Residential Tenant’s Guide

Residential Tenant’s Guide

Property market in the UAE

In recent years, the government of Dubai has reformed its property laws. This reformation process has attracted a lot of individual and corporate investors in Dubai’s booming real estate industry. Other emirates like Northern Emirates & Abu Dhabi followed Dubai’s path in this growth.
Freehold ownership was introduced in 2002 and since then expatriates from all over the world have started investing in residential and commercial properties, and plots of land in UAE.

The law no. 3 of 2006

Article (1)

Areas of properties that can be owned by Non-UAE Nationals in the Emirate of Dubai

Article (2)

Unless the context requires otherwise, the following terms and expressions in this regulation shall have the meanings as shown against them respectively: “The Ruler” means H.H. The Ruler of the Emirate of Dubai “The Department” means The Land Department. The Real Property” means anything immovable fixed within its boundaries which cannot be moved without damaging or changing its features.

Article (3)

The Non-UAE Nationals may be granted a freehold property, or usufruct right, or leasehold right over a real property for a period not exceeding 99 years, in plot/s which mentioned below, pursuant to site plans issued by the Department and enclosed with this regulation:

  • Umm Hurair Second Plot No. (013)
  • Al Barsha West Second, Plot No. (002)
  • Al Barsha West Third, Plot No. (002)
  • Emirates Hills First, Plots No. (004) & (814)
  • Emirates Hills Second, Plots No. (001) & (049)
  • Emirates Hills Third, Plot No. (001)
  • Jebel Ali Plots No. (051), (074), (081), (082), (083), (084), (142), (143) & (391)
  • Al Jadaf Plots No. (003), (007) & (008)
  • World Islands Plot No. (001)
  • Ras Al Khor Plot No. (165)
  • Al Rawiya Plots No. (063) & (065)
  • Sheikh Zayed Road Plots No. (118) & (147)
  • Al Sufouh First Plot No. (069)
  • Al Sufouh Second Plot No. (005)
  • Al Quoz Third Plots No. (005) & (006)
  • Al Quoz Industrial Second Plots No. (010) & (030)
  • Al Quoz Industrial Third Plot No. (028)
  • Mirdif Plots No. (143) & (144)
  • Dubai Marina Plots No. (007), (014), (015) & (033)

Freehold & Leasehold

Freehold means that the buyer owns the land and the structure in perpetuity whereas Leasehold title means that a third party has an interest in the property. In Dubai there are freehold and leasehold developments available for sale. Leasehold developments do not provide a residential visa to the property buyers.

Property sales and transfer of ownership

From Seller to Buyer at completion of the transaction) There are several case scenarios which apply for the sale and transfer of property in Dubai.

Scenario 1 – Properties which can only be bought by UAE / GCC nationals

Scenario 2 – Properties in designated areas where foreign nationals can purchase and sale in the “Secondary Market” (after the 1st buyer off the plan selling to a secondary buyer prior to the building completion), whereby the new buyer who takes over the Developer’s contract and continues the payments till completion and fully paid to the developer. A “Pre-Title Registration” registration system applies.

Scenario 3 – Properties whereby the Title Deed Certificate is already issued to the owner of the property.

If agents / brokers and Dubai Property investors come to the Dubai Land Department to transact their business. Staff at the ‘Information Desk’ on the ground floor can direct them to the appropriate section for their particular needs. DUBAI LAND DEPARTMENT Referring to a sale transaction in Scenario 2 above, being properties in designated areas where foreign nationals can purchase and are sales in the “Secondary Market” -commonly referred to as “freehold areas” (after the 1st buyer off the plan selling to a secondary buyer prior to the building completion), whereby the new buyer who takes over the developer’s contract and continues the payments till completion and is fully paid to the developer, Agents / Brokers should assist the new Buyer by urging them to do their “pre-title” registration immediately in the Dubai Land Department. (See Section 2.3) The procedure is simple and is a safety net against any possible administrative or human error. It is wise of all Agents / Brokers to contact past Dubai investor clients and make them aware of the procedure. In “Secondary Market” sales, NO TRANSFER FEE CHARGE BY DEVELOPERS IS PERMITTED; transfer fees are only payable to the Dubai Land Department. Agents / Brokers should inform clients that the Government has stepped in to ensure that all Dubai property ownership is recorded in one central place, i.e. The Dubai Land Department.

Documents required:

  • Valid Passport copies of the Buyer & the Seller
  • The Sale Transaction Contract – FORM F, floor plan, site location plan
  • The settlement cheque for the transaction made out to the following parties
  • The Seller (funds due to the Seller as per a statement of disbursements of funds held by the Listing Agent less agreed fees and charges and signed by the Seller at least 24 hours prior to the transfer date) and / or
  • The Buyer’s Bank cheque from the Buyer’s financier and a Mortgage registration fee if applicable
  • The Dubai Land Department (Seller’s Transfer fee 1% of the Property Purchase Price on the contract – Form F)
  • The Dubai Land Department (Buyer’s Transfer fee 1% of the Purchase Price on the contract – Form F)
  • The Listing Agent’s Fee as per Form F – Part 4 (And Form A)
  • The Buyer’s Agent Fee as per Form F – Part 4 (And Form B)

The Seller may also be in a position to terminate the contract on the basis of non-performance as per agreement. This is possible and sometimes a lucky strike in favor of the Seller in a fast rising market. If it is the fault of the Agent / Broker, By-Law No. (85) Of 2006 Chapter 3 – Broker’s Obligations Article (22)

Escrow Account

Law 8 2007, also known as Escrow Law , was passed in June 2007.This law aims to provide certain guarantees and reassurances to property investors as well as investors to make Dubais real estate a feasible and safe investment opportunity and to satisfy their rights and expectations.

Furthermore, the RERA has officially licensed approximately 400 real estate developers, a number that is ever increasing and around thirty banks have been approved for operating trust accounts.

This law applies to any individual or company receiving off plan payments for property that is not yet completed, protects funds and ensures safety of purchase. The buyers deposit all payments for the purchase of any off plan unites into a specific bank account which is operated in accordance with the predetermined conditions and terms approved by the Dubai Land Department (DLD) .The responsibility of the DLD is to monitor and locate any infringement of the provisions regulating the establishment and operation of the escrow account.

Disclaimer: This information is given for reference only. All stated above rules, regulation and procedure are governed by Dubai Land Department, and can be changed or/and updated by DLD at any time without any prior notice.