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.
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 emirates, 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.
There are designated areas in the emirates where foreign nationals can and cannot buy property as freehold and leasehold.
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Renting a property is common place in the emirates. 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.
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.
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.
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.
Source: British Embassy
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