Comprehensive Guide about Real Estate Laws in Dubai

Knowing Dubai real estate laws is important for both investors and real estate agents, to make business without problems. Likewise, with these laws, the emirate government seeks to make the transaction process easier for everyone involved in real estate. Furthermore, with compliance with the laws you will not have the slightest problem if you want to acquire or invest in real estate property.

In this article, you will learn everything related to the topic of buying and selling property in Dubai or the UAE. Similarly, you will have a broader understanding of the laws in this country for negotiating real estate.

Why buyers must Know the Dubai Property Laws?

In Dubai, there is currently growth in the infrastructure of the city and global investors are showing interest in properties in the country. For this reason, the UAE government implemented real estate laws in Dubai to make negotiations easier and fair for all. Thus, if you are an investor, you must strictly follow the provisions of this law to complete the legal processes.

Likewise, if you are an investor or real estate agent, you must understand real estate laws very well to do your business without risks. Additionally, according to Dubai real estate laws, you will need a residential permit to live in the Emirates. This is if you are purchasing a commercial property or residence in the country.

Compared to other countries and cities in the world, in Dubai, there is no document process when purchasing any asset. Therefore, the process is easy because you will only need to sign a contract to complete the transaction. For this reason, you must be extremely careful with the rules for buying and selling real estate in Dubai so that the investment is truthful.

Additionally, knowing the laws perfectly will help you better manage the legal rights and risks of owning or selling property. Furthermore, the advantages of these laws are not only for Dubai but for the rest of the Emirates, so you will be able to do business.

Real Estate Laws in Dubai

By understanding Dubai real estate laws and regulations well, you can make the best decision when approaching the real estate market. Next, you can see the most important aspects of the real estate laws of the country:

Property ownership

According to Dubai real estate laws, Emirati citizens and foreigners can purchase property in specific areas. Likewise, if you are a foreigner, you may have lease rights for 99 years in some areas of the UAE. However, you must take the following into account when purchasing property in the country:

• ·      As a buyer, you must deposit between 10% and 20% of the total cost of the property at the time of purchase.
• ·      In the case of purchasing new construction projects, you must pay the cost in installments.
• ·      You can transfer the amount to the seller or his representative in the purchase contract.
• ·      If you buy a property through a seller, you will have to pay 2% of the total cost as a fee.

Real estate regulations

In Dubai, the Dubai Land Department or DLD along with the Real Estate Regulatory Agency or RERA governed the real estate sector. Therefore, these entities are responsible for overseeing property records and licensing of real estate professionals. In addition, both government institutions monitor compliance with real estate laws in this Emirate.

Property registration

According to the real estate law, you must compulsorily register real estate transactions in Dubai. Likewise, the DLD will be responsible for maintaining the Property and Real Estate Registry, which will register ownership and other rights. In addition, the authorities calculate the registration fees based on a percentage according to the value of the property.

Off-plan properties

Dubai real estate laws established regulations for the protection of off-plan property buyers because this type of business has its risks. Similarly, to maintain deposit accounts, developers have to be approved by the Real Estate Regulatory Agency. Also, as a buyer, you must check that the developer is accredited and adheres to the RERA guidelines while purchasing the off-plan properties.

Property financing

The Central Bank of the UAE regulates mortgage financing and other options for property buyers in Dubai. Likewise, according to Dubai real estate laws, accredited institutions with LTV or loan-to-value and other requirements must guarantee responsible credit.

Tenancy laws

The UAE real estate laws for leasing govern your rights and obligations whether you are a landlord or a tenant. In this case, this includes the rental contract, its increase, and solutions to discrepancies.

Dispute resolution

The resolution of property disputes in the emirate can be resolved through the Rental Dispute Resolution Center (RDSC). You can also resolve it through the courts in Dubai. Similarly, the RDSC is a form of court that specializes in the rapid resolution of conflicts related to rentals.

Taxes and fees

Due to Dubai real estate laws, property taxes are not charged. However, owners and tenants may be required to pay fees concerning services. Therefore, these payments will be for maintenance services and the payment of municipal rates. Likewise, both buyers and sellers will have to pay their registration fees plus the commission of the agent and other additional costs for the transaction.

Dubai Property Laws in UAE 2023 for Real Estate Developers and Brokers

Currently, the Dubai government has implemented new property laws for real estate developers and brokers. Below you will learn about these laws that you must comply with if you want to work in some of these areas:

Real estate developers

In compliance with Dubai real estate laws 2023, it is mandatory for real estate developers. Thus, you will have to start by obtaining a license to be able to begin your work as a real estate developer. Also, you will have to provide all the information about your projects, as well as the type of property, where it is located and the size, among others.

Likewise, you must have a development administrator account. In the same way, it is like the escrow account and in this case, the money deposited by those who buy will be deposited in these accounts.

Real estate brokers

If you want to work as a real estate broker, keep the following in mind according to the new law:

• ·      If you are going to work as a real estate broker, you must undergo training before starting work in Dubai. This training will be at the Dubai Real Estate Institute.
• ·      You will have to obtain an accredited license by passing the exam at RERA.
• ·      You will need to follow specific steps to work with different types of clients

Essential Guidelines from Professional Real Estate Lawyer

Lawyers who work with real estate know the Dubai real estate laws perfectly. Therefore, if you are a foreigner, it is best to hire the services of these professionals to get a good deal. Here is what you should know as a buyer about the essential steps a real estate professional takes:

• ·      No person can work with Real Estate Brokerage if they are not registered with the appropriate authority.
• ·      The real estate agent must be licensed to carry out activities related to this.
• ·      A good Real Estate Lawyer will have to show all the details regarding the conditions and terms to the client.
• ·      The real estate lawyer will have to be responsible for losses caused to the contracting parties due to any deception or fraud that he has committed as a lawyer.

Additionally, it is advisable that as a buyer, you ask the real estate broker or attorney for their credentials before hiring them.

Real Estate Ownership

Regarding real estate property, the Civil Code contemplates the following:

• ·      Obtaining absolute ownership of real estate such as the rights to use lands and properties permanently.
• ·      Right to build on the land for no more than 50 years (Musataha).
• ·      Right to use land or property belonging to other people but not exceeding 99 (Usufruct).

Real estate ownership in Dubai for UAE/GCC nationals

The authority in charge of registering property rights such as Musalaha, usufruct, or freehold is the Dubai Land Department. However, there is an exception and that is the Dubai International Financial Center because it has its own property rules. In addition, it has a specific registry for properties that are in the DIFC.

Similarly, in the Dubai real estate laws, Emiratis and GCC citizens will get sole ownership of their companies. In addition, they will obtain full ownership titles over all the properties. In addition, they will obtain the right to extend leases of up to 99 years in Emirati areas except in the free zone.

Real estate ownership in Dubai for Foreign nationals

Under real estate laws in UAE, non-Emirati and non-GCC citizens can obtain absolute ownership. In addition, they have the right to lease for 99 years and any usufruct in established areas of Dubai. Likewise, this rule will apply to foreign businesses that are subject to the Land Department of the Emirates.

Below we will show you some designated areas in Dubai where you can own property:

• ·      The Palm Jumeirah
• ·      The World Islands
• ·      Downtown Dubai
• ·      Old Town
• ·      Burj Khalifa, Business Bay
• ·      Dubai Marina, Emirates Hills
• ·      Jumeirah Lakes Towers
• ·      Jumeirah Beach Residence (JBR)
• ·      Discovery Gardens
• ·      Ranches
• ·      Midriff (specified plots)
• ·      Dubai Investment Park
• ·      Falcon City
• ·      Dubai Sports City
• ·      Dubai Motor City
• ·      International City
• ·      Jumeirah Islands and Jumeirah Village

Moreover, if you are a foreigner you will be able to obtain a rental in areas outside the areas mentioned above. Likewise, as a foreigner, you can purchase property in the free zones established in the UAE. In contrast, the real estate laws of Dubai and DLD policies will not issue property titles to companies other than the ones registered.

That is, if you register a company on land you cannot expect to be given title to a company on the high seas. Likewise, you must inform the DLD of changes in the shareholding of shareholders of a company until reaching the beneficial owner with a company in Dubai. Similarly, you cannot mortgage properties if you are not a bank authorized in the United Arab Emirates.

Requirement for Registration in Real Estate in UAE

The real estate laws in UAE established requirements and processes required to register that are different for each emirate. Thus, the nature of a property right will have no effect if it is not registered. Equally, the Dubai DLD is the one that registers long-term leases and property rights.

In addition, the owner of some real estate receives certified title to the property. At the same time, all the Real estate contracts purchased off-plan will have to be registered in the DLD. Likewise, RERA is the one who must register short-term rentals in the contract registry or Ejari.

Registration Benefits in Real Estate

The Dubai real estate laws say that the registration of the owner's real estate rights proves his ownership over them. Similarly, the unit package must mention commissions, mortgages, agreements, or other types of obligations related to the property. Also, banks and other institutions will claim interest on the property if necessary.

These third-party rights will be registered in the title of the property and are binding on it. In this case, if the property is transferred to another person, this person will be subject to the obligation established in the contract if it is registered. Likewise, if there is no inception, the interest of the third party will be paid by the original owner.

Conclusion

Real estate laws in UAE are established to make the real estate venture safe for everyone involved. Likewise, you must stay up to date with changes to these laws whether you are an investor or a buyer. Also, if you are a buyer, you can hire a real estate agent who will ease the process of selling or purchasing real estate in Dubai.

Finally, if you need any additional advice, do not hesitate to contact us and we will be supporting you with our professionals.