For first-timers, buying a house or any other property can be intimidating. Investing in real estate has certain legal aspects, regardless of where you are. The same applies in Dubai. Let’s look at how to buy a property in Dubai. In accordance with real estate laws, determine the legal procedures that must be followed for this purpose.
The law for buying property in Dubai
Real Estate Law No. 7 of 2006: Land Registration Law governs the legal aspects of buying a property in Dubai.
According to the article (4) of Law No. 7 of 2006, anyone can buy and own property in Dubai. The law states that you can purchase real estate anywhere in Dubai if you are:
- A UAE citizen
- A GCC citizen
Foreigners may buy properties under the same law, but only in areas designated for foreign property ownership. Dubai offers different types of property ownership to foreigners, including freehold and leasehold. In Dubai, the primary difference between freehold and leasehold property ownership is the buyer’s rights.
When you buy a house on a leasehold basis, you will have property rights for a limited time. If you buy a property on a freehold basis, you will own the property and the land on which it is built completely.
Buying property in Dubai: steps to take
You can buy a property in Dubai regardless of whether you’re looking for a home to live in or a lucrative investment.
There are four primary legal steps of buying property in Dubai. The following section provides a chronological breakdown of the legal considerations for how to buy a property in Dubai.
1. Formulating a contract between the seller and the buyer
Once you have found the right property on a property portal, the next step is to negotiate and outline the terms of sale with the seller.
When it comes to buying property in Dubai or the UAE, you have two options: pay cash or apply for a mortgage. The ability to negotiate is perhaps the biggest advantage when you buy a property with cash rather than a mortgage. Cash buyers know their budgets better, so they can barter for a lower price.
You do not need a real estate agent or a lawyer to complete this stage. The rest of the process should be handled by a reputable Dubai real estate agency or legal compliance firm.
Be sure there are no ambiguities between you and the seller regarding the price, method of payment, or any other important factors when agreeing to the terms of sale.
2. Signing the agreement of sale
When you buy property in Dubai, you must sign the sale agreement, also known as the Memorandum of Understanding (MOU).
In Dubai, Form F, or the Memorandum of Understanding, is one of the RERA forms. Dubai Land Department’s official website provides access to Form/Contract F. Your real estate agent will usually prepare the contract for you.
Once the contract is ready, both the buyer and seller must sign it in front of a witness (usually the agent) at the Registration Trustee’s office.
Additionally, the buyer must pay a 10% security deposit to the Registration Trustee, which is refunded once the property transfer is completed.
3. No objection certificate application
In the next step, you and the seller will need to meet at the developer’s office (for example, Dubai Properties, Emaar, or other property developers in Dubai).
This meeting aims to apply for and obtain a No Objection Certificate (NOC) for the transfer of ownership. The developer will only issue a NOC if there are no outstanding service charges on the property.
4. Effecting the transfer of ownership with DLD
In order to complete the purchase of a property in Dubai, you must meet the seller at the Dubai Land Department office for the transfer to become effective once you have received the NOC.
You must have the following documents prepared before visiting the DLD office in order for the property transfer to take effect:
- A check is drawn by the manager for the property price payable to the seller
- Original identification documents (Emirates ID, passport, and visa) of the buyer and seller
- The developer’s original NOC
- Signed Contract F (MOU)
Upon completion of the formalities, a new title deed will be issued in your name, and you will be an official property owner in Dubai.