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29 March 2024

Buying off-plan property in Dubai? Click for documents

Published
By Parag Deulgaonkar

Though a number of investors are buying off-plan properties in Dubai today, it is not like before.

A slew of measures have been introduced by Real Estate Regulatory Agency (Rera), the regulatory arm of Dubai Land Department (DLD), to ensure that developers complete their projects, while investors, on their part, are leaving no stone unturned. They are asking for official documents before putting that 10 to 20 per cent booking payment.

So what documents are investors asking for?

Developers say investors are these days asking for the following documents:

* Land title deed
* Escrow account number
* DLD approvals
* Agreement with the contractor

Niall McLoughlin, Senior Vice-President, Damac Properties, says:  “Dubai is taking the lead in creating a clear process for buyers and tenants to increase confidence in the market and make it easier for international clients to do business in the real estate sector.

“In recent years, Dubai Government authorities brought in strict regulations to make the property market one of the most regulated in the world, driving increased confidence from overseas investors.”

Samir Munshi, Managing Director, Orion Holdings, agrees to the fact that investors are seeking documents before investing in a particular project, and that they often ask for the escrow account number.

“Investors primarily ask for an escrow account number as it is a substantial proof of the project being launched with all approvals in place,” he says.

JLL, a global real estate consultancy, said on Sunday that Dubai is ranked 49th and Abu Dhabi 53th in a global transparency index of 102 global real estate markets.

“Dubai continues to benefit from the UAE’s status as one of the best regulated and open real estate markets in a still volatile region,” the consultancy revealed.

Project completion guaranteed


In order to ensure that the off-plan project is completed, Rera has introduced measures such as the developer having to pay 100 per cent for the land and make a down payment of 20 per cent as bank guarantee, or deposit 20 per cent in escrow account, or complete 20 per cent construction before selling off plan.

Apart from the above measures, Rera even asks contractors to submit a 10 per cent performance guarantee.

“In fact, there are rules in place now to have enough money to complete a project,” Munshi adds.

In June 2013, Marwan bin Ghalita, CEO, Rera, had said, “No project in Dubai was launched without a construction guarantee and developers have to guarantee that their project will be completed on time.”