The UAE is composed of 7 autonomous Emirates: Abu Dhabi, Dubai, Sharjah, Ras Al Khaimah, Fujairah, Umm al Qaiwan and Ajman. Some of these Emirates have been labeled as emerging markets in recent years and this international recognition has led to the influx of foreign investors like Brits in the region.
Those who want to take the brave leap of buying in UAE don’t have to worry too much, since the process of buying property for sale in UAE is surprisingly similar to those followed in the UK.
It starts off with finding and choosing the right property.
Most foreign nationals buy off the plan from builders in the UAE, but be careful before jumping into this bandwagon. There have been several incidents where property investors lost their money, because the developer failed to finish their project on time.
Thus, if you’re planning to buy off plan, it’s highly advisable that you consult local authorities about their list of registered developers. And if there is none, you can also conduct an independent inspection on the previous projects of the developer you are dealing with.
While doing your research, it’s also important to get legal advice on property laws being applied in the Emirate where you are planning to buy into. The 7 autonomous Emirates of UAE apply varying property laws; that’s why you need someone who’s familiar with these different laws so you won’t make any mistake when signing a contract.
For example, in some areas in Abu Dhabi, foreign nationals can only acquire land on a “freehold-leasehold” basis. This means a foreign national can only lease the land but has freehold rights on anything above the land.
The next step is placing an offer to the seller or developer. If the offer is accepted, only then will you have to make a payment.
How much money do you have to prepare for this remote property investment?
If you’re buying off-plan properties in the UAE, prepare around 10 per cent of the selling price as deposit. After that you will then make successive payments of 10-20 per cent on specified dates until the project is finished.
You’d also have to prepare for additional costs like agents’ fees which range from 2- 3 percent, as well as transfer fees.
The process I’ve mentioned is similar whether you’re buying property for residential purposes or for buy-to-let, but those who want to become landlords in the UAE have additional responsibilities.
Landlords are required to draft a contract clearly stating his or her obligations over the property such as maintenance, service repairs, rental collections, etc.
If your buy-to-let is in Dubai, you’ll also have to register your lease contract through Ejari. Landlords in Abu Dhabi, on the other hand, will have to register their contract with the Tawtheeq. These contracts will be kept in the records of these departments until its expiration, so that it cannot be altered.
I hope these tips help you conduct smooth property transactions in Dubai and other Emirates in the UAE.