Legal Requirements for Buying a Secondary Market (Re-sale) Property in Dubai: A Comprehensive Guide

Dubai’s real estate market has long been a global attraction, offering lucrative investment opportunities, especially for expatriates and foreign investors. However, understanding the legal landscape is essential before committing to a property purchase. This guide outlines the legal requirements to buy property in Dubai.

1. Eligibility to Buy Property in Dubai

Foreign nationals, expatriates, and non-residents are permitted to buy property in specific areas known as freehold zones. These zones are designated by the Dubai Government for foreign ownership. Some popular freehold areas include Downtown Dubai, Dubai Marina, Palm Jumeirah, and Jumeirah Lake Towers (JLT).

In leasehold areas, foreigners can lease properties for up to 99 years,  own the property but do not own the land.

2. Understanding Freehold vs Leasehold

• Freehold: The buyer has complete ownership of the property and the land it stands on.

• Leasehold: The buyer owns the property but not the land, and the ownership is limited to a lease period (usually 99 years).

3. Documentation Required

To purchase a property in Dubai, certain documents are necessary:

• A valid passport (non-residents can buy property on a visit visa).

• Emirates ID (for UAE residents).

• Mortgage pre-approval from a registered bank if the property is financed.

• Signed contracts between the buyer and seller.

There is no specific requirement to have UAE residency to buy property, which is attractive for international investors.

4. Hiring a Real Estate Agent

It is advisable to work with a licensed real estate agent in Dubai who is registered with the Real Estate Regulatory Authority (RERA). This ensures that the transaction is legally compliant, and the agent will help navigate complex documentation and legal requirements.

5. Memorandum of Understanding (MOU)

Once the buyer and seller agree on the sale terms, they sign a Memorandum of Understanding (MOU), also known as Form F. This contract outlines the responsibilities of both parties, including the agreed purchase price and other terms.

• The buyer typically gives a 10% deposit upon signing the MOU. This deposit is held by the real estate broker or the seller’s agent to ensure that the transaction will be completed.

6. No Objection Certificate (NOC)

After signing the MOU, the Seller  must obtain a No Objection Certificate (NOC) from the developer of the property. The NOC confirms that there are no outstanding fees or disputes regarding the property. The developer will charge a fee for this service, which varies depending on the project.

7. Transfer of Ownership

The property ownership is officially transferred at any Trustee Office available in different areas across Dubai , where both parties should be present or their appointed POA’s. The buyer is required to pay the DLD transfer fee, which is fixed at 4% of the property price. This fee can sometimes be shared between the buyer and seller.

Additional documents will be required at this stage, including:

• The original MOU (Form F).

• The NOC from the developer.

• The buyer’s and seller’s identification documents.

Once the transfer is complete, the buyer will receive the Title Deed, confirming ownership of the property directly by email within 1 hour from the tramsfer.

8. Financing and Mortgage Requirements

Foreign investors can apply for mortgages from local or international banks operating in the UAE. However, there are specific lending limits:

• Non-residents are typically required to provide a 50% down payment and 50% will be financed by the bank.

• Additional costs such as mortgage registration fees (typically 0.25% of the loan value) and administrative charges also apply.

It’s essential to have a mortgage pre-approval in hand before beginning the purchase process to avoid any delays or complications. The pre-approval is typically valid for 1 month with the possibility to renew or extend.

9. Service Charge

Service charges: Every property owner in Dubai is paying annuail Service Charge Fees - these are annual fees paid to the building management company for maintaining common areas and facilities (such as swimming pool, gym, reception areas, security, cleaners etc). Service charges vary depending on the type of property and location and calculated as fixed rate multiplied by the unit size (sq ft).

10. VAT

A 5% VAT applies to real estate transactions involving commercial properties, but residential properties are exempt.

10. Legal Assistance

It is highly recommended to engage a lawyer with expertise in Dubai real estate law to review contracts and oversee the entire transaction process. While not mandatory, legal assistance ensures that all documents are in order and that the buyer’s rights are protected.

11. Buyer Protection and Dispute Resolution

Dubai has established regulatory bodies, such as RERA, to oversee real estate transactions and protect buyers. In case of disputes, buyers can file complaints with RERA or seek resolution through the Dubai Courts.

Conclusion

Purchasing a re-sale / secondary market property in Dubai is a well-regulated process, offering attractive investment opportunities. Understanding the legal requirements—from eligibility and documentation to transfer fees and buyer protection—is crucial for a smooth and successful transaction. Engaging experienced real estate agents and legal professionals ensures compliance with local laws