Buyer's Purchase Obligation in the UAE Secondary Real Estate Market - Blythe & Company

While the off-plan market seem to be booming based on the attractive payment plan attributions and endless opportunities of discovering new areas within the UAE. The secondary market still remains desirable among most buyers given the level of certainty that comes with purchasing a tangible property that can provide real projection of returns. Although, there seem to be some ambiguities over buyer’s obligations with respect to making these purchases, in fact a lot of buyers find out about a couple of charges close to the date of property transfer which usually has not been factored into the original budget or communicated by the relevant party.

The lump sum is usually the purchase price of the property, however, the fees that seem minuscle or insignificant tend to add up at the the end of the entire process. The last thing anyone need is to be house poor once the transaction is completed. Having a visibility into these hidden costs allows for effective planning and ensure buyers set the appropriate budget for their home purchase.

Imagine a buyer with a budget of AED500,000 for a studio, in reality, the budget should be approximately AED530,000 based on the additional cost that will be incurred at the point of property transfer.

Below are the factors to consider as part of the buyer’s obligation when purchasing a home in the secondary market to suuceesfully complete the property transfer process:

  1. Once your offer has been accepted by the seller, you are required to have a manager’s cheque drawn up in the seller’s name, which is to be held by the licensed trustee or the brokerage company. The brokerage company will then ensure that both parties complete the Memorandum of Understanding (MOU) otherwise called Form F, once this has been executed by both parties, the seller will delist the property and the terms of the agreement will govern the sale.
  2. The next step will be for you to request for the No Objection Certificate (NOC) from the seller. The NOC is usually requested by the seller from the developer of the property, this document ensures that there are no outstanding charges or pending utility bills on the property.
  3. Once you have the NOC, you and the seller will then go to the Dubai Land Department or one of the licensed trusties for the property transfer. Now this is where all the additional charges come in. You are required to come the following:
    • The 100% property purchase fee payable in Manager’s check/Bank draft. If you are a mortgage buyer, you are required to have 25% of the purchase price and the bank will have a manager’s cheque for the remaining 75% for the seller.
    • Dubai Land Department fees which is 4% of the property value: If your property cost AED500,000 you will be required to have a cheque of AED20,000
    •  Issuance of Title Deed fee which is a flat fee of AED 520
    • Dubai Land department administrative fees which is AED 4,200
    • Physical identification documents which could either be your passport or Emirates ID (if you are a resident)
    • The No objection Certificate received from the developer
    • The signed Memorandum of Understanding (Form F)
  4. Then once all the above have been submitted to the DLD, the property will be transferred and you can then shake the seller’s hand. You will be issued the new Title Deed and you may then register with the developer and the utility provider as the landlord. Congratulations! This whole process could get concluded within an hour.

Using the AED500,000 scenario, we can see that the total amount of money the buyer is parting with is already AED524,700 which is a significant addition to the initial cost. There could also have been some other charges related to the bank valuation, mortgage approvals and bank administrative charges. Given those charges vary from bank to bank and also depending on the buyers existing relationship with the bank we are unable to opine on that aspect.

In addition, a major factor to note with respect to the agreements is, the Memorandum of Understanding (MOU) is only valid for 60 days before it becomes invalid and the seller takes the 10% deposit for the time wasted. So, if you are a mortgage buyer, it is advisable that you have your mortgage pre-approvals obtained prior to making an offer to evade any consequences that may result from not meeting the contract deadline.

How can we help

Blythe & Company has a wealth of experience in the UAE real estate sector, our team is well versed in finding the right property to suit your investment profile. We will hold your hand through every phase of the purchase process. To learn more, please reach out to us at

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Copyright by Blythe and Company. All rights reserved.