Practical tips for property buyers and investors in Dubai

Practical Tips for Property Buyers & Investors in Dubai

Practical tips for property buyers and investors in Dubai

First-time buyers looking to invest in Dubai property should be aware of several elements

While Dubai’s real estate sector is enjoying an increase in completed residential properties, there are many elements that a new purchaser should be aware of when considering purchasing a property such as the following.

Power of attorney

Foreign first time purchasers should bear in mind that they can actually complete the transaction as per the title on the property. No party may act on or on behalf of a party without being the legal authorized signatory with the specific powers delegated to them in a Power of Attorney (POA). This POA can often cause extensive delays in particular if one of the parties is not in the UAE and an international POA will be required to be notarized and fully attested by the UAE Consulate in the country of origin in addition to the Ministry of Foreign Affairs and legally translated in the UAE. This POA can often end up being quite costly.

Corporate structures

If the property being sold is owned by a company or if the buyer is a company, there may be a complex and detailed list of companies, known as a holding structure involved, often in multiple jurisdictions such as JAFZA, or BVI which will require all relevant, original up-to-date company documents to be fully attested and translated which often leads to costly and extensive delays, if not managed correctly.

The Palm Jumeirah - SafranCorp
The Palm Jumeirah – SafranCorp

Special interests, probate, minors, companies

Buyers may purchase a property in their child’s name, or under a company where their child is a shareholder of which at the time of the purchase is quite easy for the purchaser. However, when it comes to reselling this property, special permission is required from Dubai Court, whereby, the court will act as the trustee and permission shall be sought prior to completing the sale. This is also the case for a will of a deceased person, whereby a Grant of Probate is required from Dubai Personal Status Court.

Practical tips for property buyers and investors in Dubai


While some purchasers opt to finance the purchase by way of a mortgage, most sales agreements will have a no-fault release clause. If the new purchaser fails to obtain the mortgage, they shall be released from the contract with no fault or liability afforded to them. However, in some instances the purchaser may be delayed or prohibited from obtaining some or all of the funds required to complete the mortgage application such as a failure to secure the lay down funds for the mortgage. This will cause the purchaser to default on the sale and be potentially liable to lose their security deposit, with essentially no fault of the purchaser.

Advanced payment and outstanding liabilities

Practical tips for property buyers and investors in Dubai

Often a mortgaged property shall require a mortgage clearance letter. To sell the unit, the seller may have an outstanding liability due to the developer or a bank, which they are not able to clear prior to the sale. In these cases, the seller will require the purchaser to pay off and clear any outstanding sums owed on behalf of the seller. This means that the purchaser will be paying funds on behalf of the seller, on a property that is not yet in the name of the purchaser.  In order to protect the purchaser’s funds, specific securities can be placed on the property before the Dubai Land Department so that the seller receiving the benefit of having the purchaser clearing their mortgage. Then they can proceed to sell the unit to a third party.

In practice, there are many potential dangers for purchasers, when entering into a sales & purchase agreements (SPA), however, with practical and well renowned legal advice, in addition to a well SPA the potential purchaser may mitigate any possible liabilities and in turn facilitate a successful transfer and avoid possible litigation.

Source: Arabian Business

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