Specific Steps to Buying a Property in United Arab Emirates - Dubai
Since the 1940s, most foreign nationals who had an inclination to purchase real
estate abroad have shied away from buying such property in any of the countries
in the Arab world. There are two primary reasons why so many foreign nationals historically
have avoided buying real estate in Arab countries, including in Dubai.
First of all, as news reports have recounted over the course of the past sixty years,
the Arab world is far from being the most stable region in the country. Wars and
violence have been common occurrences within that corner of the world.
The second reason why so many foreign nationals have avoided buying and owning real
estate in the Arab world rests in the fact that the laws governing the ownership
of real estate in many of these countries has been complicated and structured in
such a way that it overtly discouraged foreign investment in real estate. Indeed,
many countries that make up the Arab world have prohibited foreign ownership of
real estate during much of the past fifty to sixty years -- including to the present
With all of that said, Dubai has been on the vanguard of creating foreign-friendly
real estate laws that encourage the investment in real estate by foreign nationals.
First and foremost, the laws in Dubai have been reformed to make it abundantly clear
that a foreign national can purchase and own outright real estate within that country.
A foreign national can obtain a freehold interest (as has been discussed previously)
in real estate in Dubai.
In Dubai, the first step in buying real estate is an oral offer to a seller. In
Dubai, a foreign national needs no special permission to make the purchase of real
estate in that country. In addition, unlike some countries (including some in the
Middle East region of the world), a foreign national can own real estate directly
and does not have to bounce through an extra set of hoops towards the goal of buying
and holding real property.
Following the acceptance of the oral offer, an initial real estate sales contract
is drafted and executed between the parties. A deposit -- in an amount negotiated
by the parties -- is placed at this time by the buyer to the seller. Generally speaking,
the deposit is not refundable unless the seller of the property is unable to convey
ultimately the real estate to the buyer. In other words, barring some snafu by the
seller, a buyer will lose his or her deposit if he or she backs out of the contract.
In Dubai, a mortgage lender from nearly any country in the world can provide financing
for the purchase of real estate in that country. What one needs to bear in mind
when buying property
in the United Arab Emirates is that many times a lender will require collateral
beyond the property located in Dubai, beyond the real estate being purchased. In
most real estate transactions the world over, the only collateral the lender requires
for a mortgage loan is the real estate itself that is buying purchased. However,
when a foreign national is making the purchase of
real estate in Dubai, a mortgage lender in most instances will require collateral
beyond the actual real estate situated in Dubai that is being purchased.
The primary reasons for the requirement for additional collateral when obtaining
a loan to purchase real estate in Dubai include the general instability in the region.
There is a concern on the part of some mortgage lenders that something might cause
a disruption in Dubai that might effect the real estate collateral in that country.
Thus, the typical lender will want additional collateral for any loan. Additionally,
while the real estate related laws in Dubai are very liberal, there is always some
concern that a new regime might take control of the country causing a disfavor able
alteration in the real estate laws in that country. Again, for that reason, lenders
desire additional protective collateral in regard to the purchase of real estate
With this in mind, when purchasing real estate in Dubai, it is imperative that a
potential purchaser makes certain that he or she has access to other property that
can be used as additional collateral for the purchase or real estate in that nation.
Once the various requirements of the initial contract are satisfied -- the buyer
obtaining financing, the seller making certain that the property is free of any
encumbrances that might prevent a conveyance to the buyer -- a final contract is
executed, the remaining money due to the seller is paid and a deed for the property
is given to the buyer who will become the new owner of the real estate at that juncture.
Property Abroad always recommends using a
Solicitor or Lawyer