Guidance

How to buy property in the UAE

How to buy, rent or let property in the UAE.

Overview

The UAE is a federation of seven autonomous Emirates: Abu Dhabi, Dubai, Sharjah, Ras Al Khaimah, Fujairah, Umm al Qaiwan 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.

For more information on the UAE legal system, see the Abu Dhabi Government Portal. This guide is intended to help prospective buyers, landlords and tenants navigate the process smoothly.

How to buy a property

Buying a property that is being resold in the Emirates is very 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 of between 5% - 15% must be paid. You will also be expected to pay a transfer fee of between 1% - 7% and estate agent fees of between 2% - 3%.

Buying property off-plan is very common in the UAE; however there have been numerous cases were British nationals have lost their investments due to properties not being completed on time. If you are considering buying off-plan you should consult a registered developer and discuss your requirements. Dubai has a list of registered developers on the Real Estate Regulatory Agency (RERA) website.

Checklist

When you have found a property and checked that the developer is approved through a regulatory agency:

Make sure:

  • you have checked out other properties that the developer has completed to confirm the finishes and workmanship
  • you are fully aware of how much you will be expected to pay and when
  • you have confirmed that as a foreign investor you can purchase property in the area of your choice
  • you, or your lawyer have read the finite details of the contract to ensure you understand the timescales involved and what responsibilities the developer has if the project is not completed.

Developers’ charges differ from emirate to emirate however you should expect to pay increments of 10% - 20% every three months 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. Agent’s fees are usually between 2% - 3%. You should confirm this before entering into a contract and check for any hidden costs.

There are designated areas in Abu Dhabi where foreign nationals can buy property as ‘freehold- leasehold’. This means a foreign national can only lease the land but has freehold rights on anything above the land.

How to choose a property in the UAE

Research is paramount and will hopefully help you avoid any pitfalls in the future. There are areas in the UAE were foreign investors cannot purchase freehold property. You should seek independent advice before entering into a contract.

The vast majority of foreign nationals buy property off-plan directly from the developer and negotiate independently. You should consider seeking legal advice before signing a contract so you are fully aware on the timescales and completion dates as well as all the costs involved.

If you are buying a property off-plan, expect to pay around 10% as an initial deposit and then staged payments on specified dates until the property is completed. This should be clearly stated in your contract. There is currently no legal requirement to acquire the services of a lawyer to purchase a property however we would strongly advise you to do so.

Buyers checklist

  • your lender has approved your loan and you have taken into consideration all costs involved to include deposit, agents fees, transfer fees etc
  • you have spoken to a registered real estate agent
  • you have confirmed that as a foreign investor you can purchase property in the area of your choice
  • you have conducted a price check to confirm the property you are purchasing is being offered a fair market value
  • you have sought legal advice and are aware of your contractual obligations and have highlighted any concerns you have with the relevant bodies

Mortgages

Before you do anything you need to consider what funds you have available, you should consider the cost of the property, the deposit, transfer fees and estate agent fees. You should also consider the fluctuation of the local currency against the GBP and consider the consequences if the market changes.

Mortgage laws often change. Keep up to date with local news through UAE newspapers so you know what the changes mean for you. For more information about mortgages in the UAE, check with the UAE Central Bank.

Borrowers checklist:

  • you have found a lender and confirmed how much you can borrow and what you will be expected to pay per month
  • you have been advised how much the fees are on top of the purchase price of the property and calculated your costs accordingly
  • you have opened a local bank account and provided all the paperwork required
  • copy of your passport
  • ID card ( if applicable)
  • proof of address
  • proof of residence
  • bank statements
  • letter from employer confirming salary

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. For Dubai, ask to see their RERA card, which will confirm that the agent is acting in a legal capacity and not freelancing which is illegal in the UAE. You should expect to pay a fee to the agent of approximately 5 % of the yearly rent.

Read over the contact and make sure you understand what you are signing, what are your responsibilities? Are there any hidden costs? What are the landlord’s responsibilities for repairs and maintenances?

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. The Municipality of Abu Dhabi has more information on how it works.

In Dubai, a legal contract should be registered through Ejair, 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 Ejair, the contract cannot be changed by the landlord.

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. At this time you will be expected to deposit 5% of the annual rent to the landlord to secure the property. 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. You should photocopy the cheques you are submitting as proof of what you have provided.

It is illegal to bounce a cheque in the UAE and you could face arrest and detention if a cheque is submitted without adequate funds to cover the cost.

Renters checklist

  • research the market, speak to local estate agents, check out local websites and newspapers
  • consider the local amenities; you should also consider the traffic in your area as this can significantly add to the length your journey
  • you should consider 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

Documentation required:

  • copy of your passport
  • ID card ( if applicable)
  • proof or address
  • proof of residence
  • bank statements
  • letter from employer confirming salary

Visa requirements for buying a property in the UAE

The UAE government has a six-month visa called “Property Holders Visa” which allows foreign investors to stay in the UAE for up to six months. The stipulation is that the property you are purchasing must be worth over 1 million dirham and the ownership of the property must be for an individual owner not a company or multiple owners. You cannot work on this visa.

For more information on visas, contact the General Directorate of Residency and Foreigners Affairs in Dubai, the General Directorate of Residence and Foreigners Affairs in Abu Dhabi or the UAE Embassy in London.

What you should do if things go wrong in Dubai

According to Dubai’s Real Estate Regulatory Agency, the majority of problems originate from buyers 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 has acted inappropriately you should seek legal advice. If the property is in Dubai, you should also consider registering your complaint with RERA as they have a legal department that deals specifically with complaints relating to property issues in Dubai.

You should submit your complaint, giving as much detail as possible. You should also provide copies of all your documentation including your contract and any correspondence between you and your developer so RERA can consider all the facts.

The Legal Committee will look into the case and speak to all parties concerned to try to confirm the details of the complaint. They will act as a mediator to try and find an amicable solution between both parties and give their opinion on who they believe is at fault.

If both parties agree on their findings then each party will receive a copy of the minutes of the meeting for their records. If both parties are not in agreement with the findings of the legal committee then they will have to file a case at the court within RERA. A judge with hear the case and a decision will be made. You should be aware that it can be a lengthy process and 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 seek independent legal advice, check with the respective regulatory bodies (if they exist) and try and negotiate with the developer directly so that you can find an amicable solution. You can also file a case in the courts but be aware that all court hearings are conducted in Arabic and it’s unusual for a translator to be allowed to enter the court to assist you.

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 or mediate on your behalf. We can advise on what the processes are and who you should contact if you have a problem.

Although the British Embassy cannot recommend a lawyer, we can provide you with a list of local lawyers.

For further information on what the embassy can do for you see Support for British Nationals Abroad . We’ve published advice on which UK authorities to contact if you think you have been a victim of property fraud.

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. RERA has some useful tips for landlords.

In Abu Dhabi, tenancy contracts need to be registered through the Tawtheeq system. Make sure you are familiar with this process and if you are unsure, seek legal advice.

For the other Emirates, check with local lawyers to see what your obligations are as a landlord.

Lawyers

The British Embassies in Abu Dhabi and Dubai hold a list of lawyers. 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 should things go wrong.

In Dubai, lawyers must be registered and approved through the Rulers Court before being allowed to practice law. To check if a lawyer is registered in Dubai, contact the Rulers Court on 04 03531060 or email Sara Dawood: sara.dawood@legal.dubai.gov.ae or nidal.villegas@legal.dubai.gov.ae

If you feel your lawyer has acted inappropriately or not represented you in accordance of the law, you can complain to the Ruler’s Court in Dubai or the Ministry of Justice in Abu Dhabi as they cover all the Emirates except for Ras Al Kamiah.

For Ras Al Kamiah, you should lodge your complaint directly with the municipality.

Disclaimer

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.

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