Property terms, explained.
Buying property in Dubai comes with a vocabulary of its own, and most of it is never explained to the buyer. These are the terms I use with clients every week, written the way I would explain them across a table. Where a term touches on law or tax, I describe how it generally works, and I recommend confirming the specifics with a licensed lawyer or tax adviser, because I do not provide legal or financial advice.
Looking for an answer rather than a term? See the questions I am asked most often.
A
Assignment
The sale of an off-plan property before it is handed over. The original buyer transfers the sale contract to a new buyer, the developer approves the transfer through a no objection certificate, and the Oqood registration is updated instead of a title deed being issued. Most developers require a minimum share of the price to have been paid before they will allow it, and many charge a fee for it.
B
Broker Registration Number (BRN)
The number RERA issues to a licensed property broker. Every broker working legally in Dubai holds one, and it appears on advertising alongside the agency's office registration number and the Trakheesi permit number. It takes a moment to check, and it is the simplest way to confirm that the person you are dealing with is licensed.
C
Chiller charges
The cost of district cooling, which supplies chilled water for air conditioning. In some buildings the charge is included in the service charge, and in others it is billed separately by the cooling provider. The difference changes the real running cost of a property, so I establish which arrangement applies before I quote a net yield.
Common areas
The parts of a building or community owned jointly by all owners, such as lobbies, corridors, lifts, pools and gardens. They are maintained through the service charge, and the size and standard of them is the main reason service charges differ so widely between buildings.
Conveyancing
The work of transferring ownership from the seller to the buyer, covering the contract, the checks on the title and the safe handling of the money. It is not compulsory in Dubai, but I recommend it in most cases because it prevents errors that are expensive to correct afterwards. The fee sits outside the agency commission and is normally paid by the buyer.
D
DEWA
The Dubai Electricity and Water Authority, the utility provider. A new owner opens an account and pays a refundable security deposit before the supply is connected, and any outstanding balance has to be settled before a property changes hands.
Dubai Land Department (DLD)
The government land registry. It registers every transaction, issues title deeds and collects the transfer fee of four per cent of the price. Its regulatory arm is RERA. Ownership in Dubai is a matter of government record rather than private agreement, which is one reason transactions here complete in days rather than months.
E
Ejari
The official registration system for tenancy contracts in Dubai. A registered contract is needed for utilities, for residence visas and for any case at the rental dispute centre, so a landlord registers every lease through it.
Escrow account
A supervised account that holds buyer payments on an off-plan project. The developer may draw funds only as construction milestones are certified, and if a project is cancelled the regulator oversees the refund of what remains. The requirement dates from 2007 and was reinforced after the crisis of 2008 and 2009.
F
Form A, Form B and Form F
The standard RERA contracts. Form A appoints the seller's agent, Form B appoints the buyer's agent, and Form F is the contract of sale between buyer and seller. Form F is the document people usually mean when they say memorandum of understanding, and signing it is the point at which a resale becomes committed.
Freehold
Ownership of a property and its share of the land in perpetuity, available to any nationality in Dubai's designated freehold areas. A freehold owner can sell, let, mortgage or bequeath the property, and receives a title deed issued by the Dubai Land Department.
G
Golden Visa
A ten-year renewable UAE residence visa. Property is one of the qualifying routes, currently at an investment of AED 2 million or more, and the visa can extend to a spouse and children. Requirements are set by the authorities and change from time to time, so I confirm the current position for each client rather than relying on what applied last year.
Gross yield and net yield
Gross yield is the annual rent divided by the purchase price. Net yield deducts service charges, management fees and other running costs. The gap between the two is widest in buildings with high service charges and extensive amenities, so I quote both figures for a specific property rather than an area average.
H
Handover
The point at which a completed property is delivered to the buyer, after the final payment and the snagging inspection. Registration of the title deed follows, and the service charge begins to run from this date.
L
Leasehold
A right to use a property for a fixed term, up to ninety-nine years, after which it reverts to the freeholder. Most of the prime stock sold to international buyers in Dubai is freehold, so leasehold arises less often here than the question suggests.
Liability letter
A statement from a lender showing the outstanding balance on a mortgage and the sum required to settle it. It is needed to release the mortgage at the transfer appointment, and it usually carries a short validity, so the timing of the request matters.
M
Master developer
The company that owns and plans a whole community, builds its roads, utilities and public spaces, and sets the rules for everything built inside it. The large master developers include Emaar, Nakheel and Meraas in Dubai, Aldar and Modon in Abu Dhabi, and Marjan in Ras Al Khaimah. A master developer may build homes itself or sell plots to other developers, and its community rules apply to every owner. I describe the main ones in my article on the developers.
Mollak
The system through which service charges for jointly owned buildings are approved and collected under RERA supervision. Approved rates are published, which means a buyer can check what a building actually charges rather than accepting an estimate.
Mortgage pre-approval
A lender's written confirmation of how much it will lend, usually valid for around sixty days. It comes before a property is chosen. Non-resident borrowers can generally borrow a lower proportion of the price than residents, so establishing this early prevents a shortfall later.
N
No objection certificate (NOC)
A developer's written confirmation that it does not object to a transaction on one of its units. On a sale, the Dubai Land Department will not register the transfer without one, and the developer issues it only once service charges and instalments are settled. Developers issue a separate no objection certificate for alterations to a property, which is a different document and a different process.
O
Off-plan
A property bought before it is completed, either directly from the developer or by assignment from another buyer. Payments follow a plan tied to construction, they are held in escrow, and the buyer's interest is recorded on Oqood until the title deed is issued at handover.
Oqood
The Dubai Land Department register for off-plan property. Registration on Oqood records the buyer's interest in a unit before the building exists, and it is replaced by a title deed once the property is completed and handed over.
Office Registration Number (ORN)
The number issued to a licensed brokerage, as distinct from the BRN held by the individual broker. Both appear on compliant advertising.
P
Payment plan
The schedule of instalments on an off-plan purchase, tied to construction milestones or to dates. The plan affects the cash required before handover and, on a resale, the share of the price a seller must already have paid before the developer will approve an assignment.
Post-handover payment plan
A payment plan under which instalments continue after the keys are received, sometimes for several years. It reduces the cash needed at handover, and the cost of that flexibility is usually reflected in the price.
Power of attorney
A document allowing someone to act for a buyer or seller, which is what makes a purchase possible without travelling to Dubai. It has to be notarised and legalised properly, and in Arabic or bilingual form, and an unregistered or expired power of attorney is a common cause of a transfer appointment being lost.
R
Registration trustee
A government-appointed office where transfers are completed. Both parties attend, funds and documents are exchanged, and the new title deed is issued the same day. This simultaneous exchange is the reason the purchase itself carries so little risk.
RERA
The Real Estate Regulatory Agency, the regulatory arm of the Dubai Land Department. It licenses brokers and developers, supervises escrow accounts and service charges, and publishes the standard contracts.
S
Sale and purchase agreement (SPA)
The contract with the developer on an off-plan purchase. It sets the price, the payment plan, the specification and the completion date, and it sets out what happens if the project is delayed. It is the document worth reading closely, because the marketing material has no contractual weight.
Service charge
The annual cost of maintaining a building or community, charged per square foot of the property and approved through Mollak. It is the main ongoing cost of ownership in Dubai, and it varies enough between developments that I include the exact figure in every proposal.
Snagging
The inspection at handover that lists defects for the developer to correct before the property is accepted. It is normally carried out by an independent specialist, and it is worth doing properly, because it is far easier to have work put right before handover than afterwards.
Sub-developer
A developer that builds a project on land inside a community planned by a master developer. The buyer signs with the sub-developer, but the master developer's rules and approvals still apply, and owners may pay a community charge alongside the building's service charge, so I look at both names when I assess a project.
Suite area and gross area
Suite area is the internal area of a unit. Gross or saleable area also includes balconies and a share of the common areas. A price per square foot therefore depends on which basis is used, and comparing two properties on different bases produces a misleading answer, so I state the basis behind every figure I give.
T
Title deed
The electronic document issued by the Dubai Land Department proving ownership. It is bilingual, and it can be verified by the owner through the official Dubai REST application, so there is no ambiguity about who owns what.
Trakheesi permit
The advertising permit number required for every property advertisement in Dubai. A listing without one is not compliant, and its absence is a useful signal about the person publishing it.
Transfer fee
The fee of four per cent of the purchase price paid to the Dubai Land Department on registration, together with modest administrative and trustee fees. By market convention the buyer pays it, although the point can be agreed differently between the parties.
U
Usufruct
A registered right to use and enjoy a property owned by someone else for a defined period. It appears in some ownership structures and in leasehold areas, and it is registered with the Dubai Land Department in the same way as other interests.
V
Valuation
A lender's assessment of the market value of a property, on which the loan amount is based. Where a valuation comes in below the agreed price, the buyer makes up the difference in cash, so it is a figure worth anticipating on a financed purchase.
W
Will registration
Non-Muslim owners can register a will covering their UAE assets, either through the DIFC Courts Wills Service, which operates in English under a common law framework, or through the local courts at lower cost. Registering one removes any doubt about how a property passes and makes matters far simpler for the family.
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