Tim Elliot
Now we’re recording this episode of Lawgical, discussing nominal ownership of property interests in the UAE. We’re also live on TikTok as we record. A couple of questions have come in, Ludmila. I’ll start with this one: I have an off-plan property. Is it possible for me to sell it before settlement in Dubai?
Ludmila Yamalova
Yes, it is. Selling off-plan property rights is a common practice in Dubai and has been a significant factor in attracting investors. However, there are certain conditions attached to this process.
To sell an off-plan property, you need an Oqood, which is the presale or preregistration document. Additionally, you’ll need approval from the developer, who may charge a fee for the transfer. This practice began during the height of property flipping in Dubai to regulate the process.
You must also ensure the 4% registration fee on the property’s total value has been paid to the Land Department. When transferring ownership, the new buyer will also need to pay 4% of the transaction value. Besides, the developer may impose their own transfer fee.
While selling off-plan property is possible, it must follow specific mechanisms through the authorities and requires the developer’s involvement.
Tim Elliot
Okay. Another question for you: What areas, and this is a broad one, can expats buy property in Dubai?
Ludmila Yamalova
There are many areas. Historically, only UAE nationals could own property. Over time, Dubai began designating certain areas as freehold zones where expats can buy property. This change was pivotal in boosting Dubai’s real estate market.
Freehold areas are legally codified through regulations and resolutions. Examples include Dubai Marina, Palm Jumeirah, Downtown Dubai, and Jumeirah Lakes Towers. It’s easier to list areas where expats cannot buy, as freehold zones have expanded significantly.
For instance, Jumeirah, despite being popular among expats for renting, is still restricted to UAE nationals for villa ownership. But outside such exceptions, expats can own properties in most designated freehold areas.
Tim Elliot
While we’re on TikTok, here’s another question: If I buy property on a loan under my friend’s name and I lose my job, would I still be liable for paying the remaining amount?
Ludmila Yamalova
No, you wouldn’t be legally liable for the loan since it’s in your friend’s name. The loan agreement, like the title deed, is legally binding on the person named in the contract. If your friend’s name is on the loan and mortgage documents, they are solely responsible for repaying the amount.
However, this arrangement poses significant risks. If your friend defaults, the bank could foreclose on the loan, and you could lose the property. Additionally, since the property is likely registered in your friend’s name, legally, it is their property, not yours.
While you may feel a moral obligation to your friend, the legal liability lies with them. This is a risky arrangement, and I would not recommend it as a common practice.
Tim Elliot
A nice friend to have if they stick by you. Here’s another question: If I buy a property as a gift for my fiancé and now we’re separated, is there a way to claim it back? By inference, the property is likely in their name.
Ludmila Yamalova
Great question. If the property is in your fiancé’s name, it legally belongs to them. Gifts, by nature, are challenging to undo.
To reclaim the property or funds, you would need evidence showing the transfer was conditional or not a true gift. For example, if there are messages or documents indicating an agreement that the property would be returned in case of separation, you might have grounds to challenge it.
However, courts generally treat gifts as final unless there’s strong evidence to the contrary. Managing expectations is important here—it’s unlikely you’d get the property back, though partial reimbursement might be possible under certain circumstances.
Tim Elliot
One more question for you: Can I sell a property that was under my late father’s name? He intended to gift it to me but passed away before transferring ownership.
Ludmila Yamalova
No, you cannot sell the property until the probate process is completed and ownership is officially transferred to you.
When someone passes away, their property becomes part of their estate. The property’s ownership must be resolved through a court-supervised probate process, which includes obtaining a court order to distribute the estate.
Even if your father expressed his intention to gift the property to you, it must be legally registered in your name in the land registry before you can sell it. Until then, it remains under his name, and no transactions can be made.