When buying off-plan property in Dubai, get a good lawyer

Gulf News

See more videos at https://gulfnews.com/videos  Read more Gulf News stories here: https://bit.ly/2HLJ2km  Elaine Jones, founder of Asteco, shares practical tips when buying a home in Dubai in this edition of Gulf News Property Weekly's Real Estate Market Talks  #GulfNews #property #realestate #business

Transcript

00:00If you are planning to buy property in Dubai, be a local investor or an international one,

00:07there are a few things you need to know.

00:09Elaine, welcome.

00:13Well, for investors who are planning to buy off plan, what would your first advice or

00:23tip be for them?

00:25If you are planning to invest in property in Dubai, then what is the criteria against

00:30which you are investing?

00:32If you are buying because you are going to be an owner-occupier, there will be a very

00:35different set of pre-qualifications that you will address to make sure the property suits

00:41you.

00:42If you are buying as an investor, perhaps now we would be looking more closely at numbers,

00:49how much property is being released into the market, do we see capital growth, what do

00:54we see the trends with regards to rental income.

00:57So buying property off plan, whilst the payment terms can be and appear very attractive, the

01:03amount of due diligence that's needed is far greater than buying a property that's actually

01:08completed.

01:09Do I go to banks?

01:11Is that the place who do the due diligence?

01:13Are there evaluation companies who do it?

01:15I would propose that you would use a lawyer who will make sure that the paperwork is in

01:20order.

01:21The paperwork will come to our ownership documentation, proving that the person who is selling the

01:26property to you is indeed the seller, ensuring that the property through the NOC from the

01:32master developer will confirm that the property that you have been presented with is actually

01:37fully approved, the paperwork is all in order, asking the homeowners association, can you

01:44please tell us what the debt situation is, are there any outstanding debts, is there

01:49something to be concerned about, what is the status of the homeowners association.

01:55So they're very basic things, then you go to the wider circle and have someone, maybe

02:01it would be a property valuation company, to actually give you a great insight into

02:06what else is already built, going to be built, what are the change in dynamics in that neighbouring

02:12area.

02:14And the amount of due diligence that has been done here over the past few years has been

02:17shockingly little, but I think that people have now woken up to the fact, no, we have

02:22to do proper study to understand what is the viability and success of my investment, but

02:28already we are way ahead of where we were in 2002, 3, 4, 5 when we were selling previously.

02:35Yes, because the accrued system is in place, the escrow is in place and the title deed

02:40owner receives a unit site plan as well.

02:43Exactly, so we're a long way ahead and if we consider that actually all this has happened

02:48in about 15, 16 years, we've come a long way and the issue is here, that because we are

02:55a new country, that actually Dubai municipality, the master developers in Dubai lands department

03:02have got exceptional records of everything that is built, the sites allocated, unlike

03:10more mature countries or markets where you find that people come out of the woodwork

03:16some years later claiming that they own the property or they own the road, so at least

03:22we don't have all that.

03:23It's pre-set.

03:24We're actually lucky from that standpoint, it's a much cleaner industry in knowing who

03:30owns what and where precisely that property is.

03:34Residents are now kind of interested to put in their homes on short term rent, but would

03:40you advise them, how would you advise them to look at the other sides and the loopholes

03:45and to have their checks and balances in place?

03:48Short term rental will depend on, now are we talking about an individual villa somewhere

03:53or are we looking at a building because when you buy your property, the jointly owned property

03:59declaration will make it quite clear as to whether you are allowed to sell that property

04:04for short term rental or if you're allowed to operate it as short term rental and you'll

04:08find that in most of the more private communities, it's just not permitted and that comes down

04:17to security and let's not forget, one of the most valuable parts of living here is the

04:24high level of security, it is so important to us.

04:27So when properties are rent out on a short term basis, the due diligence on who is that

04:32person and I accept and acknowledge that people's passports do have to be sent through to the

04:37police within 15 minutes of checking in, great, but also for the neighbours, imagine there's

04:4525 of us living in a road, we know 20 of the families, they're there all the time and then

04:51five houses have got people that we don't know who just sort of pitch up and are there

04:56for a week or two, it impacts the whole thing and in buildings, it's the same.

05:02So if you have an interest in short term furnished rental, I would recommend that you buy in

05:06a purpose built short term rental opportunity where you can buy a hotel room or a suite

05:13or a furnished apartment that is managed on the basis that that's for a short term rental

05:18opportunity.

05:19Okay, so instead of having a villa in a community given for short term, it's better to have

05:24probably these short term...

05:26They're buildings, so you can have particular locations that are designated, that have complied

05:32with DTCM, the police, fire life and safety, all those things and it's operated all over

05:40the world, it's all done on the internet when it comes to the booking and occupancy, but

05:45all these things have consequences, so if you're going to do short term furnished, you

05:49buy in a project that is designated for short term rental, go with it.

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