Investing in the real estate is increasingly gaining demand in the world today. People are considering investing in real estate as always profit oriented. The value of property and land tends to appreciate on a constant figure. Investors are hence making good returns from buying and selling of real estates. The process of buying and acquiring real estate is hence complicated and very sensitive (Bagaeen, 2007). People have been conned their monies and hence making the process require a legal framework before producing any payment.
In Dubai, the process of buying and selling real estate is well outlined making it to easily understood by the practitioners and any other involved parties. The property market in Dubai is considered different when compared with other counties (Renaud, 2012). The process requires an agent of real estate that acts as a guide in undertaking all the required procedures. These real estate agencies help people in relocating in Dubai and gives guidance on the best buying places (Renaud, 2012).
Any individual from any part of the world can acquire freehold property in Dubai. This is according to His Highness Emirate of Dubai ruler. It is not a necessity to have residency or any other similar permit in order to become a property holder in Dubai. The process of buying property therefore takes an average of about 30 working days (Bagaeen, 2007). This is counted from the day the Sale Agreement is signed. Dubai is hence considered to have straightforward procedures of purchasing real estate properties (Renaud, 2012). The procedures are hence outlined and explained in details.
Firstly, the seller and the buyer agree on the sales terms. This is arrived at after a lot of bargaining and negotiations are carried out between the seller and the buyer. These terms must be precisely defined and must include the sale value (Renaud, 2012). Then, a Memorandum of Understanding is signed between the seller and the buyer after the buyer deposits ten percent of the sales value.
This Memorandum of Understanding is signed in presence of a witness most commonly an advocate. The parties involved then proceed to the developer offices in order to apply for a certificate of No Objection. The certificate shows that the seller can never claim the property back. It also indicates that there are no hindrances or any other individual objecting the sale of the property. The developer against any fee payment gives the No Objection Certificate after he is satisfied that the amount due to developer is settled in full (Bagaeen, 2007).
After the developer issues the No Objection Certificate, the parties then proceed to Dubai Land Department offices in order to transfer the ownership officially. Dubai Land Department will hence insist on full settlement of the purchase price in form of a cheque that is payable to the seller on the actual day of transfer (Renaud, 2012). After completion of the formalities, the Dubai Land Department officially issues a new title deed to the buyer. This affirms that the ownership of the land has been officially transferred from the seller to the buyer.
The bank is involved when the buyer is using a mortgage in order to purchase the land. The buyer is supposed to settle any mortgage balance on the property prior to getting the No Objection certificate (Bagaeen, 2007). This definitely complicates the transaction as well as increasing the buyer’s risk. The whole land buying process requires the buyer to have an original passport. The following fees are hence payable while selling and buying real estate in Dubai. These include NOC fees, Real Estate Agent commission, transfer fees, and the mortgage registration fees (Renaud, 2012).
There are various options of property ownership in Dubai. Individual ownership is the most common whereby the title deed is supposed to hold the owners name. Joint individual ownership is mostly visible in married couples (Balakrishnan, 2008). Traditional offshore company ownership is also present in Dubai. An investor registers the assets in the name of the corporate entity that is established in the traditional offshore jurisdictions. In addition, the Jebel Ali Free Zone offshore company ownership is present.
This aroused after prohibition of foreign offshore companies registration in 2011. There exist different types of freeholds and leaseholds properties in Dubai. The freeholds properties include free tail, life estate, and free sample. The leasehold estate is an example of leasehold estates in Dubai (Thacker, 2008). There are two types of easements in Dubai (Balakrishnan, 2008). These easements are the benefit easement and the burdening easement.
The benefit easement gives the right of crossing neighbor’s property in order to have access to yours. The burdening easement gives the neighbor the right to cross your property as he accesses his. A lien is usually a notice that is attached to someone’s property indicating that he owes a creditor some money (Thacker, 2008). In Dubai, different types of property liens also exist.
These include judgmental liens, property tax liens, mechanic’s liens, and Family Law Real Property liens. Two types of restrictive covenants exist in Dubai. These include the noncomplete covenant and the nonsolicitation covenant. These two restrictive covenants restrict the behavior of a former employer to his former employee (Brendel et al, 2010).
References
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Brendel, N. R., Barrette, A. L., & El-Riachi, W. (2010). The availability in the UAE of liens to
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Renaud, B. (2012). Real estate bubble and financial crisis in Dubai: Dynamics and policy
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Thacker, S. (2008). Dubai Property Law. Available at SSRN 1142803.