Published on August 7th, 2012 | by Dubai City


Law to Buy Property in Dubai

The Dubai freehold property market is only just over three years old; during the past three years Dubai property prices have soared, rental prices have skyrocketed and international real estate investor interest in this Middle Eastern market has intensified incredibly.

In Dubai and the UAE, property law is very young and still taking its long-term shape, although the key elements are straightforward to understand.

Regarding purchase of property in Dubai everyone must aware of following things:-

  1. The legal position regarding freehold ownership by non-UAE nationals and non-GCC nationals is ambiguous and requires clarification,
  2. The immigration law and the practice and procedure for issuing residence visas to expatriate buyers (and their families) is ambiguous and requires clarification, and
  3. Mortgage finance is now being offered to expatriates by some local banks and specialist organisations on specific terms.

6 Golden rules to Buy Property in Dubai

Real estate in Dubai is greatly sought-after – even though legislation is still provisional

  1. Transfer of property rights, including real estate, can be performed just by means of a simple private written contract in Dubai. The notarization usual in other countries does not take place. So beware of signing anything in haste!
  1. A definitive law on real estate and a land register for foreign citizens are still being prepared in Dubai. Until this time, purchases are recorded in the register of ownership of the developer concerned, who undertakes in the purchase agreement to ensure a transfer in the land register as soon as it is available. Do not therefore sign an agreement that does not include a clause with this undertaking.
  1. Deposits of 10% or often even 20% of the purchase price are usual. Further installments are paid over the agreed period of time up to the completion of construction.
  1. Purchase of real estate is at present tied to the simultaneous acquisition of a residence permit for the UAE, which is, however, not a work permit.
  1. Transfer to a third party is usually permitted in the purchase agreements. For this purpose the original buyer normally has to pay to the vendor a transfer fee of up to 2% of the original price. In practice attempts are made to pass on the transfer fee to the new purchaser.
  1. As a result of the enormous demand, residential property that is ready for occupancy is hardly available for purchase except at second or third hand. In this case it is advisable to examine the vendor’s first purchase contract in order to ensure that the right to transfer exists. Those who do not wish to move into their property immediately buy “from the plan” from the developer, i.e. with the prospect of completion, in some cases, in several years.

Dubai passed its new property law amid a steep hike in rent and purchase prices, which according to the real estate expert who wished to remain anonymous, is making foreign companies think twice before settling in the emirate.

Rental Laws
Tenancy contracts in the United Arab Emirates normally last for a year, with exception to Sharjah which is normally for three years, and within that time landlords are not permitted to increase the rental price until it requires renewal. At the time of renewal, a landlord is not permitted to increase the rent by more than 15% in Dubai as of 12th Nov. 2005.

If a dispute happens between a tenant and landlord on the price increase, the issue should be taken to the Municipality’s Rent Control Committee to settle. To file a case with the Rent Control Committee will cost 400 or 500 Dhs. and will take normally between a few weeks or months before being summoned to appear before the committee. If the case is won, then the fee paid to file a case will be paid for by the landlord.

Landlord Obligations
Landlords are normally obligated to handle the annual maintenance of their property and they are not permitted to evict a tenant without just cause within the tenancy contract time period.

Dubai Freehold Property Law
On the 14th of March 2006, Dubai’s government issued its long-awaited law legalising foreign ownership of properties in designated areas of Dubai, but doesn’t give property owners permanent residence visas or an automatic right to work in Dubai.

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