A Guide to Buying Property in Dubai
Step 1
Once you have found your property you will most likely be asked to sign a reservation form and or pay a booking deposit. It is important to ask if this deposit is refundable or not.
N.B.
1) At this stage you should instruct a lawyer to act on your behalf.
2) If you require a mortgage you should organize this at this stage too. We are not mortgage advisors however we can refer you to mortgage advisors who are regulated by the financial regulator. Please see the mortgage section in our website for further details.
Step 2
You should receive your reservation contract (or preliminary contract). This must be returned signed within a certain time frame. Time-frame will be outlined in this contract. This should be passed immediately to your lawyer to review.
A) Usually this preliminary contract will require you to pay a first stage payment of the purchase price. The amount of this payment can vary and can be between 10% to 30% of the property purchase price. B) This contract will also outline the stages at which the next payments are due and when you will be required to pay the final amount and sign the final deed of purchase.
When you return your signed preliminary contract to the developer/agent you have entered a legally binding contract to pay for your property in full.
Step 3
Signing of the final purchase deed (or Sales and Purchase agreement) (time frame will be specified in preliminary contract. As there is no notary system in Dubai you do not have to travel to Dubai or appoint a Power of Attorney to sign the final purchase deed. This can be signed by you in Ireland.
When you have signed the final purchase deed, congratulations, you are registered as the new owner of the property in the land registry in Dubai. Shortly after this you should receive your Title Deeds and keys to the property.
Closing Costs
At the time of signing the final deed of purchase you will have standard closing costs to pay in addition to the purchase price of your property. These fees include property transfer tax, land registry fee, and legal fees. These fees are approx 4%.
Land Ownership in Dubai
Since 2006 foreign investors are now permitted to own freehold real-estate (land and property).
What your lawyer should do
Your lawyer will check your contract for compliance with the laws of the country you are purchasing in.
Your lawyer should:
A) Review of preliminary contract to ensure compliance with laws of relevant Dubai jurisdiction.
B) Carry out due diligence on the developer of the property to check planning permissions, land registry, building permits licences etc.
C) Undertaking negotiations with developer on any issues which need to be changed or included.
D) Report on the contract as a whole highlighting any clauses included which you might want to negotiate, and any clauses which are missing which should be included to provide you with further comfort.
E) It is of utmost importance for your lawyer to ensure all land registration deeds and title deeds over the property are fully checked, and also that the land on which the property has been built has been designated as allowable for foreign ownership.