Securing a property purchase in Dubai: what to check before you sign

The escrow account: the central protection

Dubai's Law No. 8 of 2007 requires that sums paid by buyers of an off-plan project be deposited into an escrow account opened in the name of the project with an approved institution. Funds are released to the developer only as construction progresses, as certified by an engineer. The developer must also demonstrate a commitment of its own (a deposit of a portion of the estimated construction cost, or an equivalent bank guarantee) before being authorised to market the project.

Registration: DLD, RERA and Oqood

Every off-plan project must be registered with the Dubai Land Department and linked to a RERA-approved escrow account before any marketing. The off-plan purchase contract must be recorded on the interim Oqood register: failure to register in the interim register renders the off-plan sale void (Dubai Law No. 13 of 2008, art. 3); final ownership is then evidenced by the title deed issued by the DLD on handover. The acquisition must be located in a designated area open to full foreign ownership (designated areas, Dubai Law No. 7 of 2006, art. 4).

Points to check before signing

• The developer: seniority, delivered projects, adherence to timelines, financial standing;
• The reservation contract and the SPA (Sale and Purchase Agreement): payment schedule, delay penalties on the developer's side, termination and refund conditions;
• Title and Oqood: effective registration, absence of encumbrances;
• Charges (service charges) and ancillary costs (DLD fees, commission);
• Financing and its interaction with your French obligations.

The lawyer's role: independent review, not conveyancing

GEOTAX does not act as an agent, developer or Emirati notary: the firm reviews your file before you commit, identifies the points requiring attention, articulates the transaction with your French tax situation (IFI, residence, filings) and, where needed, directs you to trusted local counterparts. Your interest remains the only compass.

The purchase, step by step (secondary market)

On the resale market, a Dubai transaction follows a codified sequence. Each step has its own document — and its own fee.

1. Offer and negotiation. Usually through a RERA-registered agent; the commission customarily amounts to around 2% of the price, per the brokerage agreement.
2. MOU — Form F. The agreed terms (price, timeline, conditions) are recorded in the RERA standard contract known as Form F, signed by both parties; a deposit is customarily lodged with the registered broker at this stage, on contractual terms.
3. Developer NOC. The seller applies to the developer for a no-objection certificate confirming, in particular, that no service charges remain outstanding; the fee is set by each developer.
4. Transfer before a DLD-approved trustee. The parties complete the transfer at a registration trustee office: payment of the price, DLD transfer fee of 4% (legally split 2% seller / 2% buyer, but in practice contractually borne by the buyer), trustee fee of AED 4,000 + VAT (AED 2,000 + VAT below AED 500,000), and issuance of the new title deed in the buyer's name. Where the purchase is financed, the bank intervenes at this stage and mortgage registration follows the DLD schedule in force.
5. Post-completion. Utilities transfer, service-charge account and — if the property is let — registration of the tenancy.

Fees at a glance

These amounts follow the official schedules and market practice as at the date of this page; they must be confirmed with the DLD and the professionals involved at the date of the transaction.

Off-plan: the red flags

• Escrow account. Verify that the project has its own escrow account under Law No. 8 of 2007 — and pay only into that account, never to an unrelated recipient.
• Payment milestones. Beware of schedules disconnected from actual construction progress: the protective logic of the escrow regime is payment against progress.
• Delay and termination clauses. Scrutinise the developer's delay penalties, your termination rights and the refund mechanics in the SPA.
• Oqood registration. An off-plan sale not recorded on the interim register is void (Dubai Law No. 13 of 2008, art. 3): require evidence of registration.
• Resale (assignment) restrictions. Selling the contract before handover is typically subject to the developer's consent and to conditions set in the SPA: read them before signing, not when you want to exit.

Title due diligence

• Title deed: consistency with DLD records, identity of the registered owner;
• Location: the property must lie in a designated area open to full foreign ownership (Dubai Law No. 7 of 2006, art. 4);
• Charges and encumbrances: registered mortgages or restrictions, to be cleared before or at transfer;
• Service charges: arrears — the developer NOC is the checkpoint — and the level of recurring charges;
• Occupancy: any existing tenancy and its terms, which the buyer inherits.

The paper trail: documents to collect and keep

A secure transaction leaves a complete file. At each stage, collect and archive:

• the brokerage agreement and the signed Form F, with proof of the deposit;
• the developer NOC and the service-charge statements it relies on;
• the payment evidence (manager's cheques, transfer confirmations) and the trustee's receipts for the DLD fee and trustee fee;
• the new title deed and, for off-plan, the SPA and evidence of Oqood registration;
• any mortgage documentation where the purchase is financed.

For a French tax resident, this file is not mere housekeeping: it feeds the French ledger — form 3916 if a UAE bank account is opened for the operation (in a CRS environment), the valuation supporting the IFI return, and, years later, the computation of the resale capital gain. What is archived at completion is what will be defensible in an audit.

One transaction layer, whatever your passport

Everything above — Form F, NOC, escrow, Oqood, DLD transfer — is universal: the Dubai transaction layer is the same for a French, British, American or any other buyer. What differs radically is the tax layer, which depends on your residence and citizenship. French residents will find that layer throughout this silo (IFI, rental income, capital gains); UK residents and US persons should start with the dedicated pages UK residents moving to the UAE and US persons moving to the UAE.

Common mistakes

• Paying outside the escrow account on an off-plan project: the protection of Law No. 8 of 2007 attaches to the project account, not to the developer's goodwill.
• Signing Form F without reading the exit clauses — deposit forfeiture and termination terms are contractual and bind you from signature.
• Discovering service-charge arrears at NOC stage, when they should have been priced into the negotiation.
• Ignoring the assignment clause of an off-plan SPA, then finding the resale before handover blocked or costly.
• Treating the purchase as tax-free by nature: the Dubai transaction may be, but the buyer's home-country ledger (French IFI, filings, future capital gain — or the UK and US equivalents) opens on day one.

Frequently asked questions