How a deal goes through in Dubai.

Let's tell you in detail how secondary real estate transactions take place in Dubai. There will be technical terms in the article, but we will try to explain the whole process in simple language.

A broker in Dubai is an important element of the transaction. As a professional market participant, he has access to create smart contracts in a special Trakheesi system created by Dubai Land Department - abbreviated as DLD.

DLD is the Dubai Land Department, which is responsible for all real estate transactions.

When buying a secondary apartment, there are three types of contracts: A, B and F.

Contract A is an agreement between the apartment owner and the broker. All the data on the apartment and the seller's details are pulled in, which are then used by the broker to create the final contract of sale. It also specifies the remuneration for the transaction and the expected sale price. The owner can sign no more than three contracts for one apartment A.

Contract B is an agreement between the broker and the buyer. It is usually done when the property has already been selected, so the contract includes the details of the apartment, the value of the property and the amount of the broker's commission from the buyer.

When the broker creates a contract in the system, you receive a text message on your phone with a link, followed by a second message with a code for signing. Enter the code in the field - the smart contract is signed.

If contracts A and B exist in the transaction, the seller's broker can connect them in the system and create a master contract called Contract F or MOU - Memorandum of Understanding.

Both parties to the deal receive a text message with a link and a code - that's it, the documents are signed.

The MOU will contain the apartment details, price, details of the parties and other essential terms of the transaction, such as the existence of rental agreements and the need to evict tenants before the transaction, whether the furniture remains in the apartment and other details.

When signing the MOU, the buyer gives the agency a check made out in the seller's name with a deposit of 10% of the apartment's value. The check is kept by the agency and returned to the buyer at the time of closing the deal in the trusty office, so in Dubai are called notary offices, where the registration of the transaction takes place.

The default MOU is for two months. For the duration of the contract, the apartment is blocked in the DLD system so that the owner cannot conduct the transaction with someone else.

If the seller decides to break the contract unilaterally, he returns the deposit to the buyer in double amount, if the buyer breaks the contract - he loses his 10%. In such a case, the homeowner needs to open a case in DLD, and after receiving the decision, go and cash the check.

About checks and checkbooks, so understandable to Americans, but unfamiliar to the Russian mentality, we will write a separate post, but for now let's get back to our deal.

When the F contract is signed, the owner orders a NOC - No Objection Certificate - from his management company, which translates to "no objection certificate."

This document confirms that the apartment is free of any debts to the developer and debts to the management company for the operation of the building (service charter).

Usually the "management companies" will ask the seller to pay the service charge six months in advance in order to get the NOC. At the transaction, the buyer returns that amount to the seller. Usually just handing over cash.

You can order NOC on your apartments via the Dubai Rest app - it's a giant multi-app from DLD where you can see all the properties registered to you.

Such an in-app service is called eNOC. It usually takes between 3 and 10 days to get approval from the developer. The slowest ones take 2 weeks. The broker then schedules a transaction date at the trusty office.

At the appointed time, the seller and buyer and their brokers come to the trusty. These are cozy notary offices with padded areas, water and coffee. There are two large trusties operating next to the Whitewill office.

The notary is given a check from the buyer to pay for the condo, and a check for 4% for registering the transaction with the DLD. There are no annual property taxes in Dubai, just this one-time payment.

If the transaction is in cash, the seller gives a receipt for the money.

By the way, the services of the trusty office to conduct the transaction cost 4200 dirhams.

If both buyers are Emirati residents, the notary simply takes your ID cards, inserts them into the scanner and asks you to put your right hand finger on the scanner. That's it - the deal is done.

Usually after that, the notary asks you to wait 10-15 minutes and the parties go for coffee at Starbucks until everyone gets a text from DLD that the registration was successful.

After receiving the text message, the seller hands the buyer the keys and picks up his check from the notary, the money from which can be transferred to his account at any ATM.

The buyer will already have a Title deed lying in the mail at this point - that's what they call a certificate of title in Dubai.

Not a single physical signature, not a single piece of paper except for two colored checks. Smart Dubai.