When investing in a property in Dubai with the goal of getting rental returns back, there are two types of ready property that you can invest in. Vacant property and tenanted property. How does the status of the property affect the new property owner?
Buying a vacant property allows the owner to either move-in or list the property on their schedule. But if their sole plan is to secure rental yield then listing, finding the right tenant and getting a return may take some time.
Investing in a property that is already tenanted may save the new owner the trouble of listing, negotiating and the entire process of getting a tenant. But the landlord duties and responsibilities from the previous owner transfers directly to the new owner.
Tenancy after the property transfer.
When a tenanted property gets sold, the tenancy agreement continues to progress under the article 28 of Dubai Law No. 26 of 2007. The new owner assumes the duties and responsibilities of the landlord.
Does an existing eviction notice get cancelled with a property transfer?
If there is an eviction notice served by the previous owner, it does not simply get cancelled. Just like the tenancy continues, the served notice resumes as well. But if the new owner and the tenant want to cancel it or to renegotiate terms of the tenancy, they can go ahead with it.
However, if the eviction has not been issued correctly or officially, the new owner will definitely face challenges in evicting the tenants. Any sort of dispute should be taken to the RDC (Rental Dispute Center) to make sure that any form of dispute is resolved legally.
What should a property investor check when buying a tenanted property in Dubai?
When buying a property in Dubai with an ongoing tenancy, there are additional things that the buyer should be aware of.
Current tenancy agreement has to be thoroughly discussed with the seller to understand what the clauses are and why they’ve been agreed upon, alongside the Ejari, expiry date and rental terms.
The eviction notice (if there is one issued) to understand the legality of the eviction notice, remaining period of the tenancy and the process to follow upon eviction
Vacant possession to clearly set a date for the existing tenants to end their tenancy.
If there is no eviction served, the buyer should understand that the current standard notice period for an eviction is 12 months. So if the property buyer is planning to serve the current tenants an eviction notice, they should be aware of;
Dubai's tenancy regulations state that the landlord should give the tenants a notice period for at least 12 months' other than for specified eviction situations.
The notice must be served through a notary public or registered mail to be recognised as an official serving.
Personal occupation and sale are acceptable grounds, subject to the applicable legal conditions.
If the election is for personal occupation, DLD regulations place additional requirements, including the landlord's need for the property and the absence of a suitable alternative.
Navigating Through Dubai’s Real Estate Market
Buying and selling a property in a market as diverse and fast-changing as Dubai requires professional guidance. Finding deals that fit your requirements, understanding the property and regulations, dealing with tenancy, currency transfers, and the many other elements involved in a property transaction are best handled professionally.
Getting expert guidance when investing in a property in Dubai will save you a lot of hassle, while also allowing you to benefit from the market relationships that are already in place. Make sure you are investing with an experienced professional when you buy, sell or rent in Dubai.