Foreigners are given free title holder ownership for properties in Dubai. This is actually one of the driving forces in the emirate’s thriving property market. However, much confusion exists when it comes to the procedures for land titleship and ownership, most particularly when it comes to resale properties. The thread was an attempt by members to shed some light on this confusing system, which is based mostly on the experience of veteran members.
An informal step-wise instruction for resale procedures was offered at the discussion wherein it entailed the following steps:
1. buyer1 buys direct from the developer
2. buyer1 decides to re-sell property at a premium price
3. buyer1 sells directly or through an agent
4. Buyer1 and buyer2 negotiate price, terms, conditions, etc.
5. buyer1 and buyer2 draw a Memorandum of Understanding drafted by a lawyer – stating the agreed price, price validity, payment details, terms and conditions, project and ownership details, time to transfer, penalty Claus, etc
6. both parties should sign the MOU and buyer2 should seal the contract with buyer1 through a token/deposit amount, which is the amount and method agreed upon by the two parties
7. buyer1 will make an appointment with the developer regarding transfer of ownership
8. before actual transfer, buyer2 will handover payment check plus premium check in whatever mode stated in the agreement
9. both parties will sign transfer and assign some forms inside the developer’s office
10. no transfer fees should be paid to the developer in this procedure
11. If payment of property were at 20% to 30%, this obliges the developer to take buyer2 to the Land Department so as to change title deed and make the transfer official.
Albeit an illustration of a step-by-step procedure, most members felt that the government has yet to implement clearer rules and regulations on reselling properties. In view of this confusing procedure, most members advised the use of a reputable lawyer and a professional agent who will stand in the middle of each transaction so as to ensure that each party abides by the MOU or MOA.
Thus, as a rule of thumb, when purchasing a property in Dubai, every property transaction should pass through the original developer. This is to ensure that a buyer actually owns what is being sold. This is a common step which buyers and sellers should practice due to the fact that it serves to protect the buyer from any dispute on the ownership of the property being bought. Plus, this is important because Dubai has yet to provide an independent registry of freehold titles which can be available for inspection.
For any dispute with regards to the ownership, buyers can only take their case to court, which is really a time-consuming process. In addition, there is no guarantee that the ruling of the court will be in their favor. In fact, the transaction can be declared void.
Therefore, practicing due diligence and involving the original developer is absolutely necessary so as to safeguard any transaction until the publication of a comprehensive Dubai Property Law is mandated.