How can I protect my rights while buying off-plan property in UAE?

Question: I want to buy an off-plan property from a developer. How do I guarantee my rights? What are the legal procedures that must be taken in order for the purchase process to be completed correctly and the property to be received? What is the difference between buying a freehold property and a non-freehold property?

Answer: The term ‘freehold’ is used when you purchase the property in full (whether utilising a mortgage or in cash), so you own the property itself. They are estates of indefinite duration that can exist for a lifetime or forever. Non-freehold, also known as leasehold, is where you purchase the rights for the property for a limited period of time, normally for about 99 years. The holder of a non- freehold estate (the tenant or lessee) holds no ownership interest in the real property and only has the right to use the property as established in the terms of the lease or rental agreement. Ownership remains with the landlord (lessor).

Regarding buying an off-plan property, there are no specific legal procedures to be taken, but it is better to keep some things in mind. In the first place, it is better to select a property located in a freehold area to legally secure your investment. Doing a background check on the developer is essential, as you will be investing your money in the developer’s project. So check the track record, financial stability and previous projects to get an idea of the work quality and delivery timeframes, the escrow account, etc. It is advised to personally visit the property site after selecting the investment project. Understanding the area and layout of the property unit will be made easier by physically seeing the property.

Also, read and understand the sales contract. Make sure that all the terms and conditions are clearly stated and you have a complete understanding of your rights and responsibilities. After signing the contract, make sure that that this contract is registered in the Interim Real Estate Register. Upon the completion of this step, you will receive the initial contract of sale which will be issued by the Land Department. You may inspect the unit to ensure that you are satisfied with the quality and there are no issues in the property until its completion and delivery.