To attract the small investors Dubai Land Department (DLD) is set to implement a ‘fractional title deed’ in a bidding concept across the emirate.

The main aim for this deed is to attract investment into hotel or serviced apartment projects in Dubai and this is announced by the DLD’s Registration and Service Sector.

A fractional title deed refers to the division of the same unit into two or four fractional shares, each having its own title deed that may be sold, mortgaged, or transferred as would any other property.

Working of a fractional title deed

A fractional title deed effectively divides what would normally be in one unit (held via a single deed) into two or four parts.  half or a quarter of the unit is purchased by the investor. Each part or fraction of the unit will be held via its own title deed that may be dealt with or disposed of, i.e., mortgaged or sold, as would be the case with any other deed.

The title fractional deed has similar appearance unlike that of “timeshare”, which usually involves the multiple investors buying “time” in a property, wherein opposing to the actual real estate. Moreover, the owner has the right to occupation for a specified period of time in any year.

By investing a smaller amount into the property, this concept of ownership gives opportunity to the small investors to become co-owners. Specifically, the fractional ownership scheme is most relevant to the hotel-apartment sectors. DLD spokesperson stated that a fractional title deed may be registered under anyone’s name However, there won’t be any restrictions towards any target market.

The new center for dispute settlement between parties will be led by qualified real estate conciliators.

Judicial authorities exclaimed, to reduce the number of cases brought in the courts, the real estate disputes resolution center has decided to setup a new center in Abu Dhabi.

As per the agreement signed between Abu Dhabi Judicial Department (ADJD) and the Department of Municipalities and Transport (DMT) the center will soon be in movement.

The Real Estate Dispute Settlement Centre will comprise qualified real estate conciliators who will work to settle disputes between parties amicably. This in turn will help manage the influx of real estate dispute cases in courts. 

Abdullah Al Sahi, Acting Undersecretary of the DMT said.” The group of conciliators have undergone specialized courses to carry out their conciliation and reconciliation duties,”

Youssef Saeed Al-Abri, Undersecretary of the Judicial Department, said, “It is meant to be an important step in support of the efforts made to enable the amicable settlement of disputes to foster reconciliation between litigants and encourage amicable settlement of disputes as part of the initiatives of ongoing development of the judicial system and support for business competitiveness in the emirate.”

to improve the real estate and investment environment of Abu Dhabi, this initiative is among the priorities of the DMT. Therefore, this decision will help to promote the real estate dynamics and reduce the number of cases brought before the courts.

When it comes to purchase a property in UAE, both buyer and purchaser have specific entity on legal structure called as Sale and Purchase Agreement commonly known as SPA in UAE.A well drafted SPA is required in order to finalize any deal, whether movable or immovable property or asset.

SPA is the most important document the parties must have for smooth transaction of property matters and is considered to be the legal document to resolve any disputes.  It is always advised by Real Estate Lawyers to carefully review the contents of the SPA before signing it or parties must seek legal assistance. Moreover, Dubai has issued certain laws such as Law Number 7 of 2013 establishing the Dubai Land Department, Law Number 9 of 2009 governing the interim property register, Law Number 8 of 2007 on the Escrow account to be maintained by Developers. Her are foreign laws which helps safeguard buyers’ rights .no matter how many regulations are implied in the agreements but all comes into effect when there is a breach of contract. As buyers are always in a hurry for signing the SPA without considering their material of the agreement. Thus, it is advised to all our readers to thoroughly review the terms of the agreement or at least carefully look into the following issues before signing the SPA:

1. Reviewing developers’ license:

The prime most important thing is to know whether the developer is registered with the Dubai Land Department. Thus, Department of Land, Dubai has provided a list of developers registered with them, through which one can ascertain if the developer is holding valid licenses and simultaneously registered with the authority.as nobody wants to sign the property agreement with an unregistered developer.

1. Seeking the project registration record:

 Every real estate project in the Emirate of Dubai is registered with either Land Department or through Oqood as authorized by Real Estate Regulatory Department of Dubai (RERA). seeking the help of websites one can get to know whether the project is registered or not, as the authority has provided a non-exhaustive list of approved projects in Dubai.

1. Obtaining a copy of the title deed:

It is necessary to check if the actual property owner is the one mentioned in the title deed in SPA.Eventhough reviewing of property is must important, the buyer should also take the initiative to check whether there are any restrictions in the deed. the buyer can also seek a copy of community declaration for understanding the rights in relation to the use of the property.

1. Payment schedule to be checked thoroughly:

The payment schedule terms are the lengthiest pages in the SPA but are the most important document as it is the only obligation of the buyer under the contract. It must be reviewed cautiously to check if it meets the construction stages offered by the Developer.

1. Reviewing SPA termination clause:

In the termination clause, the Developer retains the initial investment amount paid by the purchaser in the event of termination of the agreement or if the buyer fails to abide by his financial obligations. this document must be thoroughly reviewed by the buyer before signing the SPA agreement to avoid any kind of misconceptions.

1. Escrow accounts details to be checked:

It is essential for the buyers to check the details from the developer or RERA of an escrow account to ensure the security of investment amount. Moreover, Dubai Law Number 8 of 2007 on maintaining the escrow account, obliges each contractor or developer in Dubai to maintain an escrow account for the project and all the investment made by the sellers should be submitted in the escrow account. 

1. Dispute resolution clause to be studied:

Buyers must study the dispute resolution clause because they must be aware about the methods for resolving it in the UAE court of law or independent arbitration centers.  buyers must seek legal advice from Arbitration Lawyers in Dubai, in case the contracts opt for arbitration.

1. Checking the power of attorney:

It happens at times that third party signs the contract on behalf of the contractor which is commonly known as authorized signatories. Ergo, the buyers must carefully review power of attorney granting signatory rights to the authorized signatory.

1. Checking the completion of project and failure consequences:

Every SPA has a completion date on which the project has to be handed over to the buyer by the seller, However, it happens numerous times that the seller fails to oblige to the promises and gets the project delayed. on the other hand, wherein, the buyers are not aware about the completion date end up losing their right for terminating a property and seeking compensation. Therefore, buyers must determine the completion date of the project and should understand the legal consequences for the seller, if they breach the provision of the contract.