Introduction
Dubai is one of the best and prosperous cities in world to live and work. The city has tremendously transformed itself to a city that provides best of infrastructure and facilities from a city ignominious for uncertainty and instability a couple decades ago. This transformation has resulted in multiplying growth for the Emirate and property situated herein. In addition to that liberalized policies for acquisition of immovable assets in the region have given a new height to property market in the region. A large number of expats now prefer to buy property rather than renting it. However, it will be prudent to do some due diligence before putting a handsome amount into a property.
Examining the Title
The initial concern for buying a property is definitely examining the righteous title holder of the property. Before buying you must request a copy of the property title deed and site plan from the dealer. It will not involve much of time and cost to find the reality behind seller’s claims about title ship of the property by making an enquiry to Dubai Land Department. It will also help the prospective buyer to find if the property is restricted from sale under a court’s order or already having a mortgage which prevents its sale. But Land department require a valid power of attorney to carry out any such investigation if the owner of property is present in Dubai. Land department can also help in finding the actual value of property in question.
Developers of Property can help you know better
Potential buyers may approach the master developers for enquiring about the property that they wish to purchase to ensure that all the charges levied or community fees included under cost of property are actually have been paid to date. It will also help to check if any penalties have been levied by the developer and successful clearance received by the seller. A Power of attorney from the owner of property will be required for making such enquiries from developer.
Dubai Municipality can help
Investigation from Dubai Municipality can be a great help to ensure that there are no outstanding violations or penalties related with property’s construction and zoning and to verify the permitted use of the property.
Technical Due Diligence
Buyers should also use a third party licensed technical inspection company to verify the area measurements and dimensions of the property as the sellers’ claim and ensures no defect in the property. Once a buyer has done these due diligence with the help of outside parties, he can proceed to draft an agreement which is generally called a memorandum of understanding (MoU) to state the key terms of the property transaction. In Dubai, the parties are mandatorily required to sign and file Form – F to Dubai Land Department and any additional terms and conditions in the MoU should be attached as an addendum to Form F.
The Final Step
The parties would be required to appear before the Dubai Land Department or at the Registration Trustee offices with all the necessary documents recommended by the authority to finalize the transfer. In the case of corporate purchasers, all the key documents e.g. trade license, Certificate of Incorporation, Memorandum and articles of association etc. would be required to get duly notarized and attested and translated into Arabic and must disclose the ultimate beneficiary of the buyer entity. If the purchaser entity has corporate shareholder(s), all the documents of each corporate shareholder should be notarized, attested and translated to Arabic should be presented to Dubai Land Department for assessment of the ultimate beneficiary. The seller will be required surrender its original title deed and the buyer will receive a new title deed mentioning its name upon completion of registration of property. This process usually takes approximately one to two hours provided all the required documentation is complete.
Bottom Line
Due diligence can help and gives some assertion and confidence that the property has a clear title, it is not impossible for the seller to make any alterations to the property after the completion of the due diligence by the prospective buyer and the buyer should verify the findings of the investigation and due diligence on a day closer to the actual transfer date to ensure that the property status remains unchanged and he will actually receive a clean and free property.
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