Dubai’s amazing buildings show how fast the city grows, and its property market is just as active. People invest a lot of money here. But behind the shiny towers, there’s a tricky legal system. You could face serious money troubles and stress if you’re not careful. Even though the Dubai Land Department (DLD) and its rule-making body, RERA, try to clarify things, problems still happen. Many cases go to the Rental Disputes Center (RDC) each year. This shows that even simple deals in the Dubai real estate market can have hidden legal traps.
Observing this market over the past decade reveals recurring legal issues. Knowing about these common problems, understanding why they happen, and learning from real-life examples is important for anyone buying or renting here. This article breaks down some of the most significant legal dangers and discusses simple ways to handle them.
1. Off-Plan Property Trouble: Delays, Changes, and Money Issues
Buying “off-plan” means purchasing a property before it’s built. It can seem like a good deal, but it has risks that often cause arguments.
- The Problem: The building takes much longer to finish than promised in the contract. Without asking the buyer, the builder changes things like the materials, apartment layout, or promised facilities (like pools or gyms). Sometimes, there are problems with the special bank account (called an Escrow account) that holds buyer payments to make sure the building gets built. Instances have occurred where builders promised fancy materials but used cheaper ones, or finish dates were pushed back for years, locking up the buyer’s money. Often, communication from builders during delays is poor, leaving buyers worried and confused.
- Lessons from Cases: Arguments often happen because the contract (the Sale and Purchase Agreement or SPA) isn’t clear about delays or changes. Rules about Escrow accounts (RERA Law No. 8 of 2007) are meant to protect buyers’ money for construction only, but fights can still happen over when that money is released or when the building is stopped.
- How to Avoid It: Read the Contract Carefully: Don’t just quickly look at the SPA. Hire a good real estate lawyer to check everything, especially parts about finish dates, penalties for delays, what exactly is being provided, and cancellation rights.
- Check the Builder’s Past: Look up the developer. Have they finished other projects on time and as promised? Check RERA’s information and look online for reviews.
- Confirm the Escrow Account: Ensure the project has a proper Escrow account approved by RERA. Check the account details independently with DLD or the bank managing the account. Payments should only go into this specific account.
- Keep Records: Save copies of all payments, emails, messages, brochures, and agreements.
2. Fake Promises: Misleading Ads & Agent Claims
Sometimes, what’s promised isn’t what’s delivered.
- The Problem: Real estate agents or ads might promise high rental income, which isn’t realistic. They might exaggerate how nice the property or the view is. They might forget to mention important things like high yearly fees (service charges) coming up or that a new building will block the view soon. People bought apartments thinking they had a clear sea view, only to find out later that a new tower was planned right in front.
- Lessons from Cases: It’s hard to prove an agent misrepresented something if promises were only made verbally. RERA has rules (like a Code of Ethics) to stop agents from engaging in bad behavior, but proof is needed to support a complaint. Often, arguments happen because promises aren’t written down.
- How to Avoid It: Get Promises in Writing: If an agent makes a big promise (like guaranteed rent, a specific view, or included furniture), ensure it’s written clearly in the initial agreement (MOU) or the final contract (SPA).
- Check the Agent: Ensure the agent and company are registered with RERA. You can check this on the Dubai REST app or the DLD website.
- Check Things Yourself: Don’t just trust the agent—research rental prices in the area. Visit the property location at different times of the day. Ask about plans for new buildings nearby.
- Ask Questions: If something sounds too good to be true, ask lots of questions and demand clear, written answers.
3. Renting Problems: Unfair Evictions, Deposit Fights, and Rent Hikes
Renting is very common in the Dubai real estate market, and so are disagreements between landlords and tenants.
- The Problem: Landlords might try to evict tenants unfairly (like saying they need the property for themselves but not giving the proper 12-month legal notice through official channels). They might keep the security deposit for unfair reasons or charge for minor ‘damage.’ They might raise the rent more than the RERA Rent Calculator allows.
- Lessons from Cases: Many arguments sent to the RDC happened because one side didn’t follow the tenancy law (Law No. 26 of 2007 and its updates). Common issues are not giving the correct notice, unclear reasons for keeping deposits, and fights over who should fix things. The RDC usually follows the law strictly, but knowing the rules is necessary to make a case.
- How to Avoid It: Know Your Rights: Become familiar with Dubai’s tenancy laws, especially rules about eviction notices, security deposits, and how much rent can increase (use the RERA calculator!).
- Record Property Condition: Take lots of photos and videos when moving in and moving out, showing the condition of the place. It’s best if both the tenant and the landlord sign off on this.
- Use Formal Communication: Send important messages (mainly official notices) the correct legal way, which often means using a notary public as the law requires.
- Register with Ejari: Ensure the rental contract is registered with Ejari right away. This is legally needed and required to file a complaint with the RDC.
4. Surprise Service Charges
These are yearly fees to maintain shared areas (like pools, lifts, and security), but they can cause headaches.
- The Problem: It’s not clear how the service charges are calculated. The fees jump up a lot year after year without good reason. Charges are applied for services that aren’t done well or there are disagreements about the quality of maintenance.
- Lessons from Cases: The DLD created the ‘Mollak’ system to clarify service charges and manage Owners’ Associations (OAs). However, people still argue about whether the fees are fair for the services they get. Cases show that owners need to be more involved in their OAs.
- How to Avoid It: Ask for Past Bills: Before buying, ask to see the service charge bills for the last few years, preferably checked by an accountant.
- Know What’s Included: Find out exactly what the service charges pay for.
- Join OA Meetings: Owners should consider getting involved in their Owners Association meetings to understand how money is spent.
- Question High Charges: Use the Mollak system to check the approved fees. Ask questions if they seem too high or unfair.
The Most Important Thing: Check Everything and Get Legal Help
Almost all these problems happen because people don’t check things carefully enough or don’t get advice from a lawyer. The Dubai real estate market has its own specific rules. Assumptions based on other places can lead to costly mistakes.
- Don’t Trust the Seller’s Lawyer: They work for the seller, not the buyer.
- Hire Your Expert: Get a lawyer who knows Dubai real estate law well.
- Read Before You Sign: Never sign anything (MOU, SPA, rental contract) until it fully understands what it says and means.
Final Thoughts
The Dubai real estate market still has great opportunities. The government tries hard to make it safer and clearer for everyone. But it’s still up to the participants – buyers, sellers, landlords, and tenants – to be careful, get information, and act wisely. Learning from past problems helps set realistic expectations and make smart choices. By checking deals carefully, asking for clear information, keeping good records, and getting expert legal help, individuals can handle the challenges and lower their risks in this busy market. Being informed helps participants stay protected.