Purchasing a Property in Dubai? All You Need to Know

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In order to purchase a property, a well-drafted Sale and Purchase Agreement is required which is commonly known as SPA in UAE. It is one of the primary requirements for the parties, and the parties can fail to scrutinize this document for a better understanding of their legal status pursuant to the laws of the UAE. Once both the parties, the buyer and seller agree to buy or sell a specific asset, they enter into a Sale and Purchase Agreement. We advise our readers to review the contents of the SPA carefully before signing and to seek legal assistance to protect their rights as per the laws of the UAE.

Every Emirate of UAE has enforced many laws regulating the real-estate transaction within their Emirate. Accordingly, Dubai has also issued laws to offer protection to buyers, post purchasing the property. Even though prevention is always better than cure. Thus, it is advised to all our readers to review the terms of the agreement or at least carefully investigate the following issues before signing the Sale and Purchase Agreement.



It is very important for the buyer to investigate or check properly, who is the real owner of the concerned property. Apart from reviewing the title deed, the buyer must also review the rights awarded to the owner of the property and should verify if there are any restrictions. Because the law comes to the assistance of those who are vigilant with their rights, and not those who sleep on their rights. Thus, reviewing the title deed of the property is compulsory.  



Each real estate project in the Emirate of Dubai is registered with either Land Department or through OQOOD as authorized by Real Estate Regulatory Authority of Dubai (RERA). Through convenient access to the website of either authority, one can ensure if the project is registered or not as the authority has provided a non-exhaustive list of approved projects in Dubai.



Dubai Land Department has provided a list of developers registered with them, through which one can ascertain if the developer is holding a valid license and simultaneously registered with the authority. It is most important for the buyer to make sure that, the developer is registered with the Dubai Land Department.



The Investors or buyers some time neglect to check the parties involved in the Agreement as sometimes there are many parties to the contract, i.e. the owner, developer, manager and the seller only refers to one party in the contract. Thus, it must be reviewed carefully.



The developers usually offer a lengthy schedule for the payments and the terms of the schedule could be extensive. It is very important to check and make sure that, the schedule for payment is linked to the construction milestones, and clearly sets out the amounts and percentages and due dates.



The developers or contractors are obliged to maintain an escrow account for their projects in Dubai. All the investments made by them or the buyer’s instalments should be submitted in the same escrow account. Thus, it is essential for the buyers to seek details from the developer or RERA of the escrow account to ensure the security of investment amount.



Buyers must carefully study the governing law to ensure if the law regulating the contract is the law of the UAE. In addition, he must check the method for resolving disputes which can be either through UAE courts or independent arbitration centers. In case the contract opts for arbitration, buyers must seek legal advice from Arbitration Lawyers in Dubai.



Termination provisions in a SPA are the most debatable clause as evident from the numerous cases filed before the competent courts in Dubai. In a general termination clause, the Developer retains the initial investment amount paid by the purchaser in the event of termination of the agreement or if the buyer fails to abide by his financial obligations. Accordingly, the buyer must carefully examine the termination clause allowing him to rescind the contract, upon default of seller’s obligations such as delay in handing over the property or failing to register the property with the authority and similar.



Every sale purchase agreement has a completion date on which the seller will hand over the unit to the buyer. However, we have witnessed numerous cases, wherein the sellers fail to oblige with the hand over date. On the other hand, buyers being unaware of the completion date lose their right of terminating the property and seeking compensation. Therefore, buyers must determine the completion date of the project and should understand the legal consequences for the seller, if they breach the provision of the contract.



Sometimes, the developers authorize third parties to sign the contract on their behalf which is commonly known as authorized signatories. Thus, the buyers must carefully review power of attorney granting signatory rights to the authorized signatory.

For any queries or services regarding Purchasing Property and Reviewing Property Sale and Purchase Agreements in Dubai and the UAE in general, you can contact us at +971 4 3298711 or send us an e-mail on consultants@uaeahead.com . Also visit our website www.uaeahead.com

Article by ProConsult Advocates & Legal Consultants the Leading Dubai Law Firm providing full legal services & legal representation in UAE courts

Purchasing a Property in Dubai? All You Need to Know was last modified: February 16th, 2020 by Tony Maalouli