RERA Forms & Dubai Laws in The Real Estate Market: opr.ae

Introduction

When you buy or sell real estate in Dubai you face a lot of legal technicalities, so if you have no idea about the specific procedures or documents which may be needed in the process, this can cause an undesirable effect and lengthen the exercise. Many investors consider buying real estate in the UAE so we are going to take a closer look at the legal and practical issues of owning property in the country.

Who can own and obtain the rights and benefits to real estate in the UAE? There is no direct ban on foreign ownership of land plots in the Civil Code. Each emirate can enact its own regulations for property ownership. UAE citizens, citizens of GCC countries, and businesses wholly owned by them can possess real estate anywhere in Dubai (Article 4 of Law No. 7 of 2006). A non-UAE or non-GCC citizen can own a freehold, leasehold (up to 99 years) or usufruct in certain areas of Dubai, as stated in Regulations No. 2 of 2006 (amended Regulatory Provisions No. 1 of 2010). Non-UAE and non-GCC citizens can own property on the territory of free economic zones.

Carrying out real estate deals between agents, buyers and sellers should enlist some basic forms of the Dubai Land Department demanded by United Arab Emirates law. Let's take a closer look at the documents.

Form A

This RERA form is among the most important. All those who decide to sell their real estate in the UAE should take a closer look at this document. When the seller finds an agent to pursue the sale, they will both need to sign an A RERA form.

The most important points of the deal carried out between the seller and the agent are placed in this form. It covers all aspects of the property and its characteristics. The form also needs to state the financial details such as the price, mortgage status and payment deadlines. The information regarding the way of selling the property is also stated on the form. This point is a guarantee that the property will not be posted on any other services or sites without common agreement. When both parties sign Form A, Trakheesi DLD confirms it and assigns a number to the property advertisement.

When a property is advertised, the broker should obtain the seller's information. In the case of when two or more people own the property, the RERA Form A must be signed by both of the owners.

Form B

If you choose to buy real estate in the UAE, you will have to sign Form B. This is a RERA form with the buyer’s signature to acknowledge and accept the making of a deal with the agent. To provide a smooth and comfortable search for real estate, we advise to look for agents with the RERA certification.

Agreements Prior to The Sales Contract for Real Estate in The UAE

The buyer and seller usually sign a short memorandum of understanding form that confirms the main details of the deal. Typically, such a memorandum of understanding form is binding on parties awaiting the signing of a sales deal.

UAE Purchase Agreement Contract (Form F by RERA)

The contract is based solely on offer and acceptance and is regulated by the Civil Code (Federal Law 5/1995). The Form F of the Dubai Land Department will list the property, financial details and the fees both parties paid to the agents. As a matter of fact, Form F by RERA becomes valid only when it was signed, certified, and dated by the agent.

In May 2014, the Dubai Land Department initiated the launch of unified real estate contracts, which are templates for written contracts to be used in all real estate deals, and can be embellished with further modalities as needed. This is one of the obligatory RERA forms for any real estate activity in Dubai. It does not require a notary for the sales contract.

Sales contracts can be drawn up by the counter-party and sent via email. The completed sales contract must be offered to the appropriate land department for registration.

UAE Real Estate Seller Guarantees

The seller guarantees:

Property rights are not burdened or pledged
Right to sell
No debts provided that service costs are completely paid
Obligations for the property and development have been fulfilled

In Dubai, the developer of an unfinished property is considered to have provided the buyer with the guarantees set out in Article 26 of Law 27/2007. The Civil Code contains certain provisions suitable for arrangements for the sale of land.

The Obligations of The UAE Property Buyer

The buyer must pay half of the property transfer fee unless otherwise provided in the purchase deal. The buyer must submit the required papers to the appropriate land department to pass ownership (for example, a visa or Emirates ID in an individual’s case or corporate documents for a corporation).

The lease does not have to be in written form for it to be legal, although it will be much more difficult to prove a commitment based on an oral agreement in the future.

In March 2017, the Dubai Land Department introduced the binding Unified Ejari Tenancy Contract, which are templates for written leases to be used for all lease transactions and can be completed with further modalities if needed.

The Civil Code carries certain implied provisions in relation to leases (Articles 742-796). In Dubai, Law 26/2007 includes certain provisions in relation to lease agreements. For example, a landlord can evict a tenant during the lease term if the lease is not paid.

The lease usually includes:

Rent terms
Summary of the premises
Permitted use
Expenses
Terms of Repair and Maintenance

The parties are free to agree on the rental period. Office leases are usually for three to five years and renewals can be discussed towards the end of the contract. The maximum rental period is 99 years. The tenant may vacate the rented premises without official notification at the end of the lease term unless the lease states otherwise.

According to Article 757 of the UAE Civil Code, if the lease expires and the tenant continues to use the property with the knowledge of the landlord and without objection from his side, then the lease is considered renewed on the original terms and for the same period.

Similarly, if the tenant stays in the property after the lease expires and the landlord has no objection, the lease will automatically renew under the same conditions for the original lease or for one year, whichever is the shorter (Article 6 of Law 26/2007).

These are the basic legal details for you to know if you decide to buy, sell, or rent property in the UAE. This is not the whole list of the legal framework, and it may vary depending on the specific emirate. So long as you use a trusted and competent agent there is no reason why the deal shouldn’t goes flawlessly.