The relaxation of the law allowing expats to purchase property and resulting boom in property demand and prices in the mid ‘noughties’ was shortly followed by the infamous 2008 collapse of the market. The subsequent cautious recovery highlights the complexity of UAE property law and the requirement to exercise buyer caution more widely appreciated.
According to UAE law, you may buy a property from a developer ‘off-plan’ by paying a 10% to 15% down payment with the balance payable over a period determined either by milestones in development or even, in some cases after the completion and handover of the project. It is imperative you ensure that the developer you are committing to is registered with the Dubai Land Department and that any payments are made to an escrow bank account.
Understanding the documentation involved and what rights and protection it offers all parties varies depending on the quality of that documentation. Make sure you fully understand the commitment and expectations before signing these documents.
If you choose to employ the assistance of a broker in making a purchase (or indeed if one is forced upon you by the developer), you will need to clarify that they are registered with RERA. You can do this by asking to see their ID card or simply visit the Land Department for verification.
Another important document in a property transaction is the Sale and Purchase Agreement which will form the ‘contract’ of your commitment to purchase as well as the parameters and commitment for the developer to build and deliver the project.
Ensure that the agreement clearly outlines and determines the date for completion of the project, actual milestones to be reached to trigger any payments and the penalties and exit clauses if these are not met. You will also need to understand which court is authorized to hear any dispute should future problems arise.
As purchasing a property is one of life’s ‘major’ purchases, please engage the assistance of professional legal counsel to protect your investment.