A checklist for property buyers

A checklist for property buyers
LEGAL VIEW by K.K Sarachandra Bose / KHALEEJ TIMES

K.K Sarachandra Bose is a Partner/ Corporate, Commercial and Contract Lawyer at Dar Al Adalah Advocates and Legal Consultants. Readers may e-mail their questions to: ktedit@emirates.net.ae or send them to Khaleej Times, Dubai P.O Box 11243.

Q: I am writing from Shanghai, China. I have purchased two flats in Dubai from a developer by an agreement signed between the agent and me. The construction is still going on. The title deed of the flats has not yet been transferred to my name and my lawyer in Dubai informed me that it is taking time. Now I want to buy more flats in Dubai as an investment. Can you please advise how I should make payments and how safe it is as an investment?

A: In order to protect the payments made by purchasers of real estate properties in Dubai, the Government of Dubai has promulgated three important laws, which are applicable in the emirate — law No. 7/2006 which streamlines land registration; bylaw No. 85/2006 which regulates real estate brokers’ register; and law No. 8/2007 which governs trust accounts of real estate developments.

The land registration law is applicable to real estate properties situated in the emirate of Dubai. Foreigners may, subject to the approval of the ruler, be granted the rights to acquire absolute ownership of land without time restrictions in certain areas, and usufruct or leasehold of properties for a period not exceeding 99 years. Land means any plot of land and all that are located thereon such as buildings, plants etc.

As per the said law, all transactions that create, transfer, change or cancel rights over land shall be recorded in the Land Register and no transaction shall have any effect unless registered in the register.

As per the bylaw on real estate brokerage in Dubai, every person carrying on brokerage activities must be registered at the Electronic or Documentary Register of the Real Estate Brokers at the Land Department.

As per the law on trust accounts of real estate developments in Dubai, every developer selling units of the project is bound to open a trust account in the name of the property developer in a bank or financial institution approved by the Dubai Land Department and deposit the amounts paid by the buyers of the units or the financing parties.

In short, to buy a property in Dubai, the buyer should see whether the following three points have been adhered to:

(i) that the developer has registered in the developers’ registry at the Dubai Land Department — ask for the Developer’s Registration Number;

(ii) that the developer has opened a trust account with one of the approved financial institutions by the Land Department — issue all payments to the project’s trust account number; and

(iii) that the broker has registered in the brokers’ registry at the Dubai Land Department — ask for the broker’s ID card.

For the property that you have already purchased, you will have to follow up with the developer till such time the property is registered in your name at the Dubai Land Department. Your investments will be safe as per the laws if you follow the above guidelines. — Compiled by Ahmed Shaaban