Home page - Information - Real Estate Law

Transfer Fee

A transfer fee will be required for transferring the ownership of a property to another person which has to be paid in most cases by the buyer directly to the land department.

Landlords are required to bring a no- objection certificate (NOC) from the developer before transferring the property. They can pay a 1% transfer fee to the land department.

It is advisable to check with your developer and the land department for the latest information regarding transferring your property. You can also obtain further information from the Real Estate Regulatory Authority (www.rera.ae)

FAQS

Q: Which properties are eligible for registration with the land department?
A: both off plan and completed properties. The project has to be registered with the land department before a property transfer can be done.

Q: can any owner from any project register with the land department?
A: the land department has started to register titles in a number of projects. Check with your developer whether or not the project has been registered with the land department.

Q: If I don’t register my property now, can I do it at a later stage or is there a deadline?
A: Yes.

Q: Do I need to turn up in person for registration processes?
A: Yes, or else you can authorize someone to come to register your property with notarized power of attorney.

Q: Can mortgaged properties be registered?
A: yes, it is possible. The land department will require the presence of the customer and the bank representative

Real Estate Authorities in Dubai

The Dubai Land Department (DLD) oversees the registration of a title and all other related property rights in Dubai. Dubai Law no. 7 of 2006 created the Property register within the DLD. The Real Estate Regulatory Authority created last year, is positioned under the umbrella of the DLD and serves as the regulatory and enforcement arm of the DLD. It is envisioned that RERA will undertake all licensing of Real Estate related activities and entitles by the end of the year.

Property Laws

Since the issuance of the property registration law in 2006, which among other things, explicitly permits foreign free hold ownership of land in Dubai in designated areas, several key pieces of legislation have been issued to deal with increased demand in the market for investor protection and the regulation of Real Estate developers and brokers.

The brokerage by law

By law no 85 for 2006 ( the brokerage by law) states that all real estate brokers- in addition to brokerage houses- operating in the emirate of Dubai must be licensed by RERA. The brokerage bylaw requires brokers to submit documentation of qualification and credentials, as well as pass an examination. If an applicant satisfies all requirement of RERA, he or she will be issued a brokerage card.

The Escrow account law and Regulations

Law no. 87 for 2007 ( The Escrow account law) was issued in response to the call of investors previously defrauded by the purported developers who took deposits for fictitious developments and the fled the country, outside of the powers of any extradition treaties.

The Escrow account law calls for the deposit of funds by purchaser and financiers alike for off plan project in to an escrow account opened for the specific project by the developer. The escrow account is to be opened with a bank and operated by a trustee ( also a financial institution) and governed by the provisions of an escrow agreements between the developer and the trustee. The bank and trustee must be selected from the list of institutions approved by the DLD.

The escrow account law also requires developers to satisfy a number of conditions before a developer can register an off plan project and commence advertising, marketing and selling of property, include approved architectural design and layouts, financial statement for the development certified by a certified accountant , and an undertaking from the developer in respect of commencement and completion of the project.

Other conditions must be fulfilled for the developer to withdraw monies from the escrow account during construction – primarily based upon the meeting of construction milestones, recently, RERA issued regulations (The escrow account regulations) to provide further clarification as to payments that can be made from escrow accounts. The escrow accounts regulations, for example, state that developers cannot extract any amount of profit until 60% of the project has been completed.

Furthermore, the escrow account law calls for stiff penalties to be imposed on developers in beach of its provision including hefty fines and/or imprisonment.

Upon completion of the project , and the developer can withdraw all the remaining monies in the escrow account , save 5% of the total sum of monies received, which shall only be released to the developer one year after the units are registered in the name of the purchaser.

Landlord tenant law

Law no 26 of 2007 (the landlord tenant law) governs all aspect of all landlord tenant relationships. This law aims for transparency and certainly, emphasizing rights of tenant. The landlord tenant law states that the landlord can raise the rent on new lease until two full years have elapsed from the original lease commencement date, and the landlord must provide 90 days written notice to the tenant if the landlord opts not to renew the lease ( unless agreed otherwise). Furthermore, if a tenant files a complaint with a Dubai rent committee, the landlord is prohibited from taking any retaliatory action, including calling the police to evict the tenant or shutting off tenants supply of water and electricity. However, the Dubai landlords and tenants law is not one sided, and it does afford the landlord rights to evict the tenants for cause-including failure to pay rent , using the property for illegal activities or damaging the leaseholds.

Jointly owned property law

The jointly owned property law (Dubai law no. 27 of 2007) deals with the regulation of freehold in multi unit buildings or joined property. Jointly owned property is defined in the jointly owned property law as a whole building, or any part thereof, or land, where such property is divided into units designated for absolute ownership. A part of the building or land shall be designated as common parts. This law therefore applies to and regulated all jointly owned property in Dubai, from apartments within a tower to attached Villas which share common walls.

The Dubai jointly Owned Property law calls for the delineation of common areas within a site plan, the creation of an owners association to regulate the jointly owned property and the assessment of service charges for the respective properties.