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Legalization process


Dubai has the most developed and clear legislative framework in the sphere of real estate. According to  Article 4 (Chapter 2), the Law #7, concerning la registration of real estate in the Amirate Dubai signed by the Emir Sheikh Mohammed bin Rashid Al Maktoum on March, 2006. The citizens of foreign states that are not members of the Gulf Cooperation Council are allowed to purchase freehold properties in designated freehold areas in Dubai. The list of such areas was determined by Decree #3 of 2006. They include such popular places as:  Dubai Marina, Jumeirah Beach Residence, The Palm Jumeirah, Emirates living, Jumeirah Lakes Towers, Downtown Dubai etc.
The procedure of real estate purchase in Dubai.

1.The buyer chooses property that he/she wants to purchase.

Our consultants will provide you full characteristics of the chosen property considering its location, infrastructure of the area, the quality of the project, the reputation of the developer that built the project, the reputation of the company, monthly service fee, the category of the project or the other things, ROI opportunities. Our specialists will help you to correctly estimate the investment prospects of any real estate and make the best chose meeting all your requirements and desires. In accordance with Dubai Land Department Act #85 of 2006, all real estate agencies operating in Dubai are obliged to have a permit for the corresponding activity type and must be registered in the special register of Real Estate Regulatory Authority (REPA). All agents of the company must complete special training and obtain personal broker cards with identification number.

2.The seller and the buyer sign sale and purchase agreement which reflects all the conditions and     parameters of transaction. 

The agreement of purchase and sale is signed in English and is made in writing. Notarization of such agreements is not required in the UAE. Although the official language in the UAE is Arabic. Agreements in English are recognized everywhere and accepted without translation. Public prosecution, police and judicial authorities are exceptions; translation into Arabic is a mandatory requirement with them. The agreement of purchase and sale has to include the following:
- object of purchase and sale, 
- description of the purchased property (the name of the project, its address, type of layout), 
- purchase price, 
- extra payments related to transaction (agents’ fee, payment to the developer,  registration fee paid to the Land Department, compensation of service costs prepaid by the seller etc.). 
- deadline for closing the purchase and sale transaction, 
- terms and procedure of payment, 
- obligations of the parties in case of failing to fulfill the terms of the agreement.
This  agreement is valid until the moment of re-registration of the title in the name of the new owner.

3.Upon signature of agreement of purchase and sale by both parties, the buyer pays a deposit (10 % of the original cost of property).

The deposit will be returned to the buyer after closing of transaction in Dubai Land Department. For the buyer it is a guarantee of deposit return if the sellers defaults. If the buyer defaults, the deposit is forfeit to the seller. Therefore, a real estate agency with a registered office in Dubai is solid indemnity of transaction.

4.The seller makes up a No Objection Certificate (NOC) with the developer, that is necessary for transaction registration in Dubai Land Department.

No Objection Certificate certifies that the seller has no arrears to the developer. Formalization of NOC can take from 1 day up to 2-3 weeks depending on the company-developer.

5. On receiving all the necessary documents the seller and the buyer close the registration of the property in the name of the new owner in the Land Department.

According to Article 6 of Law #7 dated March 14, 2006, concerning the registration of real estate in the emirate of Dubai, signed by the Emir Sheikh Mohammed Al Maktoum, Dubai Land Department is the only authority with the power to register property titles in Dubai. The Land Department has an official Register for recording property titles and amendments to them. Entries in the Register are an indisputable evidence of the performed act. The records are not questioned except for potential cases of document forgery (Article 7, Law #7 dated March 14, 2006). Any transactions and deals with real estate resulting in granting, alteration, transfer or deprivation of property title must be entered in the Register (Article 9, Law #7 dated March 14, 2006). Dubai Land Department also keeps an electronic record of real estate. Copies of documents from the Register entered electronically have the same value as the originals (Article 8, Law #7 dated March 14, 2006). The transfer of title to the property is registered at the moment of the buyer and seller’s application to the Land Department. The Department issues a Title Deed which serves as the main document confirming the ownership (Article 15, Law #7 dated March 14, 2006). Such procedure for registration significantly simplifies the purchase and sale process and minimizes all possible risks for both the parties. The cost of registering the title transfer in the Land Department makes up 2% of the selling price plus a small fixed charge for the certificate issue. 

To register the transaction in the Land Department you should submit the following documents: 
- original passports of the seller and the buyer (for natural persons), 
- original certificate of property registration in the name of the seller, 
- original NOC from the developer, 
- a copy of the agreement of purchase and sale.
During the registration of the transfer of title to property the buyer makes his/her final payment to the seller. In most cases the payment is made by the buyer by passing pre-prepared Manager’s Cheques (bank bills analogues) to the seller for the required sum. Payment in cash is possible but less common due to inconveniences they imply. Payment can be made using escrow accounts involving an objective third party – an escrow holder. Immediately before issuing the registration certificate to the buyer the registrar asks the buyer and the seller to make mutual settlements and sign a document about absence of claims from the seller for any property payments. To close the transaction with no problems, the buyer should prepare all the payment documents beforehand and agree on the stated particulars, names and amounts with the seller. Real estate agency guarantees legal purity and transparency of transaction and coordinates the process of closing transaction and payment.

Written by Strategic Technology Solutions