The large number of real estate investment opportunities in Dubai has made it essential to understand the legal setup. When you are involved in property transactions, a sales and purchase agreement (SPA) protects your interests, ensures compliance, and avoids potential disputes.
Here, we’ll guide you through the sales purchase agreement in Dubai, shedding light on its significance, components, and procedures.
- What is a Sales Purchase Agreement (SPA)?
- Understanding SPA Dubai: Key Elements & Requirements
- Understanding the Role of Dubai Land Department (DLD) in SPA Dubai Transactions
- The Drafting and Execution of A Sales Purchase Agreement in Dubai
- Tips for Buyers and Sellers To Make The Most of SPA Dubai
What is a Sales Purchase Agreement (SPA)?
In Dubai, a Sale and Purchase Agreement (SPA) is typically signed when buying off-plan properties. This agreement outlines the legal obligations of both the buyer and seller under UAE real estate laws. It acts as a road map for the whole deal, including the responsibilities of each party, the property’s cost, and the closing date.
Moreover, It’s recommended to carefully review and finalize the SPA after thoroughly inspecting the property.
A seamless and profitable real estate transaction requires you to understand the legal procedure to buy a property in Dubai.
Understanding SPA Dubai: Key Elements & Requirements
By ensuring everyone is aware of their responsibilities, the SPA helps reduce disagreements and miscommunications. That makes a well-written SPA necessary for protecting the interests of both buyers and sellers in Dubai’s competitive real estate market.
Here are the factors involved:
Parties Concerned
The SPA section details buyer and seller information, including names, addresses, and contact details, as well as corporate entity specifics.
Property Details
The SPA contains a thorough description of the property. This covers the plot number, location, size and any other relevant details. The developer’s name and project details are also included for off-plan property.
Buying off-plan property in the UAE offers opportunities for early investment in upcoming developments.
Purchase Price and Conditions of Payment
This section outlines the property’s purchase price and payment plan, including down payment, instalments and final payment, which are crucial for mutual agreement.
Conditions Precedent
Conditions precedent is an essential requirement, such as financing, permissions or due diligence, for the transaction to proceed.
Buyer-Seller Responsibilities
The Seller and Buyer’s responsibilities are outlined in the SPA and these include property conditions, payments, contract fulfilment and encumbrance-free transfer.
Completion and Handover
This outlines finalizing the deal, property transfer, completion date, transfer procedure and late fees.
Amenities and Facilities
Facilities and amenities promised by the developer post-completion should be included in the SPA contract.
Terms of Cancellation
When purchasing off-plan real estate, make sure the contract has reasonable cancellation policies for both parties.
Understanding the Role of Dubai Land Department (DLD) in SPA Dubai Transactions
The Dubai Land Department (DLD) helps maintain legal compliance and transparency in real estate transactions. Moreover, it registers all real estate transactions, including SPAs, which gives both parties involved legal status and protection.
How to Register a Sales and Purchase Agreement in Dubai
DLD provides a service to register sales and purchase transactions. Let’s go through the required documents, process and fees.
- Log into the Oqood portal.
- Select provisional sales registration and provide the following documents:
- A copy of the SPA contract in Dubai
- Valid Emirates ID or passport copy
- Companies may need to provide the power of attorney and Memorandum of Association
- Also, companies must provide No-objection certificate
- After that, pay the following fees:
- Seller’s fee of 2% of the property price
- Buyer’s fee of 2% of the property price
- Sales registration fees for developers: AED 1000
- Knowledge and Innovation Fees: AED 10 each
- After that, the purchaser will receive a provisional registration e-certificate
Service Terms and Conditions:
The sellers and purchasers must meet the following conditions:
- The sales and purchase agreements in Dubai must be signed by the developers and purchasers
- The registration must be done within 90 days of signing the SPA in Dubai
The Drafting and Execution of A Sales Purchase Agreement in Dubai
Drafting and executing a Sales Purchase Agreement (SPA) in Dubai is crucial in any real estate transaction. This guide will walk you through the essential elements and legal requirements to ensure a smooth and compliant process.
Initial Discussions
- Start with the buyer-seller conversations.
- Talk about the conditions precedent, payment plan, and price of the transaction.
- Involve legal experts to guarantee enforcement and fairness
SPA Drafting
- Once you meet the conditions, draft a clear and complete SPA agreement
- To ensure compliance with local regulations, drafting is usually handled by attorneys skilled in Dubai real estate law
- For expert advice on drafting a Sales Purchase Agreement, ask a lawyer for a sales purchase agreement in Dubai
Review and Approval
- The two parties review the draft SPA together to resolve any issues or confusion.
- After making the required changes, approve the updated SPA
Signing the SPA
- After final approval, the seller and the buyer sign the SPA
- Before signing, ensure all parties are aware of and agree with the conditions
- The SPA becomes legal after you sign
Payment and Handover
- After signing the SPA, the buyer pays the first installment according to the negotiated schedule
- The terms of the SPA apply to any further payments
- After all payments, the buyer receives ownership of the property
Property Registration
- Register your property with the Dubai Land Department (DLD)
- By officially registering the transaction, the seller and the buyer transfer ownership and ensure that the transaction is recognised by the legal system
Tips for Buyers and Sellers To Make The Most of SPA Dubai
Maximize your real estate transaction in Dubai with these essential tips for buyers and sellers:
For Buyers
- Make sure you have done your research about the seller and the property
- Get the SPA review by an experienced real estate attorney to ensure that all of the provisions are beneficial and in accordance with local laws
- Arrange for the necessary funds as per the payment schedule mentioned in the SPA
- Familiarise yourself with the state of the Dubai market
For Sellers
- Make sure there are no legal issues surrounding the property
- To prevent problems later, give precise information about the property
- Collaborate with a real estate representative or attorney to develop agreements safeguarding your rights
- Respect the deadlines and requirements outlined in the SPA to avoid penalties
FAQ
A purchase agreement is the final document used to transfer a property from the seller to the buyer officially. In contrast, a purchase and sale agreement details the transaction terms. The purchase agreement is signed once both parties meet the conditions outlined in the purchase and sale agreement.
The sales purchase agreement (SPA) is essential in real estate transactions in Dubai since it outlines the rights and duties of both parties. Deals go more smoothly and securely when you are aware of the agreement outlines.
Make sure to follow our step-by-step guide to buying a house in Dubai and work with a licensed professional agent to get the property registration the right way. That is the key to guaranteeing a smooth and informed real estate investment experience.
