If you are focused on buying an off-plan property in the capital city of the UAE, this type of dwelling will definitely suit you. Given the sudden jump in property prices in Dubai, purchasing an off-plan home may be a successful variant for you. Emirates.Estate has written for customers a practice guide on how to buy an off-plan property in Dubai, the UAE.
Documents for buying off-plan properties in Dubai
RERA, the Dubai Real Estate Market Regulatory Agency, implements brand new control methods for buying a property in Dubai. The agency has released a list of documents for developers who sell off-plan real estate in Dubai. Moreover, it informed that additional steps will be introduced to regulate the activities of such developers.
Today, it has become much safer to buy flats in Dubai in projects under construction on the terms of equity participation (or off-plan), according to representatives of RERA.
Before making 20-30% of the cost of property in Dubai as a down payment, investors should require the following documents from the developer:
– land title document;
– account number from which the project will be financed;
– permission from the Land Department for construction;
– contract with a construction contractor.
Rules for developers to sell off-plan property in Dubai
Dubai today seeks to make the procedure of buying an off-plan in Dubai for foreigners simple as much as possible. Therefore, new measures are continually being introduced to ensure the security of such investments.
Today, a developer selling off-plan property in Dubai must:
- pay 100% of the cost of the land plot for building future housing before its sale
- make a 20% payment of the construction cost as a bank guarantee
- create a target account and put there 20% of the amount needed for building future real estate
- finish real estate construction by 20% before selling it
Now, as an additional measure, RERA requires that all developers build housing for at least 10% as a prerequisite for starting sales.
Instruction on buying properties in Dubai
If you want to buy an apartment in Dubai, but do not know how it happens, these tips will help you find out all the subtleties of buying and selling a property. Citizens from other countries have the right to own flats in Dubai in specific places. Next, Emirates.Estate will tell you in detail how to choose and buy investment properties in Dubai.
- The buyer chooses the property that he wants to buy.
The easiest and highly effective method is to contact any of the agencies in the Dubai property market. The fact is that almost no housing transaction is complete without the participation of agents. In most cases, the agency acts as a third party in the transaction between the seller and the buyer. However, it should be borne in mind that not all professional market participants are properly registered and operate legally.
First of all, in accordance with the Order of the Chairman of the Dubai Land Department No. 85 of 2006, all the housing agencies must have a license to operate and be registered with RERA, the Dubai Real Estate Market Regulatory Agency.
- The seller and the buyer make the purchase and sale agreement with the deal parameters.
The contract must meet the following basic requirements:
- Be concluded in writing. Notarization of contracts for real estate in the UAE is not required, a simple written form is enough. Despite the fact that the official language in the UAE is Arabic, contracts in English are generally recognized and accepted without translation. The exceptions are the prosecutor’s office, the police and the courts, where translation into Arabic is a mandatory requirement.
- Contain the main terms of the housing deal. The agreement must have:
- A property in Dubai to be bought and sold
- The cost of apartments in Dubai
- additional fees associated with the housing deal (agents’ commission, payments to the developer, registration fee at the Land Department, the compensation paid to the seller in advance of the maintenance costs, etc.)
- the period during which the sale and purchase deal must be completed
- payment terms and procedure
- liability of the parties in case of violation of the contract
It is worth noting that in most cases, the involvement of third-party lawyers is not required when drawing up a sale and purchase agreement. As a rule, qualified employees of the property agency conducting the transaction can prepare such a contract on the basis of standard forms approved and used in the company.
- When signing a sales contract, the buyer makes a deposit (usually 10% of the value of the purchased housing).
Usually, an agency accepts a deposit from the buyer and holds it until the final calculations and registration of the transaction with the Land Department. For the buyer, this guarantees a refund of the deposit if the transaction fails due to the seller’s fault. Moreover, the seller can expect to pay the deposit amount as compensation if the transaction fails due to the buyer’s fault.
A property agency with a registered office in Dubai is a serious guarantor of the transaction. In addition, an important factor is the legal requirement for 100% ownership of such a company by citizens of the UAE.
- The seller draws up a permit from the developer for the sale of his real estate (No Objection Certificate, NOC), which is necessary for registering the deal with the DLD.
The permission (No Objection Certificate, NOC), in fact, is a certificate of no indebtedness of the seller. It can take from 1 day to 2-3 weeks to register such a permit. It depends on the developer company. The cost of such a permit depends on the policy of the developer, from 500 to 5000 dirhams of the UAE (approximately 137-1370 US dollars).
- After obtaining a permit for sale, the seller and the buyer register the property in the name of the new owner in the DLD. Usually, during registration, calculations on the deal are also carried out.
- The housing register is supported by the Dubai Land Department in electronic form. Registration of the transfer of rights to housing is carried out at the time of the buyer and seller’s request. Immediately the buyer is issued a registration certificate (Title Deed) of ownership of the acquired home.
If the property for sale in Dubai has not yet been put into operation, its registration with the DLD takes place in the temporary register. In this case, the buyer receives not a certificate of registration, but the so-called Initial Contract of Sale. When the property is put into operation, the primary contract of sale is the basis for the owner to obtain a registration certificate.
The cost of registering the transfer of property ownership in the Dubai Land Department in general is 2% of the selling price and a small fixed payment (about $100) for issuing a certificate.
You must provide the following documents at the Land Department:
- originals of the buyer’s and seller’s passports
- the original certificate of real estate registration in the name of the seller
- the original permit for the sale of housing from the developer (NOC)
- a copy of the purchase and sale agreement
If you do not have the opportunity or desire to be personally present at the Land Department when registering the transfer of rights, you can delegate your powers to register real estate in your name to any other person by having a notarized power of attorney. You can do this, for example, in the notary office of Dubai Courts Notary Public. The cost of notarization of the power of attorney is 60 dirhams UAE (about $16) and 150 dirhams (about $41) are services for typing a power of attorney in English and Arabic.
When registering the transfer of rights, the final settlements between the seller and the buyer on the purchase and sale deal take place. Usually, settlements are made by transferring pre-prepared bank checks for the necessary amounts from the buyer to the seller (Manager’s Cheques). Often, such checks are prepared by the agency involved in the deal. Before this, the agency must receive all the funds from the buyer.
Before issuing the registration certificate to the buyer, the state registrar asks the buyer and the seller to make mutual settlements and sign a paper stating that the seller has no claims to pay for housing.
In order for the transaction completion process to go smoothly, the buyer must prepare all the receipts in advance and agree with the seller the names and amounts. If the transaction is conducted by a housing agency, it usually takes over the function of coordinating payments.
Emirates.Estate will help you buy a flat in Dubai
Finding investment apartments in Dubai, has never been easy, but now a team of specialists has made life more convenient for their clients. Emirates.Estate will help you buy not only off-plan real estate, but also finished flats for sale in Dubai with free tips on how to buy and sell residential or commercial real estate throughout the UAE.