Buying an apartment in Dubai: laws, legal steps & more

The law for buying property in Dubai

There is a specific set of laws for people looking to buy an apartment in Dubai or other properties in the Emirates. These laws differ from one Emirate to another. 

One of the most important property laws in Dubai for expats is Article (4) of Law No. 7 of 2006. 

Article (4) of Law No. 7 of 2006

This article is the primary reference and regulation for property ownership in Dubai. It outlines that the UAE (United Arab Emirates) and GCC (Gulf Cooperation Council) residents can own property anywhere in Dubai. 

Foreigners, on the other hand, are allowed to buy properties in designated freehold or leasehold areas. 

Types of property ownership in Dubai 

Before buying a dream home or apartment in Dubai, it is important to understand the two types of property ownership: freehold and leasehold. Knowing the difference between both can help people make an informed decision. 

Dubai was the first Emirate within the UAE to allow property ownership for expats in designated areas/zones. While the right to hold property on a leasehold basis was granted in 2001, the right to own property on a freehold basis was passed shortly in 2002. 

Freehold ownership 

Freehold ownership awards the buyer complete ownership of not only their property but also the property land - without time restrictions.

The Dubai Land Department (DLD) will register the freehold buyer’s name as the “landowner” in the government registry while granting them a title deed for their property. This deed and any contract with it are applicable in perpetuity; which means that if the owner passes away, the property will be inherited by their heir. 

Both expats and foreign nationals are allowed to buy ready or off-plan property in Dubai’s designated zones on a freehold basis. However, they must adhere to government mandates and only buy properties from government-approved developers or real estate agents. 

Some important points about freehold properties are:

• The owner is free to sell, lease, or occupy the property at their discretion. 

• The owner can remodel/renovate their property as they see fit; under the guidelines set by the developer.

• The property owner and their family will be eligible for renewable UAE residence visas - as long as they fulfill certain conditions. These visas can be as long as five or ten years. 

• The owner will be responsible for their property’s maintenance, upkeep, and any major repairs.

Freehold areas in Dubai

There are various freehold areas in Dubai of different categories: apartments, apartments and villas, and solely villas. Here is a list of Dubai’s freehold areas as of 2024:

Apartments 

• Arjan

• Barsha Heights 

• Bluewaters Island 

• Business Bay

• Culture Village 

• Discovery Gardens 

• Dubailand

• Dubai Science Park 

• Emaar Beachfront

• Remraam

• The Greens 

• The Views

• Downtown Dubai 

• Dubai Creek Harbour 

• Dubai International Financial Centre 

• Dubai Investment Park

• Dubai Marina 

• Dubai Production City 

• Jumeirah Heights 

• Liwan 

• Jumeirah Lake Towers 

• Madinat Jumeirah Living 

• Mirdif Hills 

• Mirdiff Tulip 

• Old Town 

• Park Gate 

Apartments and Villas 

• Al Barai 

• Al Furjan 

• Al Khail Heights 

• Al Warsan 

• DAMAC Hills 

• DAMAC Hills 2 

• Dubai Islands 

• Dubai Festival City 

• Dubai Hills Estate 

• Dubai South 

• Dubai Silicon Oasis 

• Dubai Sport City 

• Dubai Waterfront 

• Dubailand 

• Jumeirah 

• Jumeirah Golf Estates

• Jumeirah Village Circle 

• Meydan City 

• Mohammad Bin Rashid City 

• Motor City 

• Palm Jumeirah 

• Sobha Hartland 

• Sobha Heartland II

• The World Islands 

• Tilal Al Ghaf 

• Town Square 

• Wadi Al Safa 2 

• Expo City 

Villas 

• Arabian Ranches 

• Arabian Ranches 2 

• Arabian Ranches 3

• Emirates Hills 

• Jumeirah Islands 

• Jumeirah Park 

• Palm Jebel Ali 

• The Lakes 

• The Meadows 

• The Springs 

• The Sustainable City 

• The Valley 

• The Villa

Leasehold ownership 

Leasehold property ownership gives the buyer the right to occupy a property for a fixed period. While the lease term is generally 99 years long, it can be shorter in certain instances. Leasehold ownership solely allows the buyer rights to the property, not the land it is built on. 

Upon the lease’s expiration, the property ownership is transferred back to the freehold owner. 

Some important points about leasehold properties are:

• The leaseholder can renew the contract at the end of the term and continue occupying the property.

• The leaseholder will have limited liability for repairs as the freeholder owner will likely be responsible for repairs. 

• Leasehold properties are generally more affordable than freehold properties. 

• Any changes to the property structure (e.g. renovation/remodeling) will require the freeholder owner’s approval. 

• Leaseholders may face certain restrictions such as subletting the property or owning pets. 

Legal steps to buying a property in Dubai 

Here are several pivotal legal steps every potential buyer should remember to ensure a smooth and hassle-free process to buy an apartment in Dubai. 

1. Formulating a contract between the buyer and the seller

The contract is the first and one of the most important documents required for both parties (the seller and the buyer). Once you have chosen an apartment and contract negotiations are in the pipeline, it is important to discuss key terms like whether you will be buying using cash or a mortgage.

While this step does not legally require the presence of a real estate agent or conveyancer, it is highly recommended to clarify pricing, payment methods, and important terms and conditions to avoid potential issues in the future. 

2. Signing the agreement of sale

Once the terms of the contract have been mutually agreed upon by both parties, the next step is signing the Real Estate Sale Agreement. This form can be accessed (Form F/MOU) from the DLD's official website and can be customized to include the agreed-upon terms. 

Signing the contract must be done in the presence of the seller, a witness, and preferably at the Registration Trustee’s office. The buyer will have to pay a 10% security deposit to the Registration Trustee - which is refundable upon the transaction completion. 

3. Applying for a No Objection Certification (NOC)

The buyer will need to obtain an NOC from the developer before buying an apartment/villa in Dubai. Once the ownership transfer has been finalized with the seller and developer, the buyer should ensure that they have no outstanding bills. Upon verification of the same, the developer will issue an NOC. 

4. Validating the ownership transfer with DLD 

The transfer of ownership will be completed at a Registrar’s Office of the Dubai Land Department. The buyer must be present or can send an authorized representative and have all the required documents.

At the office, they will have to submit the documents, the NOC, a signed Form F contract and make the payment for the property,usually in the form of a Manager's Cheque. Once the data and payment have been verified, the transfer will be processed and a new title deed will be issued in the buyer’s name; as the new owner. 

A step-by-step guide towards buying real estate in Dubai 

While signing the contract and receiving the title deed is a landmark moment for anyone looking to buy an apartment in Dubai, they must consider several factors at hand before proceeding with the property purchase. 

1. Figuring out costs 

Understanding personal finances and the costs one can afford to bear is the first step toward buying an apartment. Buyers in Dubai must remember there will be a real estate agency fee of 2% of the purchase price, and there will be a transfer fee to the Dubai Land Department of 4%.

If a buyer plans to finance the purchase using a mortgage, they will require a deposit equivalent to at least 20%-25% of the purchase price, depending on their circumstances, as a down payment.

Setting a budget and ensuring a full understanding of the costs involved in buying an apartment will ensure fewer financial hurdles in the future. This planning can be done with the help of an experienced real estate agent. 

2. Pre-approval as a finance buyer 

If a buyer is applying for a loan, they will have to submit an application to a bank for pre-approval. Being pre-approved as a buyer not only confirms your realistic budget but also puts you in a stronger buying position. Once the loan amount has been approved, the bank will issue a pre-approval letter/email which will be valid for 60 days. 

3. Finding the right real estate agency 

There are various real estate agencies across Dubai, and finding the right agent who understands your criteria, requirements, and budget makes your property-buying experience much more straightforward.

By identifying an experienced real estate agent that takes the time to understand all of your needs and desires will make a huge difference to your experience and maximise your chance of buying your perfect property.

4. Viewing properties 

Once the property agent has been finalized, it is time to search for the dream apartment! It may take several viewings before a buyer finds an option close or matching to their preferences. Patience is key throughout the process, ensuring you consider multiple properties to find the right one for you.

5. Making an offer

Once the buyer selects a property, they are recommended to put their offer in writing, along with a 10% deposit cheque. They will also need to submit their passport and Emirates ID copies - these will be required of all the people who will be listed on the title deed. 

6. Signing the MOU/Form F

Once the offer is agreed upon by both parties, an MOU (Memorandum of Understanding) will be drafted - also known as Form F. Upon reviewing Form F, both parties may sign the contracts. 

7. Sales progression process

Buyers purchasing a property through a mortgage will require the bank’s involvement. Here is how such a process is likely to go:

• The buyer will need to obtain a bank valuation on the property along with a final offer letter from the lender 

• If the seller has a mortgage on the property, the buyer will have to settle that amount in full before proceeding with the NOC application. In such cases, the seller should request a mortgage settlement statement from their bank - as it could take up to two weeks.

8. Applying for an NOC

Here is how the NOC application process may go for both parties:

• The seller will submit an application for an NOC

• The payment fee for an NOC is usually AED 500 - AED 5,000 depending on the developer. Certain developers may also request a refundable deposit from the buyer - which is returned upon the title deed approval and an update of records (which takes approximately five working days). 

• Once all amounts due are settled in full, the developer will issue the NOC.

9. Transfer of ownership 

After issuing the NOC, all parties will proceed to the DLD’s office to officially transfer the apartment's ownership. The buyer may be required to provide: 

• A manager’s cheque for payment of the purchase price made payable to the seller on the date of transfer.

• A manager’s cheque for the 4% transfer fees due to the DLD 

• An admin fee - the maximum amount of which is AED 4,000 

Once the formalities are completed, the title deed will be issued in the buyer’s name. 

Conclusion

Buying an apartment/villa in Dubai may seem complex, but authorities like the DLD and Real Estate Regulatory Authority (RERA) have created processes and guidelines to make the process as fast and stress-free as possible for buyers. 

We hope this article gave detailed and helpful insights to those looking to buy an apartment in Dubai. For more information, contact an expert and get started on your search for a dream home in Dubai.