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Tue 7 Feb 2012 07:53 AM

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How to buy freehold property in Dubai

Kabir Mulchandani examines the process for property buyers in the UAE.

How to buy freehold property in Dubai
Dubai Marina at night
How to buy freehold property in Dubai
(Bloomberg Images)
How to buy freehold property in Dubai

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.

Arabian Business digital magazine: read the latest edition online

rick advano 8 years ago

I wonder what about places like the Green Community at Dubai Investment Park? We "owners" of the leases seem to be in perpetual limbo over our rights.

Red Snappa 8 years ago

Rick is correct, the closer a long leaseholder gets to the date of renewal without the precedent of an honoured successfully renewed lease, the lower the value.

Green Community and Dubai investment park do not come under the Dubai property law and therefore RERA's jurisdiction which relate to freehold properties only. I suspect they never will at this stage and the rights you do have are detailed on www.greencommunity.ae. It is my assumption here but the UAE's original federal property laws (certainly the Dubai edition) allowed expatriates to take a property on a long leasehold for a lump sum, assuming a UAE national was the unencumbered owner and agreed to the transaction.

However, do we really think that properties leasehold or otherwise will still be perpendicular and habitable after 90 years wear and tear?

Louie Tedesco 8 years ago

This is a fascinating article. Although property has been available to purchase from 2001 onwards, by 2012 the legal framework of ownership has still not been put in place.

No wonder the author ends with the comment - Good luck with your decision.

paul brown 7 years ago

how can you find if a person owns property in dubia is ther a land registry you can check by name

Danish 7 years ago

Hy there,

there is no such agency which gives you the direct number for property sellers in Dubai...however there are agents assigned for each area who actually help you to get the property you looking for with the best deal..

Umar Saeed 6 years ago

There are some good real estate companies in Dubai providing complete guidance for buying property. Dubai is a wonderful place to live and work and if you have money do consider Dubai for buying property. Thanks

Rizwan A 4 years ago

I want to purchase property for personal leaving in UAE, and I do not have either resident or work visa of UAE. But I'm leaving about 8 years in Saudi Arabia. I can eligible to purchase any property in UAE or not. If so someone can help