§ A person doesn’t need a lawyer when buying a property in Dubai. Many persons (both individual and corporate) enter into property sales agreements without considering legal matters. Large sums of money sometimes pass from a buyer to the seller’s agent even before the sale process takes place. Buyer puts himself and his money in hazardous situation because he failed to refer to law and legislations.
§ Sometimes they think that there is no need to consider the detailed terms and conditions of any contract or sales agreement because they think that they cannot negotiate these terms. Sales agreements vary from developer to developer, so one must fully consider contract’s terms before entering into an agreement and not necessarily for negotiation purposes. Also, several agreements impose shocking obligations on a buyer such as paying certain charges which would be very bad to ignore.
§ Why is there always something wrong even though the procedure of signing is so easy? When the parties to an assignment cannot personally attend or are not individuals, but are corporate bodies, problems occur. Even when the parties attend personally, one must ensure that they prove who they claim to be. It is prudent that one must be reasonably certain that proper and appropriate authority has been given and can be properly demonstrated. This is not very important for the buyer to do so, but it is most certainly required from the seller or the one representing him. It is advisable that any concerns are dealt with a few days before the assignment meeting to allow sufficient time to resolve any troubles and problems that may arise in a very safe manner. Where an assignor is an individual who does not personally attend, or is a corporate body, the developer will most likely (but not always) insist that there is a duly executed and notarized power of attorney, conferring appropriate authority on the assignor’s representative. When offshore companies are buying, certain documents including the certificate of incorporation, memo random and articles of association, list of directors…should normally be presented to the developer, together with an original letter of authority from the directors of the company to the authorized person enabling that person to execute the assignment on the assignee’s behalf. One should also ensure that there are no misunderstandings as to who is to be responsible for payment of the assignor’s agent’s brokerage fee, which is usually two per cent of the selling price, together with any assignment fee levied by the developer.
§ If the owner of a property dies, who will take the property? Several factors influence this area such as: there is a will or if the owner is a non-Muslim. So, one must have an offshore company as an owning one because the company has no dangerous to die, but shares can be distributed in accordance with the usual rules.
§ If I buy property with a mortgage and I default in repayments, the limit of my liability is that the bank simply repossesses the property. You will always be responsible for the balance of the unpaid principal amount, plus any penalties that you may incur by default. Even if the bank repossesses and manages to sell the property, there is no guarantee that the sale proceeds would be sufficient to repay the unpaid principal amount, plus interest, plus penalties, plus costs
§ There will be only an increase in the value of my property and the rental yield. Many believe that rental yields will be upwards of ten per cent, and the prospects for capital growth are excellent. This belief is overly optimistic and relies more on a certain green-eyed monster than actual analysis of what is still an immature and unpredictable market.
It is better to spend money on a TRIP, a holiday or expensive clothes than waste time, money and effort owning property by way of an offshore company. Dubai has recently introduced regulations that allow offshore companies to be set up in two distinct free zones. These free zones have broadly similar regulations, which permit offshore companies to own property in designated or approved developments. Set-up costs and annual renewal costs are relatively low although there are several restrictions on what these companies can do in Dubai. The regulations require a registered agent to be in Dubai and several firms of lawyers and accountants are registered to act as such.
