Register Your Sales and Purchase Agreement with DLD in UAE

The real estate sector in Dubai is renowned worldwide for its several investment opportunities. However, investing in property in Dubai isn’t a walk in the park. The government has implemented several regulations to standardise the growing demand. One such regulation is the Sales and Purchase Agreement (SPA). The SPA is a legal document that confirms the sale of a property between the buyer and the seller. Its primary function is to protect the rights of both parties involved and clear any confusion. The property seller is responsible for acquiring the SPA document signed by the buyer and registering it with the Dubai Land Department (DLD) to legitimise the purchase. This blog post will lead you through the important stages of registering your SPA with the DLD and provide helpful tips for a hassle-free legal procedure.

Understanding Sales and Purchase Agreement (SPA)

For an agreement to occur, the buyer and seller must first discuss and agree upon the price and the terms and conditions of buying a property. The SPA provides a negotiation process guideline and is often used while purchasing and selling a property. Once signed, the purchase and sales agreement becomes a legally binding document for both parties and is usually facilitated by an authority. Additionally, the agreement records when the final deal is scheduled. 

Registration Process for Sales & Purchase Agreement with DLD

A quick and low-cost solution to protect your real estate investment is to register your SPA with the DLD. All buyers and sellers should follow this procedure to ensure their transaction goes well without complications. A signed Sales & Purchase Agreement (SPA) is evidence in court that you have legally purchased a property. It is, therefore, one of the most important pieces of paperwork for both parties while buying or selling a property. 

• Registration Procedure

Registering a Sales & Purchase Agreement (SPA) with the Dubai Land Department (DLD) involves several steps: 

• • STEP 1: Access the OQOOD Portal and use the ‘Initial Sale Agreement Registration Service’ option.
    
  • STEP 2: Select the category labelled as ‘Property’, provide all the mandatory details, then upload any necessary documents, and choose your preferred ‘Payment Method’.
  • STEP 3: Once the payment is made, please ensure that the application is completed and submitted.
  • STEP 4: The buyer will receive a document over their email confirming that their transaction is successful.

Now that we are familiar with registering SPA with DLD let us focus on the necessary documents for completing the registration.

• Documentation

Depending on the entity type, individuals and companies must provide DLD with different documents.

• • For Individuals

    • Original and a photocopy of the signed Sales & Purchase Agreement document
    • A copy of the seller’s Emirates ID or passport
    • A copy of the buyer’s Emirates ID or passport

  • Individual Foundation Companies:

    • A copy of the Commercial Licence
    • A copy of Emirates ID/Passport belonging to the licence holder
    • Power of Attorney (if required)

  • Limited Liability Companies

    • A copy of the Commercial Licence
    • A copy of Emirates ID/Passport belonging to the licence holder
    • Power of Attorney (if required)
    • Copy of Company’s articles of association and its appendices translated into Arabic
    • A copy of the shareholder’s certificate

  • Companies Running Outside UAE

    • A copy of the Commercial Licence
    • A copy of Emirates ID/Passport belonging to the licence holder
    • Power of Attorney
    • A copy of the Company’s articles of association and its appendices translated into Arabic
    • A certificate issued by the Ministry of Foreign Affairs
    • A copy of the certificate of shareholders
    • If you plan to purchase a property, you will need to acquire a letter of no objection from the free zone

  • Companies Located in GCC

    • A copy of the Commercial Licence
    • Photocopy of National ID or passport of the licence holder
    • A power of attorney, if necessary
    • A copy of the company’s articles of incorporation and its appendices which should be in Arabic
    • Certificate from the Ministry of Foreign Affairs
    • A copy of the shareholders’ certificate

Note – When you’re registering a SPA with DLD, there are some important points to keep in mind:

• • For the agreement to be valid, the signatures of both parties are mandatory.
  • The SPA document should be in Arabic.
  • It is mandatory to have a lawyer’s stamp on the SPA document.
  • The contract must be registered within 90 days.

Registration Cost for SPA with DLD

To register a SPA with DLD, both parties must pay a specific amount.

• • The buyer will levy 2% on the overall sales value.
    
  • 2% will be levied by the seller based on the overall sales value.
    
  • A fee of AED 10 for knowledge will be charged on every value.
  • A mandatory innovation fee of AED 10 will be charged on each value
  • Self-registration fees of AED 1000 will be charged in commencing sales
    

However, the exact amount varies depending on different factors, such as property value and property type. The current fee structure is mentioned on the DLD website.

Terms and Conditions for SPA Registration

To register for SPA, please keep the following terms and conditions in mind:

• • Signatures of both parties are required to legalise the purchase.
  • Registering the agreement within 90 days of signing the contract is mandatory.
    
  • If the purchaser is underage, their legal guardian should sign the document on their behalf, and a copy of their ID or passport should be attached.
    
  • A letter from the Federal Authority for Identity and Citizenship should be attached if the purchaser is a decree-holder
  • A company not in UAE should first register with either the Dubai Multi Commodities Centre Authority (DMCC) or the Jebel Ali Free Zone Authority (JAFZA).

The process of registering an SPA with DLD involves several steps. This is done to ensure that the rights of both the buyers and sellers are protected. Dubai’s real estate market is a secure and hassle-free investment option if SPA is linked with DLD. 

Benefits of Registering SPA with DLD

Registering your SPA with the Dubai Land Department (DLD) has numerous benefits. Some of them are –

• • A SPA becomes a public record matter once registered with the DLD. Both parties will have a legal resort even if one breaches the contract. 
  • Registering your SPA with DLD will help you save money. The registration fee for a SPA is relatively low. However, if you do not register your SPA, you must go through the legal process to regularise the contract, which could be heavy on your pocket.
    
  • The funding process is made easy. Registered SPA buyers are more likely to receive funds from reliable banks and lenders.
  • Registering your SPA with DLD increases the value of your property. A registered SPA property provides buyers more confidence to legalise the property and avoid fraudulent disputes and crimes. It can also lead to a higher selling price.

Conclusion

To guarantee the validity of your property in the UAE, it is important to register a SPA with the DLD. By following the guidelines in this blog, you can better understand the process and ensure adherence to the regulations created by the DLD. Remember that the real estate sector is constantly changing, so it is wise to consult legal professionals and official sources to stay informed about the most recent procedures and requirements.

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