The new Dubai property law has fuelled a resurgence of interest in the property market in Dubai. Foreign buyers once hesitant to commit to a marketplace where an element of doubt remained about their legal right to own freehold real estate, are now buying up property in lightning speed.
International banks and house loan financiers are making it easier to borrow for a property transaction in the UAE and Dubai is high on the property wish list of all and sundry from international celebs to industry icons, from Arabs to Asian expats.
This means that it’s high time to draw up a list of the dos and don’ts of buying property in Dubai to prevent mistakes that can prove costly. Dubai is known for its transparent open-market policies, but it’s always safe to enter into a property purchase with the support of a competent and safe lawyer.
There are a series of complexities associated with the purchase of a property whether that property is off plan, completed or resale…money should not change hands and contracts should not be signed before the purchaser has sought independent legal advice.
When it comes to the signing of any contract and the acceptance of any terms, conditions and assignments it’s imperative that the purchaser reads, understands and accepts not only the obligations that the builder/developer/reseller/agents are committing to, but all the terms and conditions that the person buying property in Dubai has to agree to.
These include getting insurances in place before completion, accepting that title deeds can be assigned to someone else nominated, if permission to purchase is not granted to the not take a little initial buyer etc.
If a buyer does not give time and make effort to ensure they know what they are committing to, then there are chances that they will face problems further down the line.
Not all builders and developers in Dubai have the same reputation and not all build to expected standards. Enough property has been completed in Dubai by the majority of large constructors for those looking for an investment property in Dubai or a second home in the UAE to have examples of completed work to look at.
Try and get as good and broad a perspective of a developer before committing to purchase from one of their off plan projects – while this is not an exact science as standards can change, it is as good a basis for making a decision as any!
The terms and conditions that mortgage lenders enforce vary from lender to lender and country to country. Many think that by entering into a mortgage contract they ‘only’ run the risk of losing the home on which the mortgage is based if they default – this is not always the case. Often the larger the financial institution the less scrupulous and customer caring they are too!
Don’t get your fingers burned – read, understand and seriously think about any financial contract you sign – it could be that if you default and your home is repossessed, you still end up with a bill for charges, lost interest, the difference between the debt and what they sell your home for.
There is no such thing as a sympathetic bank, a kind lender or a generous financial institution – the sooner you come to KNOW that the better off you will be in life! Dubai mortgage lenders are no exception to this rule by the way – look after yourself and your own best interests, do not trust a bank, estate agent or property developer to do so!
Think about what could happen to your dream home in Dubai when you die – sorry – grim topic but an essential one to consider when you bear in mind that the laws of succession differ from country to country and are affected by many issues such as whether you still have finance outstanding on the real estate etc.
Make a will but also consider the option of owning property through a company structure or if appropriate to your circumstances, using an offshore trust for the ownership of any property assets purchased outside your country of domicile.
And finally, there is no such thing as a zero-risk investment. While some believe putting money into property as an asset class is the closest thing you can get to risk free investing, that is most certainly not the case.
Dubai is still an emerging market that has not been tried and tested, that has never had to suffer economic, social or political change on a large and significant scale and where no investor, market analyst or expert can predict future growth patterns. While property prices and rental yields are continuing to rise at the moment, the trend might not last for ever.
Source : Editor, GoDubai.com
Posted : 01/June/2008