Dubai Real Estate FAQ

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An escrow account is a crucial safety mechanism for off plan buyers in Dubai. The real estate laws mandate that developers must deposit investors money into a regulated third party escrow account rather than their own company accounts. These funds can only be accessed for construction purposes of that specific project as verified by the project consultant. This protects the buyer's capital and ensures that the money is strictly used to build the development.

Jointly Owned Real Property refers to any building, including its parts and appurtenances, that is allocated for common use. This definition also covers the land on which the building is constructed. Additionally, it includes land that is subdivided into units or plots intended for individual ownership. Understanding this classification is vital as it dictates how shared spaces like lobbies and elevators are managed. It ensures that individual owners understand their shared rights and responsibilities regarding the maintenance of common areas and facilities.

RERA imposes some of its heaviest administrative penalties on developers who offer units in fraudulent real property projects for sale. A developer found committing this violation faces a fine of AED 500,000. This same fine applies to other serious financial crimes, such as embezzling or misappropriating cash payments intended for constructing real property projects. These high fines serve as a critical deterrent to protect the integrity of the real estate market and the safety of investors.

An Escrow Account is a specific bank account opened for a real property development project where payments from off-plan purchasers or project financers are deposited. These funds are exclusively dedicated to the construction and implementation of that specific project and cannot be attached by the developer�s creditors. This system protects investors by ensuring that their money is only used for the project they invested in, with disbursements monitored by an Escrow Agent and audited by RERA.

A Unit is defined as any flat, shop, office, warehouse, or whole floor that forms part of a Jointly Owned Real Property. This can also include townhouses, independent houses, or designated parts of a land plot. Every Unit is intended for individual ownership and can be used for residential, commercial, or industrial purposes. The boundaries of these Units are clearly delineated on a Site Plan approved by the DLD. This clear definition ensures that every owner has legally protected rights over their specific private space.

An Owner is any person registered in the Real Property Register as the owner of a Unit. This definition includes holders of usufruct or long-term lease rights as per the law. Furthermore, a Developer is considered an Owner in respect of any unsold units in a project. Being an Owner grants an undivided interest in the Common Parts of the building. This interest is determined based on the ratio of the Unit's area to the total area of the Jointly Owned Real Property.

Service Charges are annual fees collected from owners to cover the management, operation, and repair of Jointly Owned Real Property. These charges fund essential services such as security, cleaning, and maintenance of Common Parts like elevators. Each owner�s share is calculated based on the ratio of their unit area to the total area of the property. These charges must be approved by RERA before they can be collected. Failure to pay these charges can result in a legal lien being placed on the unit.

The Real Estate Regulatory Agency (RERA) aims to develop the real estate sector through an integrated regulatory framework. Its goals include providing a safe and supportive environment for development projects to protect the rights of investors and developers. RERA also promotes the role of UAE nationals in the sector through training and empowerment programs. Furthermore, it establishes a professional code of conduct for all real estate activities. These objectives ensure that Dubai remains a premier destination for global real estate innovation and trust.

The Real Property Register is an official set of documents maintained by the DLD in paper or electronic format. It records all real property rights and any variations or amendments to those rights. This register has conclusive evidentiary value against all persons, providing legal certainty for ownership. Data in this register can only be challenged on the grounds of fraud or forgery. All dispositions that create, transfer, or change property rights must be recorded here to be legally effective in the Emirate.

An Escrow Account is a dedicated bank account for a real property development project. Payments from off-plan purchasers or project financers are deposited into this account to ensure project security. These funds are exclusively used for constructing the specific project and cannot be attached by the developer's creditors. This system is a vital protective measure for investors, ensuring their money is spent only on the actual implementation of the property they purchased. RERA audits these accounts to monitor revenues and expenditures regularly.

A Landlord can seek eviction upon lease expiry if they wish to retake possession for personal use or for their first-degree relatives. Under Law No. (33) of 2008, the Landlord must prove that they do not own an alternative suitable property for this purpose. Furthermore, the Landlord must provide the Tenant with a twelve (12) month written notice served via Notary Public or registered mail. This balancing act protects the Landlord's ownership rights while ensuring the Tenant is not suddenly homeless.

A Landlord is a natural or legal person entitled by law or agreement to dispose of a property. This definition includes the owner of the property, their legal representative, or an agent. It also encompasses a tenant who has been granted permission by the owner to sublet the property. Landlords are legally responsible for handing over the property in a good, usable condition and performing necessary maintenance. They are also the party entitled to receive rent as specified in a written lease contract.

A Tenant is a natural or legal person entitled to use a property pursuant to a written lease contract. This also includes anyone to whom the lease has been legally transferred from the original tenant. Tenants are obligated to pay rent on agreed dates and maintain the property in a good condition. They may not make significant changes or restorations to the property without the landlord�s written permission. At the end of the lease, they must return the property in the same condition they received it.

Rent is the specific consideration that a tenant is bound to pay according to a lease contract for the use of a property. The rent amount and payment method must be clearly specified in the written agreement. Unless otherwise agreed, rent typically covers the use of building facilities like swimming pools and car parks. If the parties fail to specify the amount, the rent is determined based on the rental value of similar properties. RERA establishes criteria for any rent increases based on the economic situation.

A Lease Contract is a written agreement where a landlord allows a tenant to use a property for a specific purpose and term in return for rent. This contract must include a clear description of the property, the owner's name, and the property's location. All lease contracts and their amendments must be registered with RERA to be legally recognized. Registration is a prerequisite for any judicial authority or government department to consider disputes or claims related to the tenancy. This system provides a transparent framework for landlord-tenant relationships.

The RDSC is a specialized judicial system in Dubai established to hear and determine rental disputes. Its objective is to realize social and economic stability by providing an expeditious and simple process for resolving conflicts between landlords and tenants. The RDSC has exclusive jurisdiction over rental disputes across the Emirate, including those in free zones. It comprises various divisions, including a Mediation and Conciliation Directorate to settle disputes amicably. Judgments issued by its Appellate Division are final and enforced through the Judgment Enforcement Directorate.

The Dubai Land Department (DLD) maintains a special register for jointly owned properties containing vital data for transparency. This includes details of land plots owned by developers, names of unit owners, and specific details regarding Owners Committees. Additionally, the register stores Building Management Regulations, master plans, and site plans. It also documents the contracts for management entities and a comprehensive statement of the total area of both Common Parts and Designated Common Parts, alongside their ratio to the total area of units within the property.

Unless the Site Plan says otherwise, a Unit includes floors down to the base of the joists and plaster ceilings. It encompasses the internal area, non-support internal walls, and the surrounding walls of the unit. Fixtures like windows, glass, lighting systems, and door frames are also part of the unit. Additionally, integral parts like bathrooms, balconies, and allocated car parks or storage rooms are included. However, a unit does not include utility services that pass through it to serve the common parts or other units.

Under Law No. (6) of 2019, car parks allocated to a specific unit are deemed an integral part of that unit. This means they cannot be separated, sold independently, or disposed of without the unit itself. Developers are legally required to register units and their designated parking spaces in the names of the respective owners. A unit may not be legally sold or disposed of in the Real Property Register unless the car parks designated to it are included in the transaction.