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Dubai’s real estate market is one of the most dynamic and attractive in the world, attracting investors from all corners of the globe. Despite stringent regulations and efforts by the authorities to ensure transparency, as with any major financial transaction, there are risks in buying, including the possibility of fraud with Dubai property. To protect your investment and ensure a hassle-free process, it is essential to stay informed and follow key tips when buying property in Dubai.
1. Always work with licensed and registered professionals
This is perhaps the most important advice. Dubai has strict licensing requirements for all real estate market participants.
- Real Estate Brokers (REBs): Every broker must have a valid license from the Dubai Land Department(DLD) and be registered with the Real Estate Regulatory Agency (RERA). You can check the legitimacy of a broker through the DLD website or through the Dubai Rest app by entering their RERA number. Avoid “agents” who cannot provide such proof.
- Developers: make sure you work with a reputable and proven developer who has a history of successfully completed projects. Check the status of the project and the developer in DLD.
- Lawyers/Legal Advisors: hire an independent lawyer to represent you. Make sure he is licensed in the UAE and has experience in real estate transactions. Don’t just rely on the seller’s lawyer or the agency.
2. Perform due diligence
Before signing any binding agreement, your lawyer should conduct a thorough legal due diligence of the property and the seller.
- Ownership verification: make sure the seller is the actual owner of the property and has full rights to sell it. This includes checking the Title Deed with DLD.
- Encumbrances on the property: check if there are any mortgages, liens, litigation or other financial encumbrances on the property. All debts must be settled before the transfer of ownership.
- Unpaid Fees: Make sure all service and maintenance fees to the developer or homeowners association (HOA) are paid. Seller must provide a No Objection Certificate (NOC) from the developer.
- Permits and Compliance: Check that the property was built according to all required permits and complies with local building codes. For off-plan properties – verify that the project is registered with DLD and that payments are deposited into a DERA controlled escrow account(RERA escrow account).
3. Be careful with payments and contracts
Financial transactions and the signing of contracts are stages that require extreme care.
- Never pay large sums in cash: always use bank transfers or bank cheques so you have a clear trail of the transaction.
- Deposits: Initial deposits (reservation deposit, pre-contract deposit) are usually held by the broker or attorney in a special, secure account until the transaction closes. Make sure the deposit is held by a licensed and trusted broker.
- Read every document carefully: don’t sign anything you don’t fully understand. If the document is in Arabic, request an official translation. Your lawyer should review every contract, including the Offer to Purchase (Offer), Memorandum of Understanding (MOU) and Sale and Purchase Agreement (SPA).
- Payment terms: clearly understand the payment schedule and the consequences of failing to make any payment.
4. Beware of “too good to be true” offers
If an offer seems too good to be true, it probably isn’t. Be skeptical of:
- Unrealistically low prices: extremely low prices, significantly below market value, may signal fraud or hidden problems with the property.
- Calls for a quick solution: pressure to close the deal “immediately” or pay a deposit without due diligence is a big red flag.
- Lack of documentation: if the broker or seller refuses to provide the required documentation or appears evasive.
5. Personal visits and inspections
- Always visit the property: whether you are buying a completed property or a off-plan (look around the construction site and other completed projects of the same developer). Photos and virtual tours are no substitute for an in-person impression.
- Have a look around the area: walk around the neighbourhood, check out the infrastructure, accessibility to transport, shops, schools and other amenities.
6. Use reliable communication channels
- Always communicate with brokers, developers and attorneys through official channels (email, official phone numbers). Avoid communicating only through unofficial chats or personal phone numbers that are unrelated to the company.
- Keep all written communications.
7. Be aware of the rules for foreigners
As a foreigner, make sure you understand the rules for foreign ownership in Dubai, especially with regard to the so-called “freehold” zones (zones where foreigners can own full ownership) and “leasehold” zones.
Conclusion
Investing in property in Dubai can be extremely lucrative, but to ensure a safe and successful transaction, it is essential to be informed, proceed with caution and rely on licensed professionals. Strictly following these tips when buying property in Dubai will significantly reduce the risk of fraud and ensure that your investment is protected.
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