Guidance from the British Embassy on buying, renting or letting property in the United Arab Emirates.
The UAE is a federation of seven autonomous emirates: Abu Dhabi, Dubai, Sharjah, Ras Al Khaimah, Fujairah, Umm al Quwain and Ajman. This means that there is a twin legal system which includes local judiciary and the federal judiciary. Because of this, there can be significant differences between the emirates when dealing with property issues.
Useful information on property matters in Abu Dhabi can be found under the “Housing and Property” section on the Abu Dhabi Government Services website.
How to buy property
Buying property that is being resold in the emirates is similar to the process in the UK. You find a property and place a formal offer, normally through the agent. If the offer is accepted then a deposit should be paid (usually 10%). You will also be expected to pay a transfer fee and estate agent fees.
Buying an off-plan property is common in the UAE, however, you should contact the relevant authorities in the respective emirate to complete your research about the developer and the project before taking any decision about buying. Charges for developers differ from emirate to emirate and you may need to pay increments on a regular basis until the project is completed. You will also be expected to pay a premium which is normally a percentage of the original price and a transfer fee. You should confirm this before entering into a contract and check for any hidden costs or information on what happens if the project is not completed on time. In Dubai, the Dubai Land Department have an Escrow Account Service to help safeguard the buyer and the developer when transactions are being made.
How to choose a property in the UAE
There are designated areas in the UAE where foreign nationals can and cannot buy property as freehold and leasehold.
We suggest you:
- check that the developer or real estate agent is approved through a regulatory agency
- check out other properties that the developer has completed to assess the finishes and workmanship
- are fully aware of how much you will be expected to pay and when
- have confirmed that as a foreign investor you can purchase property in the area of your choice
- conduct a price check to confirm the property you are purchasing is being offered at a fair market value
- ensure your lender has approved your loan and you have taken into consideration all costs involved to include deposit, agents fees, transfer fees etc
- have sought legal advice and are aware of your contractual obligations and have highlighted any concerns you have with the relevant bodies
How to rent a property in the UAE
Renting is common place in the UAE. In recent years rental prices have significantly dropped making the market a more competitive place.
You should only use registered agents. In Dubai, ask to see the agent’s RERA card, which will confirm that the agent is acting in a legal capacity and not freelancing which is illegal in the UAE. If you are using an agent, you should expect to pay a fee to the agent which is normally a percentage of the yearly rent.
When you find a property you are happy with, you will normally be expected to provide a copy of your passport and proof of residency (or proof that your residency is in process). At this time you will be expected to pay a percentage of the annual rent to the landlord as a deposit. You will also be expected to provide several post-dated cheques; however this varies from landlord to landlord. It is important to ensure the contract clearly states when the cheques will be submitted and that you have photocopied them as proof of what you have provided. Please note that it is illegal to bounce a cheque in the UAE and you could face arrest and detention if one is submitted without adequate funds to cover the cost.
In Dubai, a legal contract should be registered through Ejari, a system designed to regulate and facilitate the rental market of Dubai. The contract should clearly state what the landlord’s responsibilities are as well as the tenants. Once registered with Ejari, the contract cannot be changed by the landlord.
In Abu Dhabi, there is mandatory registration of tenancy contracts through a system known as Tawtheeq. Through a database for all short term tenancy contracts, this registration system safeguards the rights of landlords and tenants.
- Research the market, speak to local estate agents and check local websites and newspapers. 2 You should consider payments that need to be made upfront: your deposit, brokerage fees, relocation costs and utilities connections etc.
- If you are using an agent you should check they are registered.
- You should have been made aware of what your responsibilities are within your contract – make sure you read the small print.
- Consider legal advice before signing the contract.
- Check whether your contact needs to be registered.
- Consider the local amenities; you should also consider the traffic in your area as this can significantly add to the length your journey.
- You may wish to consider insuring your contents.
What you should do if things go wrong in Dubai
Many problems originate from buyers or people renting not seeking legal advice or reading their contracts thoroughly. When seeking legal advice, make sure you speak to a local lawyer.
If you feel you have been treated unfairly or your developer/landlord has acted inappropriately, you could consider approaching RERA as they will be able to look at your contract and provide you with specific advice. If you decide you wish to file a complaint against your developer/landlord you will need to provide as much detail as possible (with evidence). You should be aware that sometimes this can be a lengthy process and it can take many months and, on occasions, years for cases to be concluded.
What you should do if things go wrong in the other emirates
If you have a problem in the other six emirates, you will need to contact the local Municipality or try and negotiate with the developer/landlord directly so that you can find an amicable solution. You can also file a case at the court however, we suggest you obtain advice before doing so.
Your responsibilities as a landlord in the UAE
If you buy a property to let, you have legal responsibilities as a landlord. You should have a contract drawn up between you and the tenant stating what your obligations are, such as maintenance, service repairs and rental collections etc. You should consider seeking legal advice to ensure you are acting in accordance with local law.
By law in Dubai, you must register your contracts through Ejari. Your contract will be kept on file for the duration of the tenancy where it cannot be altered. This system is designed to help resolve any disputes that may arise. More information can be found on the Dubai Land Department. In Abu Dhabi, tenancy contracts need to be registered through the Tawtheeq system. For the other emirates, check with the local Municipality or a local lawyers to ask what your obligations are as a landlord.
What the Embassy can do
The British Embassies in the UAE have no jurisdiction or authority to become involved in private legal matter overseas nor can we intervene in the processes of another country. We can provide advice on what the processes are and who you should contact if you have a problem. If you are involved in a case then we can try and get information on this and provide updates.
Although the British Embassy cannot recommend a lawyer, there is a list of English speaking lawyers on our website here. If you decide to hire a lawyer you need to be aware that only a local lawyer can represent you in the UAE. A lawyer from overseas can offer you advice but they have no legal jurisdiction in the UAE and will not be able to represent you in the UAE.
If you feel your lawyer has acted inappropriately or not represented you in accordance of the agreement make between you, you can lodge a complaint with the Dubai Legal Affairs Department in Dubai or the Judicial Department in Abu Dhabi. For other emirates, a complaint must be filed with the local Municipality.
While we hope that this information is useful, please be aware that it is not intended to be the only guidance for prospective buyers to follow when considering making a purchase. In addition, we make no representation as to the quality or accuracy of the information which is available at the web addresses listed in this guide, nor can we accept any responsibility for the content that is hosted on them. We strongly recommend that prospective buyers of property in the UAE seek independent legal and financial advice at all stages of their purchase.