Provided by Equilibrium Legal Consultants
Property development is one of the most lucrative businesses in UAE. Due to the influx of foreigners, demand for real estate properties is ever increasing. The UAE government has introduced new rules for developers, in order to secure the investors purchasing properties in UAE. All Developers are now required to be registered with the Dubai Lands Department, subsequent to which, escrow or trust accounts are required to be established with authorized banks of UAE.
Property development is one of the most lucrative businesses in the United Arab Emirates. Due to the influx of expatriates and big time businessmen, the demand for real estate properties has become the rule of the thumb in the business industry. Although foreigners are prohibited to own land in UAE as the right to acquire and dispose of the same belongs exclusively to UAE and GCC nationals, the government has designated certain areas within UAE as freehold property areas, where expatriates are granted the privilege to own properties by means of a freehold interest and/or a long lease of up to 99 years.
In Dubai as in other Emirates, government recognized Master Developers retain perpetual ownership of land and transfer a freehold interest to other Development Companies or Individuals, who are permitted to build, develop and construct properties on the said land, following with sale of the said properties to end purchasers or third parties.
To validly engage in the business of property development in Dubai, one must first register itself as a licensed Developer with the Dubai Lands Department (DLD). For companies applying for such registration, it is mandatory that the corporate documents of such companies must include the authorization from the licensing authority, to carry on development activity. Registration as a Developer with the DLD entails submission of pertinent documents provided by the DLD which documents may be best prepared and presented by lawyers or legal consultants who have thorough understanding and ample knowledge of UAE Laws. Once registered with the DLD, the Developer is required to acquire a No Objection Certificate (NOC) from the Master Developer of the relevant project, permitting the Developer to commence with the Project sale. The NOC is then required to be submitted to DLD for the issuance of a letter from DLD, permitting the Developer to open an escrow account with any of the approved banks and financial institute in UAE. This mandatory establishment of escrow account is the government’s move to secure the money of investors who invest in real estate developments in Dubai.
At present, DLD does not charge any fee for registration of Developers, although is possible that the department may impose a fee in the near future. Presently, the only requirement for the registration formality is the submission of the necessary documents to DLD. Dubai Lands Department has a supportive and cooperative staff who readily assist the Developers with the entire registration process. For each new project undertaken by a Developer, a new Escrow Account is required to be established. In an event where a registered Developer undertakes a new Project, such Developer would only be required to submit the new Project’s details ( including the NOC from the Master Developer) whereupon, following six working days, the permission to open a new escrow account shall be granted to the Developer.
Registration with DLD is compulsory, as no developer is legally permitted to carry out property development business in Dubai, unless registered in the DLD. Violators of this requirement risk being incarcerated and fined as prescribed by the government.
One of the pioneer law firms who help facilitate in the registration of Property Developers with the Dubai Lands Department is EQUILIBRIUM LEGAL CONSULTANTS. The firm provides accurate consultation and has always guaranteed their clients success in their application for registration with Dubai Lands Department.
