Real estate investors find numerous lucrative opportunities in Dubai and Abu Dhabi, thanks to their advanced infrastructure, business opportunities, and secure environments. Both emirates offer attractive prospects for those looking to buy their dream home, with banks providing Property Mortgages in UAE to facilitate such investments. However, the mortgage processes in Dubai and Abu Dhabi differ significantly. This article explores these differences, focusing on property ownership, registration procedures, and mortgage laws in both emirates.
Property Ownership and Registration in Dubai
Who Can Own Property?
In Dubai, UAE and GCC nationals, as well as companies owned by nationals, can own real estate properties in any area. Foreigners and expatriate residents can only buy property in specific freehold areas. These areas include Dubai Marina, Palm Jumeirah, Dubai Sports City, and Business Bay.
Registration with Dubai Land Department (DLD)
Title Deed Issuance: The Dubai Land Department (DLD) is responsible for issuing title deeds, which serve as proof of property ownership.
Interim Property Register: Properties must be registered with the DLD, including off-plan properties, to be considered valid. Failure to register can render the property void.
Mortgage Laws in Dubai
Under Dubai Law No. 14 of 2008, only licensed banks, companies, and financial institutions registered with the UAE Central Bank can provide home mortgages. The mortgagor must be the property’s owner. If the mortgagor fails to pay the debt, the lender must give a 30-day notice through the Notary Public before starting execution proceedings. If unpaid, the court can order the property to be sold via public auction.
Obtaining mortgage pre-approval can simplify the property buying process. Many banks in Dubai offer competitive mortgage loan packages, making it easier for buyers to choose suitable options.
Property Ownership and Registration in Abu Dhabi
Ownership Restrictions for Expats
Expats in Abu Dhabi can only own property in the form of floors and apartments in designated investment areas. They are not permitted to own land. Popular freehold areas include Yas Island, Saadiyat Island, Al Reef, and Reem Island.
Non-UAE nationals must register their mortgage with the Department of Economic Development for it to be valid and enforceable. Plus, Expats must have been employed for at least six months or have an established business for two years to qualify for a mortgage. If you are an expat, reach out to Dubai legal consultants to help you out.
Mortgage Laws in Abu Dhabi
For properties worth up to AED 5 million, expats must make a down payment of 20-25%. For properties valued above AED 5 million, the down payment increases to 35%. Also, Under Article 41 of the Abu Dhabi property laws, the mortgage transfers to the insurance or compensation amount if the mortgaged property is lost or damaged.
Unlike Dubai, Abu Dhabi does not have a specific mortgage law, and the UAE Civil Code applies. Mortgage registration can only be effected over freehold properties owned by UAE and GCC nationals. For properties in investment zones, mortgages are registered with the property developer, offering lenders only contractual rights.
Conclusion
Mortgages in the UAE are generally robust, especially in Dubai, which has a well-developed property registration system. However, the legal landscape in Abu Dhabi presents more challenges due to evolving regulatory mechanisms. Understanding the differences in mortgage laws and registration procedures between Dubai and Abu Dhabi is crucial for real estate investors and homebuyers to make informed decisions and avoid potential legal pitfalls. For further guidance reach out to top law firms or Lawyers in Dubai.