Investing in off-plan properties in Dubai can be highly rewarding, but it’s crucial to understand when to sell such a property to comply with legal requirements and avoid potential issues. Selling too early, when the owner is not legally allowed to sell, can lead to various legal problems. Certain financial and legal requirements must be met before the owner is allowed to resell. For a detailed overview of the best time to sell an off-plan property, keep reading.
When to Sell an Off-Plan Property
Selling an off-plan property in Dubai may differ from selling any other type of property. There are specific conditions set by developers and the authorities that must be met before resale is allowed. These conditions include the completion of specific payment milestones, obtaining the developer’s consent, and ensuring that the property is registered with the relevant authorities.
Completion of Required Payment
When selling an off-plan property, it is crucial to meet the developer’s payment requirements. Prior to purchasing an off-plan property, carefully review the contract to ensure there are no clauses that prohibit resale before settlement.
In Dubai, the Dubai Land Department has implemented laws preventing investors from reselling an off-plan property without fulfilling a specified payment. Typically, the seller must have paid a minimum percentage of the total property value in order to resell, which can range from 30% to 40% depending on the contract and the developer’s policy. This requirement ensures that the seller has a significant equity stake in the property before it can be transferred to a new owner.
Acquire an NOC
When selling off-plan properties, sellers need to obtain the developer’s consent before the full handover. This is important to ensure that the new seller can meet the developer’s contractual obligations, such as payment schedules and property handover conditions. Failing to obtain the No Objection Certificate (NOC) could lead to legal issues, as developers have the authority to block or delay the resale process. In Dubai, sellers also have the option to apply for an e-NOC without visiting the developer, but this process incurs a transfer fee.
Completion of Registration with Authorities
In Dubai, if you want to resell off-plan properties, you need to register the property with the Dubai Land Department using the Oqood system. This government platform manages the registration of off-plan properties in Dubai. The registration is mandatory and serves as proof of ownership, allowing the property to be legally transferred from one owner to another.
Owners are only allowed to sell the property after obtaining the Oqood certificate. Failure to register the property with the DLD can result in fines or penalties in some cases.
Adherence to RERA Regulations
RERA oversees all real estate transactions, including the sale and resale of off-plan properties. The authority establishes the legal framework for off-plan transactions, protecting both developers and buyers. Sellers must ensure that all sale terms comply with RERA’s rules, especially those related to payment milestones and contract transfers.
Penalties for Early Sale
There are no direct penalties for selling an off-plan property before completion, as long as the seller complies with all legal and developer requirements. However, failing to meet the required conditions, such as incomplete payments or missing developer consent, can result in delays or penalties.
What Percentage of the Property Must be Paid Before I Can Sell it?
Typically, the seller must pay between 30% and 40% of the property value before being allowed to resell an off-plan property. However, this percentage may vary depending on the contract and the developer.
Are there any penalties for selling an off-plan property too soon?
There are no specific penalties for selling off-plan before completion, provided that the seller complies with all legal requirements. However, failing to meet these conditions may result in delays or financial penalties.
Knowing when to sell an off-plan property in Dubai is key to maximizing returns while also ensuring compliance with local laws. These are all the requirements one must fulfill to be able to sell an off-plan property without any legal complications. The seller must also consult with a legal expert or real estate advisor to make an informed decision. Follow these steps to sell an off-plan property in Dubai for a seamless process.
