Once the principal terms of a transaction have been agreed, the parties will typically either enter into a MOU documenting those terms or proceed directly to a formal SPA. In Dubai, both the Dubai Land Department's standard-form “Form F” and a standalone SPA are typically submitted to the Dubai Land Department to facilitate registration of the transaction. The negotiated SPA, which contains the full commercial and legal terms of the transaction, is appended to and incorporated within Form F; both documents are lodged together with the Dubai Land Department to initiate the title registration process.

In Abu Dhabi, the documentary requirements differ depending on the nature of the transaction. For primary market transactions, that is, transfers from a developer directly to a buyer, the parties are required to use the Unified Sales Contract template prescribed by the relevant authority. This mandatory form cannot be replaced by a bespoke SPA, although the parties may supplement it with additional agreed terms. For secondary market transactions, that is, transfers between private parties, there is no equivalent prescribed form; instead, the relevant transfer documentation is processed through the Abu Dhabi Real Estate Centre for onshore transactions, and through the applicable registration systems in the DIFC or ADGM, as relevant.

A formal SPA may typically contain the following fundamental warranties by the seller to the buyer:

• The property is not adversely affected by any easement, right, privilege or liability of which the seller is aware other than those disclosed in the agreement of which the buyer is aware or could have ascertained on reasonable inspection of the property.
• The seller has authority to sell the property.
• There is no outstanding debt or mortgage, and all service charges have been paid in full.
• All property and development obligations have been complied with.

  A developer selling property off-plan will also be required to give the following warranties:

• To repair and remedy any structural defect for ten (10) years from the date of completion.
• To repair or replace defective installations, including mechanical and electrical works and sanitary and plumbing installations, for one (1) year from the date on which the property is handed over to the owner.

The precise scope of any particular warranty, and whether any warranty is to be given at all, is a matter of negotiation between the seller and the buyer.

Under the Civil Code, an agreement becomes legally binding when the following conditions have been met:

• The parties have agreed on the essential terms.
• The subject matter of the agreement exists, is defined or capable of being defined, and is legal.
• The obligations under the contract exist for a lawful purpose.

Legal title is transferred upon the execution of the SPA and the payment of consideration; however, title is not perfected until it is registered at the Dubai Land Department or the Abu Dhabi Real Estate Centre or the DIFC/ADGM Property Registrars (as applicable).

The buyer will typically be responsible for the following:

• Buyer’s agent’s fees.
• Legal costs.
• Due diligence costs for consultants who have prepared building condition reports, valuation appraisals and real estate surveys.

The seller will typically be responsible for the following:

• Legal fees.
• Agents’ fees.

Dubai – Onshore

The fee for registration of a freehold right at the Dubai Land Department is 4% of the total value of the sale contract or the property value, whichever is higher, typically shared equally between the seller and the buyer.

The fee for registration of a musataha at the Dubai Land Department is 1% of the musataha contract value payable by the recipient of the musataha.

The fee for registration of a usufruct right at the Dubai Land Department is 2% of the lease value.

The fee for registration of a long lease at the Dubai Land Department is 4% of the total rent value payable throughout the term of the lease, including any premium paid.

Dubai – DIFC

In the DIFC, the land transfer fees are 5% of the total value of the property.

It is possible for this fee to be waived if the transfer is between a company and its sole shareholder or between two companies that share the same beneficiaries who hold shares in the same proportions in each company. However, this is dealt with on a case by case basis and an application would need to be made to the DIFC.

Abu Dhabi – Onshore

The fee for registration of a lease for over twenty-five (25) years at the Abu Dhabi Municipality is 4% of the total consideration.

For leases exceeding four (4) years but less than twenty-five (25) years, the registration fee is 1% of the first year’s rent.

The fee for registration of a lease of four (4) years or is AED 100 per registration of each new lease/renewal of a lease.

Abu Dhabi - ADGM

The fee for a lease with a term of twenty-five (25) years or more (including any renewals) at the ADGM is 2% of the total value of the contract or fair market value as determined by the Registrar, whichever is greater (or 5% if government-owned land).

The fee for registration for a lease with a term of less than ten (10) years (including any renewals) at the ADGM is AED 100 per year.