Khaleej Times, 1 January, 2019
The total value of real estate transactions in the UAE fell by 16 per cent to Dh111 billion during the first half of 2018 due to a combination of oversupply and decreasing rental yields, according to a report by the Dubai Land Department. International real estate analyst S&P Global has said that the local property market is not expected to see a recovery until 2020.
The current state of the market has created an attractive space for buyers and sellers looking to take advantage while the cost of real estate in the UAE is still lower than it is expected to reach in the coming years.
A greater number of opportunities to buy real estate and a continuously expanding sector have emphasised the need for an awareness of the key considerations associated with buying or selling real estate in the Emirates, and, consequently, the need for these considerations to be identified with potential risks mitigated before a transaction takes place.
A UAE property transaction can take anywhere from eight days to eight weeks through to completion with numerous complexities and legal implications if not managed correctly. The potential risks to anyone involved in a real estate transaction can be significant should the services of a property conveyancing lawyer not be retained. Both parties will need to ensure they are thoroughly versed on the legal requirements of the transaction.
For example, an unapproved modification to the property made by the previous owner could alert the authorities and result in the sale being void, fines being imposed on the new owner or the modification having to be reverted to its original state at the expense of the new owner.
A conveyancer will ensure such items are checked and contracts are written to protect the interests of all parties and executed in accordance with UAE law. Inspections should be carried out in a timely manner and accurate information should be delivered to all parties involved.
Property conveyancing lawyers will also check the market credibility of all relevant parties to the transaction, including brokers, to ensure legitimacy and that they are registered with the relevant regulatory authorities. Ensuring all documentation is legal, making sure payment schedules are upheld, attaining appropriate no objection certificates and ensuring a bona fide change of title is achieved, constitute some of the key issues that must be addressed when a property is conveyed.
Your property conveyancer will also conduct a thorough analysis and inspection into the fundamentals of the asset, the buyer or seller, the financing and any compliance obligations, ensuring proper due diligence is carried out, thus mitigating any potential financial uncertainties. The level of due diligence will vary on the value of the project. The more money there is at stake, the more thorough the due diligence should be.
The number of enquiries from contacts abroad about investing in Dubai since the residency regulation announcement has been astonishing. As Dubai becomes more connected and invites foreign investment, we are likely to witness a continued boost to both supply and demand in the property sector. The transfer and settlement of a property title can be straightforward for foreign investors if the right legal partner is working on their behalf.
Certain factors such as the type of property and the area can influence the conditions of a settlement. As transactions of this nature are unpredictable, property conveyancing lawyers can act as an independent party, protecting the interests of the buyer or seller (as the case may be) and should have the experience and know-how to deal with challenging situations and provide a layer of protection if something does go wrong.