How to buy freehold property in Dubai

Kabir Mulchandani examines the process for property buyers in the UAE.
Dubai Marina at night
By Staff writer
Tue 07 Feb 2012 07:53 AM

A lot needs to be researched when buying property, especially when it comes to your entitlements. Before deciding to invest in a property, it is important to understand the difference between freehold and leasehold property and the rights and responsibilities owning a freehold property gives you, before you take the step to buy it.

Owning freehold is usually much better than leasing for one main reason: control. As the owner, you can generally do what you want with your home provided you keep within the rules and the law.

In 2001, the Dubai government agreed to allow expats to have a 99-year lease of particular Dubai property, but in May 2002, His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President & Prime Minister of the UAE and Ruler of Dubai issued a decree allowing foreigners to buy property on freehold ownership. The decree sparked the real estate boom in Dubai’s residential property.

The Dubai system offers freehold to owners of all nationalities, but in the case of high-rise and multiple occupancy buildings exactly what that means in terms of legal title has yet to be completely defined.

Freehold areas in Dubai include plots in Jebel Ali, the Palm Island projects, The World islands, Dubai Marina, Emirates Hills and Al Barsha, among others.

Registration of your property with the Land Department is important to claim full ownership.  Once a property is completed and handed over to the purchaser, the developer must register the title to the property in the name of the purchaser in the Real Property Register at the Land Department.

Land will be registered in the name of a foreigner only after the developers submit a no-objection letter, stating that all the payments for the transaction have been made.

The Dubai Freehold law specifies the functions and responsibilities of the Department of Land and Property, which has so far been doing all the work without much legal clarity. As per the law, the department will determine the survey areas; approve the land map and the fees for the services provided by the department.

There is no way for a foreigner to own property in non-designated areas. If a foreigner wishes to own property in the non-designated areas, a long lease agreement is the best bet.

Long leases differ from freehold property. Long leases in areas other than those designated cannot be registered at the Land Department by foreigners under the new Law. However despite this, these leases remain as personal rights and are legal. Unregistered long leases in areas outside of the designated ones remain enforceable as personal contractual rights between the parties. In regards to any dispute that might arise from an unregistered long lease, judgment will be passed by the Rent Committee.

As far as residency is concerned, in principle, a person could own a property in the UAE and choose not to reside in the property, so you do not need to be a resident to buy freehold property as it could be your holiday home. Developers offer visas with property purchase where buyers are entitled to a six-month multiple entry visa. According to Gulf News, a recent cabinet decision entitles foreign property owners to a three-year residence visa if they buy a property worth Dh1 million or more, however this is not yet a law. Ownership of property and residency or sponsorship are interrelated but should be looked at separately.

Good luck with your decision.

*Kabir Mulchandani is the founder of SKAI Holdings.

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