Many homeowners who've bought the property of their dreams may have done so before meeting their spouse. However, when you wish to change the title deeds to joint ownership, this can seem a rather arduous task. But is it really as difficult as it sounds?
Name change
Carol Alderson, managing partner of Alderson & Associates FZE, legal consultants, explains, "Most developers have a relatively simple procedure, but they often do require a small fee, as an administrative charge. If the property is registered with the Land Department, again a fee is required, along with an attendance at the Lands Department, which can often be quite time-consuming. Some developers may also require a ‘No Objection Letter' from the first owner, which may also have a fee attached to it as well as a wait of several days. If there's a mortgage over the property, then the bank or financial institution will also become involved in the process and will need to give their consent to another name being added to the Title of the Property."
If you're armed with the correct documents this often saves valuable time. Alderson suggests, "The change of name, in the first instance, must be registered with the developer who will give their consent to the change. It's customary to produce the original sale and purchase contract as well as receipts for service charges for the year."
Division of assets
But, if it all goes wrong and a couple eventually divorces, what happens to the property? "If parties are entering into a divorce, the UAE law is clear in that whatever is mentioned on the sale and purchase agreement (SPA) records the level of ownership," advises Alderson.
"For example if it's stated as joint ownership, then both parties own 50 per cent each. It's possible to record a different percentage, but if only one party's name is on the SPA, the other party to the marriage cannot claim any ownership under Sharia, unless he or she is able to clearly identify the financial contributions made. This would involve clear and original documents to show what amount has been paid and that it was actually paid as a contribution towards the purchase of a property."
Alderson adds, "In a Muslim marriage, where the husband has made the payments and the property is in his name, the wife would not be entitled to any share.A Muslim wife is entitled to maintenance up to a 12-month period for herself [and] maintenance, education and housing forher children. She would also be entitled to claim her dowry, if it hadn't previously been paid to her."
For anyone who isn't from the UAE,the question is: Should you settle the division of your assets in the UAE or inyour home country?
"In the UAE courts a divorce can take place if the parties are non-Muslim," explains Alderson. "To this extent, the UAE courts must determine the divorce under the laws of the parties' countries, but more particularly that of the husband's. It's possible for financial matters to be resolved under the laws of one's own country but it's recommended that an agreement be reached between the parties so that a judge in the UAE doesn't have to try and determine laws with which he is unfamiliar. Mistakes will often happen in such cases and matters [will be] referred to the Appeal Courts. If an agreement cannot be reached then it's far better to revert to one's own country fora financial resolution."
Safeguard your assets
Of course, there are ways that you can safeguard your assets and that controversial prenuptial agreement is often the first thing that affluent homeowners consider. "I have frequently been asked to prepare prenuptial agreements for couples entering into marriage," says Alderson.
"Whether or not they are applicable, depends on the laws of your own country. They're not actually recognised in the UAE itself, but can be …[signed]… in accordance with the laws of your own country. They're often used to recognise the ownership of assets prior to marriage and to ensure that those assets remain the property of the individual rather than becoming marital joint assets as time passes."
Forming an offshore company
Alternatively, some solicitous homeowners consider setting up an offshore company.
"Offshore companies can be set up to determine the ownership of property between couples, but this can be costly," Alderson explains.
"It's important to recognise that there are initial and renewal fees to be paid for these companies and I'd only recommend this method of ownership if there's no other means available to determine the appropriate shareholding.
"A divorce doesn't negate problems in relation to ownership of property and could cause further problems, depending on the jurisdiction of the offshore company.
For instance, a Jebel Ali freezone offshore company is still likely to fall within the jurisdiction of the UAE courts, ultimately; Channel Island companies within UK jurisdiction, and so on. Offshore companies are normally used for tax efficacy and I don't know of any situation where this has helped in the case of a divorce unless, of course, one party seeks to keep the assets away from the other by hiding behind an offshore entity."
Lastly…
However valuable your home may be to you, Alderson has some valuable advice. She says, "When considering the financial division don't be hasty in saying to yourself that you've done all the hard work and made all the contributions, therefore you are entitled to more than the other party.
"Contributions aren't always of a financial nature. Time is money and is a concept that most Western courts recognise when dealing with a wife's entitlement to assets and property. She has often given up a career and a great deal of her time to take care of the children. She's therefore entitled to be rewarded as if she had worked and earned the money."
