What are the steps to transfer property in Dubai? A Step-by-Step Guide for Real Estate Investors

Transferring property ownership in Dubai can be a streamlined process when you know the steps, who are the stakeholders involved and what to expect. With its rapid growth as a global investment hub, Dubai presents a unique opportunity for both local and international investors.

Whether buying your first investment property or expanding an existing portfolio, understanding the transfer process is key. Here’s a deeper look into each step necessary for a successful property transfer in Dubai.

Understand the Ownership options

The basis of property ownership starts with understanding of what nationalities and in which areas can own real estate, then what is the difference between ownership arrangements and most important in which areas you should look to invest.

Understand the Legal Framework

The Dubai Land Department (DLD) provides services to market participants like property registration and related transactions whilst developing the necessary legislation for the real estate sector in Dubai.

Real Estate Regulatory Agency (RERA) as part of DLD, sets the regulations for the real estate sector, including rental disputes, licensing developers, brokers, real estate management companies and other real estate professionals.

Before starting the transfer process, it’s important to understand the legal requirements involved in purchasing property in Dubai.

Investors should do a Title Check to verify that the property is free from any legal encumbrances or disputes. This means carefully reviewing its ownership history. For instance, it would be wise to check if there are any outstanding debts, pending litigations, or operational issues related to the property.

Gather necessary documents

Once familiar with the legal part, it is time to compile the documents needed for the transfer which includes:

• Title deed of the property

• Identification document of the seller: a valid passport or Emirates ID

• No Objection Certificate (NOC): needed from the developer if applicable

• Mortgage documents: if the property has an existing mortgage

• Property valuation

• RERA Contract B for Buyer Agent agreement in case of collaborating with a broker

• RERA Contract A from the Seller's Agent agreement in case of collaborating with a broker

  
  

Conducting a final Inspection

This step helps to assess the property's condition and identify any issues with the seller.

Document any repairs or necessary renovations during this inspection to ensure clarity in future agreement.

Draft and Sign the Sale and Purchase Agreement (SPA)

The sale agreement (unified Contract F) is a crucial document in the property transfer process. This legally binding contract details the terms and conditions agreed upon by both buyer and seller.

Take time to review this agreement and seek for professional conveyancing services if required. This should include:

• Property details: address, type, and size of the property

• Sale price: the total agreed-upon price in accordance with the valuation

• Payment details: clear payment milestones and methods such as security deposit or escrow account

• Responsibilities and obligations of both parties

The form, in its standard format, has been drafted in a neutral manner, so that the details required to be completed do not favor either party to the transaction. While the standard form contracts are insufficient in themselves to provide for all key commercial terms, this will be supplemented by an addendum that mentions further details to provide protection to the buyer or seller if an issue with the transaction may arise.

Neglecting to carefully read this document could lead to misunderstandings down the road.

Real estate transactions must be registered within 60 days from the date of signature of the sale and purchase contract.

Apply for the No Objection Certificate (NOC)

When buying property within a community or development off-plan, acquiring a No Objection Certificate usually done via Dubai REST App, is essential. The NOC ensure that the seller has paid all the service charges or financial obligations relating to the property.

This requirement helps avoid complications later in the transaction. The developer may charge an administrative fee of AED 500 for the NOC. Typically, it is the seller's responsibility to obtain the NOC, so ensure that they are informed of this step.

Property valuation

Prior to completing the transfer, the property must be appraised by a DLD-approved Valuation company. This step is essential for determining property's fair market value and calculating the DLD fees based on the purchase price.

Appoint an escrow agent or open a UAE bank account

Escrow services involve a neutral third-party (usually a law firm) holding funds or assets on behalf of the other parties during a transaction. A bank account in UAE ensures fund flows between the parties for completing the transaction.

Record the Property Transfer

With all necessary documents, you can proceed to an approved Dubai Land Department - Real Estate Services Trustee Center, to submit the sale registration application. Both the buyer and seller must be present for identity verification and to sign relevant forms.

Foreign investors who are unable to be physically present throughout the property transfer process might designate a legal representative via a Power of Attorney (POA). This legal document gives someone the right to act on their behalf, allowing for a smooth transfer process.

(AI generated image) Dubai Marina skyline showcasing abstract architecture

Payment of Fees

At this stage, a registration fee needs to be paid, of 4% of the property’s value. The seller pays 2% of the sale value and the purchaser, the other 2% of the sale value.

Other fees are 250 AED fee for a real estate unit or villa; 10 AED knowledge fee; for a property valued at more than or equal to 500,000 AED, a fee of 4,000 AED + VAT for the service partner's fee, while for a property valued at less than 500,000 AED, a fee of 2,000 AED + VAT for the service partner's fee.

After processing, DLD will issue a new title deed under the buyer's name, which can be verified in Dubai REST App.

Beyond the registration fee, be aware of other costs related to property transfer. These may include:

• Brokerage agency fees: in case of engagement with a real estate agent

• Mortgage registration fee: for financed purchase

• Valuation fee: depending on financing arrangements

• Company registration fees if the ownership is under a company not individual. Foreign companies cannot own real estate directly, but such companies may own real estate in Dubai by establishing subsidiary companies in approved free zones in Dubai

  
  

Budgeting for these expenses in advance helps avoid unexpected financial surprises.

Finalize utility connection or transfers

Once the property is registered in buyer's name, it’s important to ensure that all utility services are set up. This includes water, electricity, gas, telephone and internet. Reach out to the respective service providers to either transfer existing services or to establish new accounts.

Stay informed on Market Trends

As a property investor in Dubai, being aware of market trends helps you manage your assets effectively and strategize for future investment opportunities. Regularly review property values, new project developments and updates to legal regulations.

Conclusion

Understanding the legal framework, preparing documentation, and engaging professionals can secure a successful transaction.

As you embark on this journey, approach each step with diligence for a rewarding investment experience.

Disclaimer: The information presented in this article is for general information purposes only and does not constitute legal advice nor should it be used as a basis for any specific action or decision. For further information please do your own diligence and contact a competent authority.