One of the most daunting tasks for one could be buying properties. Especially for the naïve people who are looking forward to investing in buying for the first time.
A great amount of understanding and attention is essential in buying a property. Since a property cannot be bought with a few pennies, a good time should be devoted in understanding the requirements along with the digits one is willing to spend on. In addition to this, the legal framework’s knowledge is mandatory while purchasing. Some nations like the United Arab Emirates are very strict about adherence to rules and regulations prescribed by law in real estate. Known places of the UAE like Dubai that is world-famous for its outstanding buildings are quite particular about each detail, from designs to the legal framework of the buildings of the city.
Let us move towards understanding the vital laws and legal procedure of buying a property in Dubai that is a crucial step before investing in real estate in Dubai.
Land Registration Law in the Emirates
The basic knowledge everyone should be conscious of is that all the legal aspects of buying properties in Dubai are headed by the Real Estate Law No.7 of 2006: Land Registration Law in the Emirates.
As per Article (4) of Law No. That was approved by the ruler—Mohammed bin Rashid Al Maktoum 7 of 2006, not every person is eligible to buy a property in Dubai. Only people who fulfill all the requirements that the law highlights can buy a property. This specifically includes—citizens of the United Arab Emirates and citizens of the Gulf Cooperation Council. The law further states the first twenty-three so-called “designated areas” that are subsequently added with other “designated areas”. Some of the areas are—Arabian Ranches, Palm Jumeirah, Dubai Marina, and Downtown Dubai.
The law to some extent benefits the foreigners as well because it is providing the options to buy properties on a freehold or leasehold ownership in Dubai. But, it restricts some of the areas of Dubai. It is open for some designated places only for foreign property ownership.
Legal Procedure to Buy a Property in Dubai
Either we buy a property to invest in or to live in. Properties in Dubai are known for both providing a chic and comfortable living along with great return on investments. To attract maximum people to buy the property in Dubai, a very simple and convenient procedure has been stated by the authorities that allow customers of all types to understand. The steps mentioned below will guide you in learning the accurate criteria of buying a property in Dubai—
- Agreement of Buyer and Seller—You can easily look at a number of projects that the Gulf Realtor offers that have properties of all types and of all budget ranges. After you choose the best property of your choice that fulfills all your requirements, read the negotiations and terms of the sales with the seller of the property. It is suggested to take the support of a good real estate agent to compare and learn more about the future returns and other important details. Once you agree with the terms of the sales, make sure that no ambiguity is there between you both. Be clear about the prices, mode of payment, down payment plans, and other essential credentials.
- Signing the Agreement of Sale—This step, legally, is called a Memorandum of Understanding (MOU) or Form/Contract F in general terms. This is a form one ought to fill whilst purchasing properties in Dubai. This is managed by the Real Estate Regulatory Authority which looks after the regulations in the real estate field. The real agent will provide you the Form/Contract F that is available on the official site of the Dubai Land Department (DLD). Once the signing formality is done by both the parties in front of the registrar of the Registration Trustee Office, the buyer pays a 10% security deposit on the property of the Registration Trustee, which is later paid back once the property transfer is finalized.
- No Objection Certificate (NOC)—NOC is a document that officially transfers the ownership of the property and states that no outstanding are due on it. This is signed at the developer’s office.
- Transfer of Ownership—Once all the steps mentioned above are done legally, the last step is to meet at the Dubai Land Department to effect the transfer of property. A few documents are required at the office, like—A manager’s cheque for the price payable to the seller, the verified identification documents of buyer and seller (Emirates ID, passport, and visa), the signed NOC issued by the developer, and the Signed Contract-Form F (MOU).
For the people, who are buying the property with a mortgage, the buyer is required to get a pre-approval by the DLD before applying for the NOC. If the buyer has an existing mortgage on the property, he/she must settle the mortgage on the property before approaching NOC. After all the steps mentioned above are done fairly, the ownership of the property transfers to the seller. A deed would be created that will mention the name of the buyer that will officially announce him/her as the new owner.
The process generally takes two-ten weeks to be completed. But, if suitable documents are not submitted on time, it can take further than ten weeks.
Buying a property in Dubai has always proven profitable to both the buyer and the sellers. The simple procedure of buying a property makes it so simple that even a person with less information about real estate would be able to learn effortlessly. Obviously, buying anything has both pros and cons, but a deal that offers more pros is always advantageous. And investing in the properties can never put you at the loss.