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.