Navigating the Dubai Real Estate Market: How Real Estate Lawyers Can Help Investors
Real Estate & Construction and Hotels & Leisure
Mohammed KawasmiPartner,Real Estate
Mehak GoelParalegal,Real Estate
The Dubai real estate market boasts a diverse range of property types and projects that caters to a variety of investors. This diversity means the market is not overly reliant on any one investor demographic, and this assists in cushioning the sector against economic fluctuations and speculation. In addition, the Government continues to ensure that the market is closely regulated by the Dubai Land Department (DLD), thereby ensuring investor confidence and market stability is maintained.
While the market and demand for Dubai real estate continues to grow, the Emirate has specific regulations and processes that govern real estate transactions that are vital to understand and adhere to. The presence of regulations and transparency ensures that the transactions are secure, which is particularly advantageous for international investors and end users, who may not be acquainted with the process of property acquisition.
1. Property Due DiligenceExamples of what investors should be aware of when purchasing property in Dubai, includes - investors must ensure that the seller or developer of the property owns a valid title before entering into any sale and purchase agreement. The record of all properties is maintained at the DLD; however, the property register at the DLD is not a public register. Therefore, only the owner or the power of attorney holder, or real estate lawyers licensed by DLD, can obtain information regarding encumbrances and restrictions attached to the relevant property. Moreover, while investing in real estate in the Emirate, it is crucial to consider the cost of ownership that includes service charges, maintenance fees and the transfer fee of the DLD. These additional charges can often be onerous if proper due diligence is not conducted beforehand.
2. Jointly Owned PropertiesIn the case of jointly owned properties, investors must consider the management of the property, as poor management can be troublesome for the investor later. Jointly owned properties also have several documents such as the building management statement, the master community declaration etc. that the developer would require the investor to comply with. It is essential for the investor to familiarise themselves with these documents and be aware of their rights and obligations.
Any property transaction can seem to be a daunting process, this has led to an increasing number of investors seeking the services of professional law firms to provide guidance and oversight on their purchase. Growing demand for services offered by law firms to facilitate the process of buying and selling real estate in Dubai has become popular, as they ensure that the investor is receiving accurate advice from the start of the transaction to completion. In fact, we are first law firm in the UAE and the region to provide a dedicated conveyancing and escrow service to real estate investors.
Typically, a client can expect the below from real estate firms:
Real Estate Due Diligence that involves verifying the validity of the seller's ownership of the property, assuring that the property is free from any encumbrances and restrictions, and confirming that it is suitable for the buyer's intended use.
Drafting the property sale and purchase agreement tailored to the specific transaction, ensuring that the interests of the parties is secured.
For corporate entities, certified law firms can produce a corporate structure certificate for the DLD detailing the shareholding and changes in shareholding. This is particularly beneficial for corporate entities looking to acquire or dispose of real estate in Dubai, as it eliminates the need for foreign documents to be attested and legalised, thereby drastically reducing costs.
Drafting and notarising a power of attorney online on behalf of the client.
Providing escrow services to clients, as the payment of a deposit or the timing of the payment of the purchase price can be an obstacle for many transactions. Therefore, the escrow service helps foreign investors complete the property transaction seamlessly especially for new investors who do not have a UAE bank account.
Concluding the transaction with the real estate trustee office and assisting with the issuance of the title deed in the name of the buyer.
For investors it is important to understand the local real estate landscape and to familiarise themselves with the various regulations and processes. However, the growing trend of appointing the right firm to support the process, provide peace of mind, and ensure the necessary expertise are on hand to seamlessly complete the purchase or sale, is certainly making the life of an investor easier and their purchase journey more seamless.
For further information, please contact Mohammed Kawasmi.
Published in June 2023
