property law

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June 22, 2023

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The UAE is a popular destination for real estate investment due to its booming economy, attractive tax benefits and stable political environment. Purchasing a property in the UAE can be an attractive investment opportunity for both local and international buyers. However, purchasing a property in the UAE can be a complex process with several legal requirements and regulations that must be followed in order to ensure a smooth and legally compliant transaction.

In this article, we will explore some of the key conditions that must be fulfilled in order to purchase a property in the UAE.

Ownership restrictions: There also exists certain restrictions that must be considered while purchasing a property in the UAE. Under theUAE Civil Code property rights include “freehold”, “usufruct” and “musataha”. Long-term leases in the UAE are generally governed by the laws of each respective emirate. Freehold is the most superior form of property right as it allows for full ownership; whereas usufruct and musataha are more restrictive in nature allowing ownership for a limited time with some restrictions.

Residents cannot purchase properties in any location that they desire, the government of UAE has allocated certain designated areas in all the emirates that are specified for foreign ownership, which is generally known as “freehold” properties. There are relevant laws in place for each emirate to govern these areas. Further, there are specific regulations and requirements that need to be met.

Legal status: Buyers must ensure that the property they are purchasing has a clear legal status. The property should not be involved in any legal disputes of encumbrances. Buyers should also verify the ownership of the property and ensure that the seller has the right to sell the property.

Payment of deposit: Buyers are required to pay a deposit of at least 10% of the property price to secure the property.

Financing: If you plan to finance your property purchase in the UAE, you must first ensure that you have the necessary financing in place before proceeding with the transaction. This may include obtaining a mortgage or other form of financing from a local or international lender.

Due diligence: Buyers should conduct through due diligence before purchasing any property in the UAE. This includes verifying the property’s ownership and legal status before the appropriate authority of the respective emirate in order to ensure that there are no disputes or legal issues. It is important to conduct thorough due diligence to ensure that the property is free of any liens or encumbrances, and that all the necessary approvals and permits have been obtained.

Contracts: Buyers must ensure that all contracts and agreements related to the purchase are legally compliant and that they accurately reflect the terms of agreement. For example, a sale purchase agreement must include details such as the terms and condition of the sale, including the purchase price, payment terms and delivery date.

Registration and transfer: Finally, you will need to register and transfer ownership of the property in accordance with the UAE law. The transfer of ownership of the property is completed through the issuance of a title deed by the Dubai Land Department (DLD) or the respective land department of the emirate where the property is located. Buyers are required to pay a range of fees, including registration fees, agency fees and transfer fees which can range from 2% to 7% of the purchase price.

Overall, purchasing property in the UAE can be a complex process that requires careful consideration of legal and regulatory requirements. It is important to note that the legal requirements for purchasing a property in the UAE may vary depending on the emirate where the property is located, and the type of property that is being purchased. Property buyers in the UAE must ensure that they meet all the necessary conditions and due diligence to ensure a smooth and legally compliant purchase process. Therefore, it is advisable to seek professional legal advice before making any property transactions in the UAE.


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