In May 2003 H. H. General Sheikh Mohammed Bin Maktoum, Crown Prince of Dubai and U.A.E. Defense Minister, announced that 100% freehold ownership of certain properties in Dubai is available for persons of all nationalities. At present there is no specific law dealing with the issue if “freehold” ownership and Dubai will publish its own law allowing foreigners to register with the Lands Department in Dubai. The new law will address this issue and allow foreigners to register their titles with Lands Department. The new Dubai property law has been effectively signed and delivered. Foreign buyers once hesitant to commit to a marketplace where an element of doubt remained about their legal right to own freehold real estate are fuelling a resurgence of interest in property in Dubai.
First, while Dubai has a reputation for having a transparent and trouble free property purchase process that does not mean it is safe to enter into any form of property transaction without the aid and support of a competent and independent lawyer. There are many complexities and surprising troubles associated with the purchase of property whether that property is off plan, completed or resale…money should not change hands and contracts should not be signed before the purchaser has sought independent legal advice.
With respect to the signing of any contract and the acceptance of any terms, conditions and assignments it’s essential that the purchaser reads, understands and accepts not only the obligations that the builder/developer/reseller/agents are committing to, but all the terms and conditions that the person buying property in Dubai has to agree to ,as well as, insurances in place before completion, accepting that title deeds can be assigned to someone else nominated if permission to purchase is not granted to the initial buyer.
Not all builders and developers in Dubai have the same reputation and not all build to expected quality standards. Enough property has been completed in Dubai by the majority of large constructors for those looking for an investment property in Dubai or a second home in the UAE to have examples of completed work to look at.
The terms and conditions that mortgage lenders put vary from lender to lender and country to country. And this also may be a reason for starting to standardize forms. Many think that by entering into a mortgage contract they only run the risk of losing the home on which the mortgage is based if they didn’t pay what they should.This is not always the case. Often the larger the financial institution the less mistaking and customer caring they are too. Read, understand and seriously think about any financial contract you sign it could be that if you default and your home is repossessed that you still end up with a bill for charges, lost interest, the difference between the debt and what they sell your home for. There is no such thing as a known reputation bank, a good lender or a generous financial institution it is better to know very soon to fulfill your needs better . Dubai mortgage lenders are no exception to this rule so what you should do is to look after yourself and your own best interests, do not trust a bank, estate agent or property developer to do so, but depend on your intelligence and intuition.
For instance did you think what could happen to your home property in Dubai when you die (sorry about the topic but it is an essential one to consider when you bear in mind that the laws of succession differ from country to country and are affected by many issues such as whether you still have finance outstanding on the real estate etc.). You should write for who you want your home to be, but also consider the option of owning property through a company structure or if appropriate to your circumstances, using an offshore trust for the ownership of any property assets purchased outside your basic country.
And finally, there is no investment without a risk and while some believe putting money into property as an asset class is the closest thing you can get to risk free investing, that is most certainly not the case. Dubai is still an immature and emerging market that has not been tried and tested, that has never had to suffer economic, social or political change on a large and significant scale and where no investor, market analyst or expert can predict future growth patterns. While property prices and rental yields are continuing to rise at the moment, they may not rise forever.
