object of purchase, broker, etc.) and an amendment agreement to this, the so-called "Sale and Purchase Agreement" (SPA). The provisions of the SPA are in most cases standardized and hardly negotiable, since sellers in larger projects with many individual units have an interest in concluding uniform contracts. The purchase agreement is then signed at the relevant land registry office or its affiliated auxiliary offices. It is signed directly on site by the buyer himself or a third party authorized by him.
Regarding off-plan transactions, the opening of an escrow account by the developer is mandatory by law in order to protect the buyers in the event of the cancellation of the construction project. The purchase price installments of the buyers go into this account and are only paid out according to the progress of construction, so that in the event of project abandonment, a pro-rata repayment to all buyers is guaranteed.
The procedure for off-plan transactions differs only slightly from the purchase of a property that has already been built: After signing the contract and paying all fees, the seller registers the property with the land registry authority. This registration (officially called "Oqood" in Arabic) corresponds to an entry in an official, interim property register and marks the off-plan purchase in the land register. Subsequently, the Dubai Land Department issues the buyer a certificate of oqood with details of the property for sale, the payments made to date and the payments still due.
After completion of the project and full payment of the purchase price, the title deed is issued to the buyer (nowadays usually by email). This step represents the transfer of ownership in rem; the presentation of the title deed thus has an external effect on third parties.
Since opening a bank account in the UAE is only possible with a residence permit, payment is often made through an intermediary based in the UAE (e.g. a legal consultancy like Daburon & Partners). The investors thus make the payment to the intermediary, who then has the bank check issued through his own bank. If the buyer does not wish to personally carry out the acquisition process on site, a notarized power of attorney must be issued to the agent – if this is the case it is advisable that the intermediary also is the local agent. Our lawyers at Daburon & Partners are happy to undertake this task and operate as your intermediary.