Dubai has introduced and continues to implement laws and regulations to protect the rights of the buyers, investors and developers. When buying a property here, it is therefore paramount to understand the laws associated with the purchase of property. The best way to do this is to seek legal advice from the outset. “Approach a lawyer to guide you on the local laws when buying a property, be it off-plan or ready,” Philip Sequeira, head of property regulatory at Hadef and Partners, tells Property Weekly.
For property under construction, a purchaser should enquire whether the project is registered with the Real Estate Regulatory Agency. “The other things to look for include the escrow account and whether the payment plans are linked to construction milestones,” says Sequeira. “Also, know when the purchaser’s interest in the property will be registered with the land registry. Moreover, ask about the termination rights available to a purchaser and a developer, whether the property is freehold or leasehold and if an owners’ association will govern the property.”
For completed property, a buyer should get as much information from the seller or broker. “It is important to inquire about the owners’ association and the service charges,” says Sequeira. “Also, ask for a copy of the original sale-purchase agreement, as this provides information that the developer had disclosed concerning the project. This also includes all the facilities that will come with the property.”
Also, understand how the transaction works. “For instance, who will hold the deposit, and how will the deposit be handled if either party defaults?” Sequeira notes.
The other things to review include the payment of the registration fees, copy of the original sale-purchase agreement, permits and alterations done to the property. “Most of this information is not covered in the standard unified contract,” Sequeira points out. “Therefore, a purchaser must have all the commercials detailed in an addendum that can be part of the standard form. All the relevant laws are available on the Dubai Land Department website titled Dubai Real Estate Legislation.”
Making a will
A will is another vital aspect of purchasing property in the UAE, especially for an expat buyer. A will ensures that the movable and immovable property goes to the rightful heirs without any hassle. “(According to UAE law) a person may elect to have the laws of one’s domicile or where the assets are located to apply to the estate,” says Sequeira. “In this respect, a distinction is made between Muslim and non-Muslim foreigners; Muslim foreigners will be treated the same as UAE nationals for assets in Dubai and as such shall be dealt with in accordance with Sharia.”
A will by a non-Muslim foreigner is also accepted by the Dubai Courts. “The Dubai Courts will generally only test for compliance with UAE legal formalities,” says Sequeira. “The DLD will also generally follow the Dubai Court’s rulings and register properties in favour of the heirs mentioned in court’s succession order.”
Expats also have the option to register their will through the DIFC Wills and Probate Registry (WPR). “The WPR registers wills for non-Muslims for assets situated in the UAE and overseas,” says Sequeira. “It has been specifically designed with the interests of expatriate non-Muslims in mind.”
Property laws to remember
1. Law No. 7 of 2006 Concerning Real Property Registration in the Emirate of Dubai
2. Law No. 8 of 2008 Concerning Escrow Accounts for Real Estate Development in the Emirate of Dubai
3. Law No. 13 of 2008 Regulating the Interim Property Register in the Emirate of Dubai and amendments to it
4. Law No. 27 of 2007 Concerning Ownership of Jointly Owned Real Property in the Emirate of Dubai
5. By-Law No. 85 of 2006 Regulating the Real Estate Brokers Register in the Emirate of Dubai
6. Law No. 19 of 2017 amending some provisions of Law No. (13) of 2008 Regulating the Real Estate Interim Register in the Emirate of Dubai