Awatif Mohammad Shoqi Advocates & Legal Consultancy | View firm profile
Introduction:
Investing in off-plan properties in Dubai is a highly attractive opportunity, particularly because of the chance to buy at the lowest prices and benefit from favourable payment plans. However, the process involves some legal considerations, particularly under Dubai Law No. 13/2008 on the Interim Real Estate Register. Here are the significant steps and verifications buyers must complete before purchasing an off-plan property.
- Verify Eligibility for Ownership
Foreign buyers must ensure that the off-plan property they are purchasing is located in a freehold area—designated zones where non-UAE nationals are legally allowed to own properties. A full list of these areas can be obtained from the Dubai Land Department (DLD).
- Registration in the Interim Real Estate Register
All off-plan property sales must be registered in the Interim Real Estate Register maintained by the DLD. It is the developer’s responsibility to register the sale within 60 days of the transaction. If the registration is not completed, the sale may be deemed invalid, leading to potential legal disputes.
- Legal Due Diligence on the Developer
Buyers should perform due diligence by checking the developer’s credentials with the Real Estate Regulatory Agency (RERA). It is essential to ensure the developer:
-
- Has obtained all necessary land ownership and approvals.
- Has an escrow account dedicated to the project, as mandated by Dubai law.
- Possesses the required permits for the development.
- Property Registration Application
When registering an off-plan unit, buyers must follow specific procedures as outlined by the DLD. The process involves submitting all required documents, including personal details and any applicable financial agreements, to ensure the transaction is recorded correctly.
- Fees and Associated Costs
Dubai Law prohibits developers from imposing additional fees for selling or reselling off-plan units unless such charges are officially approved by the DLD. Buyers should ensure that any administrative expenses associated with the transaction are transparent and authorized.
- Review of the Sale Contract
The sale contract should meet all legal formalities, including approval from competent authorities, to ensure its validity. Informal contracts, not registered or approved, may be considered invalid, leaving buyers without legal recourse.
- Completion and Final Registration
Upon completion of the project, developers are required to register the finished unit in the property register. The buyer’s ownership of the unit will be formally recognized only once all contractual obligations are met and the final registration is complete.
- Developer’s Rights in Case of Contractual Violation
If a buyer defaults on an off-plan sale agreement, developers are required to notify the DLD and follow legal procedures. Article 11 of Dubai Law No. 13/2008 outlines the steps developers must take, including giving buyers 30 days to resolve any issues before legal action. Depending on the project’s completion percentage, developers can:
-
- Retain the contract.
- Request public auctions.
- Cancel the contract with deductions.
In cases where the project is cancelled or never started, buyers are entitled to a full refund.
- Correct Area Measurement
Buyers should confirm the unit’s area before finalizing the purchase. If there is an increase in the area upon delivery, developers cannot demand additional payments. However, if the unit is smaller than agreed upon, the buyer may be entitled to compensation.
- Enforcement of Legal Violations
If a developer or broker violates the law, authorities will investigate and take necessary action. RERA is empowered to prepare a report on violations and escalate the matter to relevant authorities for further investigation and enforcement.
Conclusion:
Investing in off-plan property in Dubai offers several financial advantages, but it’s crucial to ensure all legal steps are followed. Buyers must verify property registration, the developer’s credentials, and contract validity to safeguard their investment. Always consult legal professionals for guidance on Dubai Law No. 13/2008 and related regulations.