What is DLD?
Dubai Land Department - DLD is a government agency that provides necessary legislation, organization, and services for any real estate transactions in Dubai.
What is Dubai Land Department?
Founded in 1960, Dubai Land Department (DLD) was established in order to safeguard the property rights in Dubai and is considered a government entity that provides a comprehensive range of real estate services. It handles all matters of legalization for purchase and sale of land, and is responsible for registration, organization and promotion of real-estate investment in the city.
What is RERA Dubai?
Real Estate Regulatory Agency (RERA) is the regulatory arm of DLD that regulates the real estate sector in Dubai. It handles the relationship between all contracting parties and organizes the properties’ exchange process.
What is RERA contact number?
RERA can be contacted on +971 4 8004488.
What is DEWA Dubai?
DEWA is short for Dubai Electricity and Water Authority that handles water and electricity supply in Dubai. It provides citizens and residents with a continuous and reliable electricity and water supply.
How do I apply for DEWA?
You can apply for DEWA either online on their website or visit on-site to collect application for DEWA Services, they have several branches all over Dubai.
What is Ejari Dubai?
Initiated by RERA, Ejari, derived from the Arabic word ‘my rent’, is an online electronic registration system designed to regulate and orchestrate every registration for each tenancy contract in Dubai’s rental market.
It’s created with the aim of meeting the city’s law requirements as well as RERA’s vision and mission to protect the rights of individuals and to establish a robust regulatory system in the rental market.
What is Makani Number?
Makani number a unique 10-digit number that enables to locate building or any other property. The number is given to each building and every location. It helps all residents and tourists to search, and locate places desired destinations by navigational devices.
There is also an application developed by the Dubai Municipality. Dubai is the first city in the world to use these unique numbers to exactly locate building’s entrance(s).
What is an affection plan Dubai?
Affection plan is an official site plot plan issued by Dubai Municipality and obtained by the property developer or owner.
Is it a good time to invest on properties in Dubai?
The UAE is the second safest country in the world, and its populous city has one of the busiest airports for passenger traffic. Dubai is no doubt growing fast, especially with Expo 2020 that is set to welcome 25 million tourists and business visitors. The city also has easy access to the world’s emerging market and has great infrastructure, in addition to stable currency. So, it’s a great opportunity to invest in Dubai property.
Why invest on properties in Dubai?
The city has grown exponentially throughout the years and continues to maintain its status for investment among foreigners and nationals. Dubai’s properties offer best long-term returns averaging 7-10% in several areas. Also, Dubai has strong regularity authority and draws interest in investments for its open and free system which attracts Foreign Direct Investment, giving it plenty of reasons to invest in local properties.
What are the best areas to invest in Dubai?
Dubai offers a wide variety of areas to invest and there are many reasons why should you invest, and it all depends on the right opportunity and the hot price, and these factors keeps on changing from time to time.
Who are the top property developers in Dubai?
The top developers in Dubai are Emaar Properties, Meeras, Dubai Properties, Nakeel Properties, MAG Property Development, Wasl Asset Management, Sobha Group,UP and Aldar Properties.
What is Oqood?
Oqood, which loosely translates to ‘contracts’ in Arabic, is an online service provided to the developers by Emirates Real Estate Solutions (ERES), with an aim of easing the registration process for property buyers and developers.
How much do real estate agents receive as a commission?
RERA (Real Estate Regulatory Authority) in Dubai did not put down a specific rate in regards to commission. Generally, the agent’s commission is 2% of the purchase price and 5% on the total annual rental.
What is the average size of different units?
Most studios and one-bedroom units are the same size. Some units have balconies and some do not. Retail shops on the ground floor vary in size and are priced accordingly.
Studios - Size Ranging from 300 to 950 Sq. ft.
One Bedroom - Size approximately 500 to 1800 Sq. ft.
Shops - Size varies, upwards and downwards of approximately starting from 400 Sq. ft.
What are the required documents needed to list a property for sale with a Real Estate Company?
The Landlord shall provide the
2- Landlord's valid Passport (If owner is not resident) and Residence Visa copy & Emirates ID if owner is resident in UAE.
3- Sign the Required form to advertise the unit (FORM A)
4- If the property is rented copy of the Tenancy contract
Everything you need to know about UAE residency Visa
a) Can all family members get a UAE residence visa: i.e. Father, Mother, Parents, and children under 18 and unmarried daughters?
Yes. Expatriate employees or employers can obtain a residency visa. There are three ways they can change their status from an entry permit holder to a resident visa holder: official employment, company registration, and real estate acquisition(Property value most above 1 Million Dirhams).
Once they have a valid residency permit, male residents can sponsor his spouse and children (under 18 years of age) and any unmarried daughters above the age of 18 years (Terms & conditions apply).
Expatriate employers are issued residency visa for three years, while expatriate employees are issued residency visa for 1 to 2 years, depending on their labor contract.
If you have a property (or multiple properties) total value 5 Million Dirhams and above
You can apply for 5 years residence visa.
The UAE cabinet granted long-term visas to certain expatriates such as entrepreneurs, specialized talents and researchers in the knowledge and science field, and outstanding students, with some conditions.
b) Who issues the residence visa and is it guaranteed?
The Government of Dubai issues it and it is guaranteed as long as the property purchaser owns the property, clears all security and medical tests, and is not rejected by the Ministry of Labor and Social Affairs.
c) If the property purchaser is not living in Dubai but plans to in the future, what will be the procedure to obtain a residence visa?
The type of residency visa you're entitled to depends on the value of the purchased property. Once the property purchaser buys a property, he/she is automatically entitled to obtain a residence visa anytime he/she wants as long as this low is valid.
Applying for residency visa can be done either on the website of Federal Authority for Identity and Citizenship (ICA), which is the eChannel for citizenship and residency, or the General Directorate of Residency and Foreigners Affairs (GDRFA), which works under the UAE ministry.
d) If the property purchaser is not living in Dubai, can they get a visa in a different person’s name such as their employees or other family members etc.?
No, only the principal property purchaser gets a residence visa but may sponsor his/her dependents.
What is Off-plan?
A property before a structure has been constructed upon it; Under construction property.
What are the advantages of buying an Off-plan property?
Buying an off-plan property means you commit to purchasing a property either before or during the construction phase. It has significant advantages:
Plan and save money – It allow investors to get a purchase at the earliest and lowest possible price and buyers to pick the very best apartments in a specific development. In return, there's a high chance of gaining the maximum return on their investment.
Sell before the completion date – Investors can sell off their off-plan property contracts prior to the completion of the projects and at a considerable profit (assuming the market is well-performed and proved popular.
Lower up-Front Costs – Off plan property payment plans can and do vary from different types of developers in Dubai. Some of the developers only require a 10% down payment and the rest linked to constructions the required expenditure is relatively low.
What are the potential risks in purchasing an off-plan property?
The potential risks when purchasing an off-plan property are:
Delayed Completion Time – There are usually delayed handovers of off plan properties and there are have been cases of projects being completed after scheduled completion dates. In this case, it's highly advisable and important to do research on the project developer and look into their track record, make certain any signed sale agreement ensures you are compensated for any unexpected or unscheduled delays.
Change in Market Conditions – The real estate market fluctuates all the time. If there's a downward move in property prices, the property can be worth less than what the buyer has actually paid. It can affect off plan properties more as it may be harder to liquidate than ready-to-move-in properties.
How does the sale process work to sell an off-plan property?
The new homebuyer pays the seller an equal amount to what they've paid off to the developer (+/- any difference agreed on). Then the new buyer will take over the existing payment plan of the off-plan property and pay all future due installments directly to the developer.
When can I sell my off-plan property?
Investors can sell off their off-plan property contracts prior to a project’s completion and so it varies from developer to developer. For example, before being able to sell it to a new owner, Dubai’s top developer Emaar Properties requires owners or investors to have 40% of their off-plan property paid off. However, the 40% figure does depend from developer to developer, so it’s essential to check with the developer.
Note: Despite the mentioned above you could fine someone interested to buy your property before you reach 40% and he is willing to pay the upfront installments to the developers in order to transfer the unit under his name
Buyers and seller must come to agreement with price and terms, sign contracts and apply for No Objection Certificate (NOC) where the new buyer is registered with the developer. Once transfer is complete, the new buyer will ultimately take over all the outstanding payments.
It's important to point out that the new buyer is responsible for the 4% DLD Transfer Fee although it been paid by the first buyer.
Can I sell an off-plan property before its completion date?
Yes, you can sell off plan property before the completion date in Dubai.
How can I sell an off-plan property before completion?
The first step is to contact the developer and find out how much must be paid off of the property in order to obtain a sale No Objection Certificate (NOC). The exact percentage or figure is usually somewhere around 30-40% but will vary for different developers in Dubai.
What guarantee do I have that my development will be completed?
RERA has introduced numerous measures that needs to be met by developers to make sure the off-plan project is completed. Of those measure, the developer must own 100% of the land belonging to the project. Additionally, they must either deposit 20% in escrow account, make a down payment of 20% as bank guarantee, or at least 20% construction completion before selling the off-plan property. The regulatory arm of Dubai Land Department than requests contractors to submit a 10% performance guarantee.
Make sure the project and project’s Escrow account are all registered in the Dubai Land Department’s Real Estate Regulatory Arm (RERA).
If you are paying to the Escrow account of the project that’s mean you are paying to the government and the government from their end will only pay to developer as per his project construction progress (DLD send their consultants to evaluate the progress of each project, and each investor can track the same through DUBAI REST application
What documents do I require to sell my property?
To sell your property you will require
1- the original title deed of the property obtained through registration at the Dubai Land Department.
2- NOC (No Objection Certificate) from the developer to confirm that the property is free from any liabilities such as the outstanding mortgage or unpaid instalments or service fees.
3- Your original passport would be required and any other documents and receipts pertaining to the original sale and current state of the property.
4- If your property is rented you will need a copy of your tenancy agreement and if you have sold through a registered Real Estate Agency a signed sellers agreement known as a Form A would be needed.
Where do the sale transaction and transfer of ownership take place?
All transfers are now handled through the designated Dubai Land Department Trustee Offices located throughout Dubai. All parties pertaining to the transaction must be present. This can include a Power of Attorney (POA) delegated by the seller. When handling a transfer through our agency we will advise you as the broker what documents and payments are required on the day of transfer.
Do I need to involve a lawyer when selling my property?
The services of a lawyer are more usually engaged in other parts of the world when selling a property, however, this is not necessarily the case in Dubai. Contracts of Sale (or Memorandum of Understanding) are prepared via the agency handling your transaction and should be in line with the Dubai Government regulations. Please note a Power of Attorney (POA) cannot be anyone working for a Real Estate company in any capacity.
Is there a cost to register my property and get my title deed?
For any off-plan sales, land registration is now done with the developer in line with the original purchase of your property. The registration fees are 4% of the purchase price and this cost is exempt from VAT. In the case of secondary sales this 4%, known as the transfer fee, is paid at the time of transfer of ownership and can be divided between 2 parties, the Seller & the Buyer.
Do I need to turn up in person for the registration process?
Yes, or else you can authorize someone to come to register your property with a notarized Power of Attorney. The POA should be specific to the property and specify the purpose and the power within the contents to cover registration of the property into your name, the collection of original Title Deed and include the set-up of utility accounts. It has been known for developers to also undertake this process on a owners behalf if requested and required.
Am I restricted on when I can sell my property?
As a seller, you are authorized to sell your fully paid for and completed property on the resale market at any time once you are in receipt of your Title Deed. If your property is not yet completed and final payment has not been made, then the developer will need to be consulted on transferring the payment plan to the new owner and to confirm that your payment instalments are up to date in line with your original Contract of Sale. It may be included in your initial Purchase & Sales Contract that a certain amount of the total purchase price (e.g. 40%) must be paid before Developer will approve a resale. Additionally, for off-plan property sales, the developers may set an MSP (minimum selling price) so to not undercut their available primary sales.
If I have a sitting Tenant can I still sell my property?
Having a valid tenancy contract on the property does not prevent you from selling. It will be part of your agreement with a buyer to transfer the tenancy to the buyer whom will automatically inherit the tenancy terms and replace seller as the Landlord. You may have to consider a refund of future rent for the remaining period of the lease and you will have to transfer the tenant's security deposit to the buyer. Ensure that your tenant has been served the appropriate and correct legal notice.
What is the notice period I have to give to my Tenant if I want them to vacate so I can sell as vacant property?
Law 33 of 2008 Article 25 states a Landlord may demand eviction upon expiry of tenancy contract if the owner of the property wishes to sell the leased unit but must notify the Tenant of the reason at least 12 months prior to determined eviction date and notification must be delivered by Notary Public or registered mail.
My property is mortgaged and I don’t have the original Title Deed. Can I still sell my property?
Your lending bank can provide you with a certified copy of your Title Deed but will retain the original until the loan amount is fully cleared. The mortgage will have to be paid in full in order to release the original Title Deed for the sale formalities. The Dubai Land Department apply a small charge for mortgage discharge which is a further requirement before finalizing a sale.
Do I have to give the Tenant a further full one-year contract if I have served the required notice 6 months ago?
The minimum period of 12 months for eviction will commence from the date the Tenant receives the notice. In the event this notice has been provided more than 90 days before expiry of the current tenancy contract then you can opt to request the renewal from tenancy contract expiry only until the date the end of 12-month period. Any changes to the tenancy contract term must be done in writing at least 90 days before tenancy contract expiry unless otherwise agreed within tenancy terms.
How can I receive the money from the sales proceeds if I don't have a local UAE bank account?
Sales Proceeds at transfer must be in a Dirham managers cheque made payable to the owner/s names on the title deed. This can then be deposited and cleared in your home country bank account. Many overseas banks have a multi-currency account facility and you may consider opening a UAE Dirham account for quicker clearance. Whilst UAE banks are very accommodating when opening bank accounts, most banks will now require a UAE residents visa to open an account.
How do I know if I am achieving a realistic market for my property?
It can be misleading for Sellers to assess their property value from the marketing material that collective agencies promote. A listing price may not be the actual selling price. Owners also rely on their chosen agency to provide them with an assessment of the value; however, this could vary from agency to agency depending on their experience, professionalism and knowledge of the product. Here, we offer specialist sales client managers whom can provide historical and factual market figures to support the valuation and achieve the right price for your property. As a seller your agency would be asking you to sign a Sellers Agreement Form A which confirms your instruction to list your property for sale.
Is buying property in Dubai a good investment?
There are plenty of reasons why it’s a good investment. Dubai has 0% income tax on capital appreciation and rental yields and has among the world’s highest rental yields, with an average of 7-10%. Its properties have extra luxury space per square foot compared to other markets like New York, Sydney, London and Paris. With US $1million, the amount of internal square meters one could buy is 138, compared to other cities like Hong Kong, Mumbai and Berlin. Additionally, the city’s properties also include interest rates between 3-5% with repayments that can last till 25 years.
Is VAT applicable on buying offices rent in Dubai?
Whether leased out or sold, any commercial property such as offices, retail and even car parking is taxable, in the UAE. If it’s part of a residential property, then there’s no tax.
Is there a VAT on buying residential property in Dubai?
Overall, residential properties are largely exempted from VAT unless you buy a hotel apartment from the developer for the first time e.g., if you buy in Rove Citywalk from Emaar, then you should pay 5% VAT.
Also, VAT does not apply to the 4% Dubai Land Department registration fees, but VAT does apply to the broker commission and to the trustee office fees.
Can any foreign nationals own freehold property in Dubai?
Yes, any nationality can own freehold property in designated freehold areas in Dubai and an heir can inherit it.
Can a land or property be registered in the name of a foreign company?
It can if it is registered within the specified areas for foreign ownership with obtaining license for Jafza, Jebel Ali Free Zone.
What is a freehold property?
The owner of a freehold title of real estate enjoys the most superior form of private property ownership. A freeholder is considered to be the absolute owner of the land and buildings comprised in his title; he has the right to occupy, use and enjoy his property forever (“in perpetuity”) or until he transfers the title to a new owner, and his heirs are entitled to inherit his title upon his death.
What is the difference between freehold and leasehold?
Freehold means outright ownership of the property. While leasehold, it means the holding of property by lease for a period of more than 10 years up to 99 years and can’t be purchased outright.
Do you get a residency visa if you buy a home?
Yes, you can as long as the property value above one million Dirhams.
Do I have to pay tax on Dubai property if I am resident abroad?
No, you don't have to pay tax if you are a resident abroad.
5% VAT applies to commercial properties & Hotels & Hotel apartments.
What is a transfer fee?
A transfer fee is payable if you transfer your property to someone else. It is an administrative charge levied by the Dubai Land Department.
What is the purchase process?
Typically, the prospective Buyer and Seller enter into an agreement (Form F), wherein the buyer commits to purchase the property and the seller commits to sell the property. In a purchase transaction, the buyer pays an initial booking deposit (of not more than 10% for villas and apartments) to the seller.
If the buyer withdraws from the transaction, the buyer forfeits his booking deposit. If the seller withdraws from the transaction, the seller refunds the booking deposit amount. The buyer pays the balance considered to the seller upon transfer of the property to the buyer.
What are the procedures involved in re-sales and transfers?
a) Can a property purchaser sell his property?
Yes, you can unless it’s off-plan property then usually there is a minimum percentage that you should reach in order to sell your property( It vary from contract to contract)
b) How is a transfer made?
In order to allow the transfer to a new buyer, developers usually require a property owner to sign a transfer letter with the new buyer at the developer's office. Developers then usually proceed to issue a new property contract with the new buyer.
c) Does a property purchaser have to be in Dubai to get property transferred?
No, a power of attorney can be appointed to someone in Dubai who may engage in the transfer formalities (the POA must to be notarized and authenticated by the UAE Embassy in the property owner's country of residence).
Note: There Expiry date for the POA in Dubai even if it’s not mentioned on the POA which is 2 years.
d) Is a power of attorney sufficient for the all transactions to be made including transfer?
Yes, to purchase a property, a notarized POA is sufficient. To sell a property, a notarized POA + authentication by the UAE Embassy and DFA is sufficient.
What are the maintenance and parking charges?
Service charges, A/C and sinking fund is charged per sq. ft. with rates starting from AED 2 per sq. ft. As for parking, it is paid yearly per bay/slot and starts from around AED 1,000.
What documents are filled in to purchase on the primary market, i.e., directly from developer
The buyer of a freehold property in Dubai only needs to provide a copy of his passport papers to purchase a property in the primary market, i.e., directly from a developer. A company purchasing a property must provide the developer the company's registration documents (Articles of Incorporation, Registration Certificate, POA of the person signing on behalf of the company, and Board of Directors Resolution).
Either entity, i.e., a person or a company, needs only to sign a property reservation contract with the developer to purchase a property. On handover of the property to the property purchaser, the property purchaser will have to register his property at the Govt. of Dubai Lands Dept. to obtain a title deed.
The property purchaser would be responsible for paying the fees to the Govt. of Dubai Lands Dept. to obtain a title deed (this normally amounts to 4% of the property value). The property value must be fully paid up so as to obtain a Title Deed from the Govt. of Dubai Lands Dept (Sometimes Developers has offers on this part).
Payments - schedule and in favor of whom?
a) What are payment schedules and on-going installments? What is the currency of payment?
There are multiple payment installments methods
Exp: Payment Schedules (A, B, C, D) and usually there is a discount applicable for paying more upfront i.e.
Payment Schedule A: Reservation Fee = 5% plus further installments
Payment Schedule B: Reservation Fee = 10% plus further installments
Payment Schedule C: Reservation Fee = 15% plus further installments
Payment Schedule D: 100% paid on reservation.
All payments to the building owner must be made in AED (UAE Dirhams). 1 USD = 3.68 AED (fixed rate).
b) What form of payment is accepted?
Wire Transfer / Bankers Draft / Money Order / Credit Card (at a later date)
c) Does the building owner issue a receipt for every payment paid?
d) Does the building owner send a statement of account to the property purchaser every month?
No, a receipt is sent only when an installment is received OR upon your request.
e) Is there a penalty for late payments?
Yes, if the property purchaser delays a payment, he is charged late payment interest at the rate of 1% per month.
If the property purchaser delays the payment of 3 installments, the seller reserves the right to cancel the sale and up to 30% of the unit’s value may be forfeited.
f) Who should the payments be made to?
If the property purchaser purchases the unit without financing, then the payment is made in AED via banker’s draft or telex transfer to the
1- If the property is off plan: Project Escrow-account only.
2- If it’s ready property: Manager Cheque under the owner name as per the Title Deed
Note: The Cheque Most be under the owner name in the Title Deed only (Even if there is POA and in his POA clearly mentioned that he is authorized to sell the property and receive the selling amount under POA name) as per UAE rules the purchase cheque strictly must be under the name of the owner as per the Title Deed.
Renting your purchased property
a) After completion, what is the estimated average annual rental for units?
Property owners can expect rental yields of 6% to 10% p.a. on the value of their property. The rental agents’ charges to manage the property on behalf of the owner are approx. 5% to 8% of the annual rental amount.
The above mentioned are indications and may vary depending on the location and quality of the project.
c) Is the rental market robust?
Yes, it may be beneficial to read the Gulf News’ (leading UAE daily newspaper) articles on rentals and market trends.
Selling your property
a) If the seller wants to sell his property what are the charges normally charged by sales agents?
Between 1% to 2% of the property value.
b) What is the transfer fee if between family members?
For first Blood relatives it goes down to 0,125% of property value, or minimum of 2,000 Dhs.
c) Do the property purchaser and seller need to be in Dubai at the same time to transfer a property?
No, as long as the power of attorneys are properly notarized and appointed.
d) After I sell my property, how long is the residence visa valid for?
Are foreigners restricted from purchasing in Dubai?
No, anyone can purchase property in Dubai across all designated freehold and leasehold developments either primary sales directly from the developers or in the secondary resale market.
Lease or freehold?
Freehold properties are most commonly available when buying. This is when you own the structure and land in perpetuity. However, one might occasionally find a property for sale in a leasehold development which implies that a third party has an interest in the property, usually the land. Leasehold contracts are normally renewable after 99 years.
Can I purchase a property cheaper directly from the developer?
All developers in Dubai has fixed prices, and they do respect their relation with the agents, technically when you visit the developer with any agent, you don’t need to pay any commission to the agent because he get his commission from the developer(If he did so leave him), and the Plus point you get, that you have an expert (Make sure that he is really an expert)helping you to get the best property in Dubai for free.
What payments are required?
The standard minimum deposit is 10% of the purchase price, payable on signing the contract of sale. On secondary resale’s the balance payment is made on transfer of the ownership and dependent on the terms of the contract but usually 30 - 60 days later. On primary sales, there are staged payments made at regular intervals to the developers through to completion. Managers cheques are a must to ensure effective transfer.
How long is the purchase process?
It really depends on if you are mortgage buyer OR cash
& if the Seller property is mortgaged or he bought it in cash
1- If Cash buyer Cash seller the whole transaction will take (5 to10 working days).
2- If Cash buyer Mortgaged seller the transaction will take 20 to 30 working days
3- If Mortgaged Buyer, cash seller it will take 20 to 30 working days
4- If Mortgaged Buyer, Mortgaged Seller it will take 30 to 45 working days
But if you live out of UAE you don’t really need to be in UAE during the whole process and you have the option to make a POA to any one you know to complete the process on your behalf.
Are there annual service charges when I buy?
Reasonable service charges are payable to all developers / homeowners’ associations for maintenance, landscaping and refuse collection. This charge varies according to the development and is normally calculated on the built-up area of your home.
What happens if the property I purchase is already tenanted?
As the new owner, you inherit the tenant and the terms and conditions of the tenancy agreement. A prorated rent back figure can be calculated as part of the contract of sale and ensure that all future rental cheques are changed to your name as the new owner. The security deposit paid by the tenant to the landlord (Seller) at lease commencement also needs to be transferred to the new property owner whom will take over as the Landlord.
Do I need to be in Dubai to complete my purchase?
If you are not able to be in Dubai, then a Power of Attorney (POA) can be used to buy property on your behalf. The person nominated by yourself cannot be employed by a Real Estate Agency in any capacity. The POA will need to be accredited both in the UAE Embassy located in the country where the delegation has been issued and again in the ministry of foreign affairs in the UAE. To arrange a POA from Dubai the process is quicker and more cost-effective but you have to be present in person in Dubai and it takes 90 minutes to issue it.
Are there any other costs I need to consider & what taxes must be paid?
When buying on the resale market there will be a real estate agent commission that is paid to the broker handling your transaction and this is normally 2% of the purchase price or is charged as a minimum fixed amount. As a buyer, you will also be expected to pay a transfer of ownership fee to the Dubai Land Department (DLD) which is 4% of the purchase price. There is a set fee of AED 4200 payable to the Transfer Office that completes the formalities of the transfer. While there are no capital gains taxes, 5% VAT is applicable (effective from 1st January 2018) on agency commission and transfer office charges as the service providers. If your property is mortgaged, you will expect to pay a further 0.25% of the mortgage value as mortgage registration however loans and mortgages are exempt from any tax.
Does ownership entitle you to residency?
The Dubai Government will issue 2-year renewable residence visa to property owners subject to conditions. For completed properties purchased over and above a value of AED 1,000,000, you can apply. The Property owner can sponsor additional family members including maid/driver. This residence visa does not permit you to work in Dubai.
What is the investment potential of Dubai property?
Investors in Dubai enjoy high capital growth and rental yields of anywhere between 6-10% and together with the tax-free regime, makes Dubai a highly sought after property location. With Government initiatives and regulations to secure & protect the real estate industry along with the geographical position of the U.A.E attracting international investors.
Can I get pre-approved mortgage?
Whether you live outside or inside UAE you can get pre approval for your mortgage.
How do mortgages in Dubai differ from those abroad?
Firstly, lenders do not lend on every project currently being built. Often, developments are sold with no lending at all (given the favorable payment structure system in Dubai and not meaning they aren't saleable). On the other hand, it is possible to get a mortgage on an off-plan property here, unlike most places in the world.
How do local finance houses assess and issue mortgages?
It is usually based on your monthly income, less expenses, and then divided to three parts. This gives the figure used to calculate from, for each month over the term. They do not base it on how well the asset might perform, nor does it allow low loan-to-value (i.e. large down-payment with a small loan). This makes it limited. Even if you are earning a seriously good wage, do not assume that a bank will lend you substantial sums.
How much can I borrow?
While resident expatriates can generally borrow between 70% to 75%, non-residents can generally borrow 60% to 70%. It all depends on the Bank, and the project they are lending on.
How much will it cost me to rent my property?
Any agency fees are paid by the tenant so listing your property for rent with MHM Real Estate LLC will not cost you any commission as the landlord. You must, however, prepare your property for occupancy which may include repainting or landscaping but one of our Leasing Client Managers can advise you on this when we appraise your property. All utility bills will need to be paid up to date before they can be transferred into a new tenant’s name and Tenant may be denied occupancy is any outstanding service charges due on the property.
Do I have to pay for the marketing of my property?
We do not charge to market your property for rent in both print and online media. As a leading real estate agency in Dubai prime positioning in newspapers and on online portals are assured.
To register my property for rent, what documents are required?
Proof of ownership is required - a copy of Title Deed, passport and keys/ access to the property.
What happens when I accept an offer on my property?
Once you have accepted an offer from a prospective tenant, an agreement known as a Tenancy Contract needs to be signed by both you and the tenant. This agreement highlights the terms and conditions. The tenant shall pay a security deposit of 5% of the value of the annual rental amount and should also provide post-dated cheques to you for the duration of the agreement.
Who sets the number of cheques that should be accepted to rent a property?
As a landlord, you can decide on the number of cheques you wish to collect over the duration of the lease. Flexibility on multiple cheques is more attractive and competitive. While it can range from one cheque for full annual rent up to 12 monthly, the majority of tenancy contracts are agreed on 3 - 4 instalments for one-year period.
Do I have to be present at all viewings of my property?
A prospective tenant may be more relaxed looking around a property if the owner is not present. MHM Real Estate will conduct all accompanied viewings on your property. We encourage landlords to trust us with the keys and access cards to maximize access and exposure of the property. We take responsibility of your keys very seriously and these are registered in and out of the office throughout the working day.
Is it necessary for me to register my tenancy agreement with the government?
It is compulsory to register your tenancy and obtain the Ejari Certificate. Government departments including Dubai Courts and Rental Dispute Center will not assist with any tenancy related enquiries without producing this Certificate.
Do I need Ejari for DEWA?
Yes, all customers will be required to obtain Ejari for DEWA since July 1st, 2017.
How can I get Ejari?
Usually the tenant or the real estate agency (If the property is managed) completes and takes care of the process. In order to get Ejari. You can visit one of the 70 typing centers. with all the required documents needed to successfully register for Ejari.
How long does it take to get Ejari?
Once the required documents are successfully submitted, it takes 1-2 days only for the Ejari application to process online, Or if you visit the Branches you will get it within one hour.
Who is eligible to register for Ejari?
Landlords, Tenants, property management company (If the property is managed), and landlord representatives can register as long as he has POA & his visa is not on Real Estate company.
How can I register to Ejari?
Required documents to initiate Ejari registration include:
1. Copy of the title deed,
2. Copy of the tenancy contract,
3. Copy of the landlord’s passport, Visa Page, Emirates ID (If landlord is resident), If not then landlord passport copy is enough along with his signature page.
4. Copy of the tenant’s passport and visa page and Emirates ID.
RERA charges per registration of tenancy contract is AED 160.00(Excluding Typing charges).
Once the documents are submitted and the payment is made, registration will usually be completed at the same time.
How much does it cost to create an Ejari account online?
Who should I contact if a repair needs to be carried out on my property?
It is sometimes difficult to have maintenance issues dealt with on an ad-hoc basis as most maintenance companies prefer property owners to have an annual maintenance contract. This is the advantage of enlisting to our management services where MHM Real Estate can provide efficient and cost-effective maintenance solutions to help ensure your property is well maintained.
My property is fully furnished, what is the expected security amount I can collect from the tenant?
For furnished properties, the market expectation is the tenant pays 10% of the annual rent or 1-month rent for refundable security deposit. This deposit is held by Landlord for the duration of the lease and refundable only at the time of vacating.
Who is responsible for drawing up and checking the inventory on my property?
Unless your property is managed by us, this is normally between the landlord and tenant. Consultation with your Leasing Client Manager can guide you on how best to manage this to ensure there is no disappointment at the end of a tenancy period.
Can Tenants refuse rent increase?
According to the Real Estate Regulatory Agency
1- landlord must provide a 90-day notice in regards to any changes to the rent contract. Renters can legally refuse a rental increase if the landlord does not provide a notice of 90 days. When reaching an agreement with the landlord on the rental increase, carefully review the contract for any changes the landlord might have made.
2- The Tenant can refuse the Rent if it’s not as per Rental Index Calculator
How to determine percentage of Rent Increase?
Rent Increase Calculator is available in the website of Land Department, it will provide you the current market price and the percentage of increase that can be applied in the Annual Rent of the property. You can go to this link: http://www.dubailand.gov.ae/english/Tanzeem/Rentals/Rental_Increase_Calculator.aspx
Is VAT applicable on commercial rent in Dubai?
Commercial real estate will be subject to the (5%) Five percent value added tax (VAT). This also applies to non-resident owners and tenants.
Does the Tenant need to register his Tenancy Contract with Ejari?
Yes, the Law clearly states that the Rent's Committee shall not consider any claims unless the lease is registered with Ejari.
Can a Tenant use third party cheque for his Annual Rent?
Yes, a tenant can use a third-party cheque provided they will be submitting a Letter of Indemnity from the Third Party and a passport or Trade License if it is a Company Cheque.
What is Security deposit, how much is it and what does it cover?
Security Deposit 5% of the Annual Rent paid by the tenant in advance and held in reserve with the owner in the event of the Tenant failing on a contractual obligation to protect the Landlord in a real estate lease. It covers Loss of Rent, Damage to the Property, Lost of Security Keys and Repairs that are not wear and tear, and any outstanding DEWA OR A/C bills not settled by the Tenant.
Can a Tenant terminate his contract during the Tenancy Period?
It Really depends on the terms and conditions in the contract (This part is negotiable) but Majority of the contracts you can see that Tenant can terminate the contract, provided the Tenant will notify the Landlord one(1) OR two (2) months in advance and will be paying two (2) months rent as penalty from the day of vacating the property and all the utility bills should be settled including Ejary Cancelation.
Can landlords disconnect DEWA, Empower and other utility service to vacate tenant from the property?
No, the Landlord has no right to disconnect any utility service in the Property, and if he do so you can take Legal action against him Immediately.
What are the payments the tenant needs to make once agreed in leasing a property?
The Tenant has to pay
1-The agreed Annual Rent depending on how many cheques both parties agreed with.
2- The Security Deposit
3- The Commission of the Agency.
4- Deposit for DEWA and A/C Provider (if applicable)
5- Ejari Registration.
How much should I expect to pay to rent a property?
1- 5% of the annual rent will be expected to be paid on Landlords acceptance of Tenants offer to lease.
2- You will need to pay your rent up front for the period of lease in the way of post-dated cheques depending on the terms of your agreement.
3- Other costs will include 5% of the annual rent payable to the Agency for commission plus 5% VAT.
4- Ejary Registration
5- You will also need to budget for the deposits required to be paid for connecting your utilities such as water, electricity, televisions etc. 5% VAT is payable on services provided and will be incurred on utility charges.
Can I rent a property if I don’t have residence visa?
No. A residency visa is essential to rent in Dubai.
What documents do I require to rent a property in Dubai?
If the tenancy agreement is being prepared in the name of an individual then you require
1-Tennat passport Copy, residency visa copy.
2- Emirates ID Copy
If the tenancy agreement is being prepared in the name of a company then you need
1- company trade license copy
2- Passport copy & visa copy of the company owner.
3- Memorandum of association contract copy.
4- Passport and residence visa of the occupant/s.
5- A salary certificate may be a further requirement to show acceptable income to cover the rental amount.
Who is responsible for paying any service fees for a property?
The landlord is responsible for paying any services fees relating to the developer service charges.
However as a tenant you are responsible to pay a municipality tax of 5% of the annual rent which is shown separately on your electricity bill (this is separate to the 5% VAT). You may be required to pay a contribution of the air conditioning fees if the property is not set up to meter each unit individually. In this case, the charges are normally made by the developer or owners association and not by a utility provider.
How long is the tenancy agreement?
Typically, a tenancy agreement is for a period of 12 months on a renewable basis.
But you can agree with the owner on longer period (If you wish)
For Commercial Properties: Usually it can be from 1 to 10 Years
Note: If you are investing in decoration would strongly recommend you to take the longest period possible as long as you believe that your business is solid.
Can I sub-let a rented property?
Unless previously agreed with the landlord in the Tenancy Agreement, a tenant is not permitted to sublet the property and should comply with the rules of the UAE.
How do I make a payment if multiple cheques are agreed?
Advance payments are usually made through post-dated cheques which are handed to the landlord, their authorized POA or their appointed management company on signing the tenancy agreement. Please ensure that you always have funds in your bank to clear post-dated cheques as bouncing cheques in Dubai is illegal.
Is there a standard tenancy agreement?
Yes, there is a "Unified Tenancy Contract" which is mandatory and additional terms and conditions can be included in an Addendum to the Tenancy Contract. Please be sure to read the small print and understand each clause.
As a tenant, can I make any structural changes to a property?
You are not permitted to make any changes without written permission from the landlord. This includes any painting, fixtures and fittings.
Can the Landlord increase the rent next year?
Rental prices are governed by the Rental Index issued by RERA (Real Estate Regulatory Agency) as set out in Decree 43 of 2013. Increases are allowed depending on the market rates and the current rent being significantly under the average rates.
How much notice do I need to give for early termination?
Unless there is a provision in your tenancy agreement for early termination it is subject to discussion and agreement between the landlord and the tenant. Otherwise, the term of the contract should be honored by both Parties.
What happens if something in the property needs replacing/ repairing?
The landlord is responsible for general wear & tear of the property and any major replacements and repairs. The tenant is responsible for any breakages and any minor replacements and repairs. Further terms may be outlined in the Tenancy Contract.
Why should I use a broker to sell or lease my property?
Enlisting the services of a commercial property broker increases the chance of selling or renting your property out quickly. This is a specialized segment of the business and the broker should not only have a thorough knowledge of your property in order to fully promote and market but potentially could have waiting customers or have access to potential clients to purchase or lease your property.
How rent increases apply to commercial property?
The laws regarding rent increases apply to both residential and commercial landlords with property in Dubai. The one main difference is that a commercial lease is likely to be negotiated for a 2 to 5-year term and whereas a residential lease is generally for 12 months.
Do I need a trade license to have a business in Dubai?
Every business of every category must have a license to trade in Dubai. There are three categories of licenses Commercial, Professional and Industrial depending on your business activity.
Where are the free zones in Dubai?
The Dubai government established Tecom Investments FC LLC which launched Dubai Internet City in 2000. This remains a dedicated free zone area for the Information, Communication and Technologies sector and Dubai has now more than 20 Free Zones areas including Jebel Ali, Dubai Airport, DMCC located in JLT, Media & Knowledge City, Tecom, Silicon Oasis and Techno Park. All these areas are subject to their own FZ regulations and offer specific industry and mixed business licenses.
What are the benefits of starting a business in a free zone area?
100% foreign ownership of company
100% repatriation of capital and profits
100% free transfer of funds
100% exemption of import and export duties
Inexpensive workforce and easy recruitment procedures
Longer lease options
Are there any commercial business rules and regulations in Dubai?
Commercial Law, also known as Business Law and Corporate Law are the main bodies which govern business and commercial transactions in Dubai. In line with the countries vision and on par with international standards, the UAE offers a supportive and effective legal framework for businesses. The country has issued many initiative and platforms to encourage investment in the country.
Do I need a trade license before I look for a property for rent?
These almost need to be done simultaneously as you will need a business address to apply for and secure a trade license.
Can I get a commercial mortgage?
Finance is available for commercial property in the same way as residential, providing you meet the required criteria. There are certain lenders more willing to lend on commercial property and through our preferred partners.
As an overseas resident can I buy and rent out a commercial property as an investment?
You can own both commercial and residential property here in Dubai as an overseas investor. We can also offer property management services and be your Property Manager on the ground in Dubai for continued support and peace of mind during a tenancy or vacant periods.
What is the difference between an offshore license and other licenses?
An offshore company may own property or other assets in the UAE but may not partake in any business activities in the UAE. An on-shore company’s license permits the company to partake in the business activities listed on the license, within the area under the jurisdiction of the authority issuing the license.
Is it better to rent OR Buy commercial property in Dubai?
This depends on your business plan objectives. Renting a property would give you the flexibility of expansion, location and reducing liability. Purchasing your premises will protect you from rental increases, unexpected landlord demands and eviction. Your outlay of funds will be paying towards an asset instead of losing on the payable rent. These assets can also be rented out to a Tenant for potential income if required. All commercial sales and lease revenues are now subject to 5% VAT (effective from 1st January 2018).
What are the property management fees in Dubai?
The property management fee varies from 5% to 8% it depends on the property type.
What is Property Management?
Property management is a beginning to end service that looks after the property, owners, tenants, legal part is very important, tenancy contract and maintenance repairs to maximize revenue potential and maintain the investment.
What are the benefits of managing my property?
Provided you select a reputable and professional company the benefits can be vast. A priority for busy owners is the convenience of the service to assist with all the tenant enquiries and receive timely notifications of tenancy requirements and updates on the relevant laws.
Managed properties will take precedent and many Tenants prefer renting a property that is managed rather than direct Landlord contact. Assistance with third-party payments can also offer effective solutions to banking requirements. The inspections and maintenance services can be vital for non-local owners.
The knowledge, experience and contacts the property management companies have will be considerably more than an individual owner due to the company’s larger property portfolio and full-time business. An effective property management company will save you money in the short & long term.
How do I know if the company is licensed to perform property management?
All real estate activities in Dubai are governed by RERA (Real Estate Regulatory Agency) and in addition to a Trade License, a RERA certificate is required. Check the activity on the Trade License as they can vary depending on the type of business. For Management Companies with Real Estate supervision activity, they are not entitled to receive or collect rental cheques in favor of their companies.
What are the main factors to consider when selecting a management company?
Enquire into the business operations which includes their property portfolio (number of properties managed and which areas), office location and working hours. The staff experience and longevity are very important to build long-term connections and have the assurance of expertise and know the people you can rely on and contact. Customer feedback and testimonials should provide insight into their existing client ratings of their performance and service standards.
Should there be a management contract?
Yes, you should request and review the Management contract which should detail all the services including a number of inspections, both party responsibilities, all charges and applicable fees.
What about the marketing capabilities of the management company?
This is very important to have the confidence your property will be exposed effectively in the market to minimize periods of vacancy. Review their marketing strategy and do they network managed properties with other licensed reputable companies to further reach a wide audience of potential tenants.
Should the management company markup maintenance invoices?
Management companies may use their own contractors or outsource business to third parties however the main factor is to avoid any conflict of interest. If the management company is benefiting financially from maintenance works to your property, then a lack of comfort and confidence in the work requirements and cost could be problematic.
What about the cancellation of the management company?
The terms of the management contract should include termination notice and review any clauses regarding any paid fees or held funds.
Is the management company responsible to notify me of annual service charges?
Properties in Dubai all include annual services charges that are payable quarterly. This is for the upkeep of the communal areas within the building or community. Invoices for charges will be provided directly to the Landlord from the Developer/Owners Association. This information is confidential and late penalty fees can be applied if payment is not settled by the due date and therefore responsibility will remain with the owner.
What type of Rental Properties do you manage?
We manage all residential and commercial properties in Dubai.
What areas do you handle?
MHM Real Estate cover all of Dubai.
What will you do get my property rented?
We give your property maximum exposure, as we want to get it rented for you ASAP!
For Rent Signs
Employment/ Income Verification
Lease and all Addendum Preparations
Move-In Inspection and Report with Photos
What happens if the tenant does not pay their rent?
When we deposit the rental cheques in your account, we send you deposit slips, asking you to check the account. If the payment has been received, we update the tenant portal and landlord portal. If it’s bounced for whatever reason, we contact the tenant with the reason and immediately become our debt collector, by collecting the funds within 48 hours at the most, if the tenant didn’t pay within 48 hous then will report his cheque to Police (Provided that the owner granted us POA) and if he didn’t pay within 30 days then legal case will be opened against the tenant (Property management contract Terms and Conditions apply).
How do you handle maintenance requests?
The Tenant would highlight their maintenance request by sending us an email or Message, whats application on their phone, here they will be able to take a photo of the issue, or a small video of the issue, state when is best for us to arrive and access the situation, we follow the minor and major clause listed on the tenancy addendums.
How informed will I be about what happens with my property?
We will keep you up to date as much as possible, however remember the main aim of you taking our service is to sit back , relax and enjoy time with the family, we also call your tenant to ensure they are ok and enjoying their stay, if there are minor works with need to take place In the property audits charged to your tenants, we list this on file for record, the work has been completed, not having to bother you about the small issues, if there’s an major issue, with maintenance or anything else, we call you to immediately to keep you In the loop and seek your advice, offering you solutions, the final call is yours and we follow that through.