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Property transfer procedure in Dubai

Property Transfer Procedure in Dubai

UAE is one of the nations that attracts foreign direct investment the most. A vital industry for attracting additional investment to the UAE is real estate. In reality, a non-resident buyer may be assisted in acquiring a long-term UAE visa by a high-value investment in UAE real estate, provided that the prerequisites are met.

The primary legislation that defines different property categories and deals with land ownership rights is Federal Law No. 5 of 1985 (Civil Code). Nevertheless, each Emirate has published its own rules on the purchase and sale of land, and it should be consulted for further guidance.

Who is eligible to purchase property in the UAE?

Subject to fulfilling specific requirements, anybody can purchase real estate in the UAE.

  • According to Article 4 of the Property Ownership LawUAE and GCC citizens and companies incorporated in the UAE (aside from free zones) that are wholly owned by UAE or GCC citizens have the right to hold freehold title to real estate and to acquire all types of real estate interests, including usufruct, musataha, and long-term leases up to 99 years located in any area of the Emirate of Dubai. Also permitted to acquire property in Dubai are public joint stock corporations. However, a UAE-incorporated firm with non-UAE or GCC shareholders will not be regarded as a UAE or GCC national.
  • Individuals and organizations not citizens of the UAE or the GCC can own freehold title, long leases, or usufruct rights for up to 99 years.

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Property Transfer: what is it?

The Civil Code states that the property cannot be transferred between parties unless it is legally registered. All activities linked to the formation, transfer, modification, or withdrawal of a property right are void unless registered in the property register, according to Dubai Law 7 of 2006, which regulates the registration of property in the Emirate of Dubai. Under Dubai real estate law, the government’s title deeds are considered the only valid proof of a person’s property rights.

Property Transfer procedure in Dubai

The following steps must generally be taken for property transfer and registered in the UAE.

  1. Due Diligence

A thorough investigation of the property is done to ensure that the seller is fully authorized to sell the subject property. Reviewing the title records, personally checking the property, and, if practical, looking over the property register are all part of the typical property due diligence process.

  1. Contract of Sale 

The basic terms of the contract, as agreed upon by the parties, are often spelt out in a term sheet or memorandum of understanding signed by the buyer and seller. The term sheet often has a set expiration date and is only effective until the sale contract is signed. It is also typically contingent on the successful conclusion of thorough due diligence.

Details on the property, the buyer and the seller, the purchase price, the terms of payment, the applicable law, the dispute resolution procedure, and a termination clause should all be included in the sale contract. If the authorities have prescribed a sample sales contract, that model should be followed together with an annexure outlining the additional provisions.

  1. Certificate of No Objection Request (NOC)

The next step is for you and the seller to arrange a meeting at the developer’s office. A letter of authorization (NOC) to transfer of ownership will be requested and purchased. The developer will then issue the NOC for a fee if no unpaid service bills are found on the site.

  1. Transfer of ownership with the Dubai Land Department

The final step in legally buying a property in Dubai is to meet the seller at the office of the Dubai Land Department so that the transfer may occur once you’ve received the NOC.

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Types of Property 

The categories of real estate accepted in the UAE are listed below.

  1. Freehold Property

It is the unrestricted, perpetual right to own the property. In the United Arab Emirates, certain regions are regarded as freehold land. Freehold properties are the most often sought-after properties by expats interested in investing in Dubai since they may be rented, sold, or inherited. You also get land ownership when you purchase a freehold villa or townhouse in Dubai.

In this category, the investor has complete ownership of the land in perpetuity, with minimum paperwork and no state authorization.

  1. Commonhold Property

Commonhold properties in the UAE are typically freehold residences. When you acquire a common hold property, such as a condominium, an apartment, or a non-residential unit in a building, you are just purchasing the unit. You are therefore issued a title deed and absolute ownership of the unit but not the land on which the apartment building is located.

A commonhold property gives you the individual right to buy, sell, or rent a property for inheritance purposes. Typically, these structures are owned by real estate or property developers.

  1. Usufruct

In the simplest sense, usufruct properties are leases for long-term investments. A usufruct property has no right to be altered or changed by its occupier. Expats can choose these other possibilities, such as usufruct property and Musataha if ownership rights are prohibited.

In the United Arab Emirates, residential lease terms can be 10 to 99 years long, while commercial lease terms can be up to 50 years long. Additionally, usufruct properties may be inherited.

  1. Non-Freehold Property

In Dubai, non-freehold properties are only available to residents and GCC nationalities. Foreign investors are not allowed to purchase real estate in these Dubai neighborhoods. However, in recent years, the government has given several projects inside a few non-freehold zones freehold status.

Documents required for Property transfer

  • Passport (original and copy)
  • Original title deed
  • The developer’s original NOC (freehold only)
  • Agreement for Sales and Purchase (certificate of property ownership)
  • Managerial cheque payable to the seller

How may HHS Property Lawyers in Dubai assist you in Property Transfer in Dubai?

You may property transfer in Dubai by fulfilling these four necessary legal conditions. However, investing in real estate in Dubai is a significant financial commitment, so weighing the advantages and disadvantages beforehand is crucial. As you might expect, some steps and checks must be made before you may buy or sell a property in Dubai. To ensure that the deal proceeds without any legal snags, a knowledgeable property lawyer in Dubai may provide invaluable guidance and experience. The procedure will go considerably quicker if you select a leading law firm in Dubai UAE with skilled and experienced property Lawyers. Fortunately, you may ask for advice from a property Lawyer to simplify matters.

For more information about Property Transfer in Dubai, Please don’t hesitate to contact us.

Hazim Darwish

Hazim Darwish, is a Senior Partner of HHS Lawyers in UAE. Practicing law for almost a decade, he has in-depth knowledge on UAE legislation with particular expertise on legal drafting, contract drafting, labor disputes, family law, and regulatory compliance for business organizations. Hazim Darwish also provides counsel on legal rights and obligations in the UAE to clients, including individuals and businesses subject to investigation or prosecution under Criminal Law by major regulators.