Investor’s Rights & Duties: Laws on Buying / Renting Dubai Real Estate
Despite the great financial predicament that struck the emirate and the whole UAE in 2008, Dubai real estate has bounced back with robust returns and has been welcoming a lot of investors who are pouring out billions of dirhams on property investment.
However, some potential investors get into complications during the buying process. This is due to not having enough understanding on the legal processes that involve every purchase of property for sale in Dubai.
Understanding the Real Property Law
The Real Property Law of 2006 (Law no. 7) prescribes that the ownership of real property shall be restricted to UAE nationals, GCC nationals, fully owned GCC companies and public joint companies.
Property Ownership for non-GCC nationals:
However, there are some investment areas approved by the UAE Ruler where non-GCC nationals can invest. Under such areas, they can enjoy the following rights:
- Freehold ownership rights without time restrictions
- Leasehold rights for a period of not over 99 years
Popular freehold areas with property for sale in Dubai for non-GCC nationals include Palm Jumeirah, Downtown Dubai, Dubai Marina, Arabian Ranches, Jumeirah Village Circle, Jumeirah Lake Towers, Jumeirah Beach Residence, Al Barari, Business Bay, Dubai Sports City, IMPZ, Falcon City and many others.
The Dubai property law further states that the Dubai Land Department (DLD) has full authority to maintain a property register, issue title deeds, make property transactions and implement rules on dealings with Dubai properties.
Property Types for non-GCC nationals:
- Individual – The type allows an individual to purchase and register his/her desired Dubai properties under his/her own name.
- Joint-ownership – This type allows two to four people to own a shared property. All the joint owners will register the title deed under their names. Under this type, a joint owner may dispose the property without prior written consent from its co-owners.
- Offshore company – Dubai Land Department (DLD) only allows real estate registration for Dubai properties under this type if it is registered as Jebel Ali Offshore company.
Legal Considerations when Buying Property
For commercial transactions, a Sales and Purchase Agreement (SPA) is an important document that should be secured in any deal involving Dubai properties.
Before signing the SPA, make sure all issues are declared and resolved. If several ‘conditions precedent’ arise after the signing, the SPA may be considered invalid. Make sure that the agreement for your chosen freehold property in Dubai states a ‘Long Stop Date’, an end date that gives time for one or more parties to walk away from the deal.
Also research on the background of the company you are transacting with. Some clients get into trouble because after signing with an SPA because they sign with a shareholder and not with the actual owner of the purchased freehold property in Dubai.
Lastly, have a legal expert or lawyer that will guide you through the purchase of your desired property for sale in Dubai. Never get a template of SPA from the internet and never sign an agreement without reviewing the Dubai property law.
Legal Considerations when Renting Property
When renting a property in UAE, it is important to consider who you are living with. While a lot of expats rent homes with their friends for practical reasons, there should be serious precaution for people who are of the opposite sex. Under Article 356 of the UAE Penal code, an unmarried man and woman engaging in consensual intercourse will be punished by a minimum of one-year custodial sentence.
Renters of Dubai properties must consolidate their payment for the Dubai Electricity and Water Authority (DEWA) bills and must be paid by name that appears on the bill.
A tenant must only draw up a tenancy contract from a Real Estate Regulatory (RERA)-registered broker. A tenant must also be registered with Ejari, the chief rent regulator for Dubai real estate that will protect a tenancy agreement.
According to Dubai property law, is illegal to have a contract that states ‘non-renewable’ without a valid eviction notice. Rules against a landlord’s authority to evict are strictly implemented in the country.
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