Mortgages & Sugar Babies, Ex Husbands/Wives, Boyfriends & Girlfriends

This post took is doing numbers on Reddit. So, I figured here would be a good home for it for those doing their research.

Love is amazing, property is an asset. Don’t lose one because you lost the other. Be smart and protect yourself.

Offplan (or cash) Purchases - Easy to add people, expensive to remove

Any two (or more) strangers can join funds and buy property together. Both can be added to the oqood/deed. And ownership percentages are manually set. Meaning, you shouldn't trust that the developer will set the ownership percentages based on who pays what amount. They default to 50:50 (and it's generally a sales agent creating the paperwork who doesn't care too much for admin).

After a certain point you will have to pay to change those percentages. If you're married, you can gift your percentage for a smaller fee, but if you're not, you pay the 4% transfer fee of the percentage owned, based on DLD's valuation of the property.

And yes, I've seen it happen where a woman put her (in her own words) 'sugar baby' on the deed, and then he couldn't afford his half. So, she had to pay 4% of 50% of a multi-million dirham property just to reduce his ownership claim.

Joint Mortgages are for Married People

You can be a co-borrower or a co applicant. Which one you are determines whether you/your spouses income is factored into the affordability. What it doesn't factor in is how much you're/they're entitled to.

The bank will assume a 50:50 split. So, even if you pay the full down payment, and are the only one paying the mortgage, legally, your spouse is entitled to 50% of the profits at the time of sale. The trustee office will sometimes, but rarely, confirm this on transfer day. And it will cost you to change those percentages.

You need to outline the percentages at the outset. Tell the bank 100 times, and tell the trustee on the day of transfer.

If you're getting divorced, no one can "help" you and you're relying on your soon to be ex to be agreeable to reducing their ownership (which rarely happens).

Again, yes. I've witnessed this a few times. You cannot demand a higher percentage from DLD. Your spouse must agree & pay to gift it, or draft a POA to have the cheques created in your name.

And if you can't afford to buy them out of 50%, you may be forced to sell the property.

Joint Mortgages aren't for Boyfriend & Girlfriend

This isn't a DLD thing (see above, multiple strangers can buy property with cash). It's a bank thing. They will want your marriage certificate as proof, and will not proceed without it.

But, unfortunately, I have seen partners pay the down payment, and/or pay 50% of the mortgage monthly, yet hold no ownership claim.

It's a BIG risk.

Obviously, when you're in love, no one thinks of things falling apart or getting to a point of breaking up, but it happens.

You can go to Abu Dhabi and get married for under 500aed - Do that. If you're serious enough to buy property together, you can pay 500aed for a piece of paper.

Otherwise, you need to draft a solid will or ownership document with a lawyer (at a significantly more expensive price. Recent quotes I've seen are between 6k & 10k).

Everyone is in it for themselves

You see it on this sub every day - everyone is protecting their own interests. The bank isn't going to tell you how DLD will look at things - it doesn't concern them. The developer literally doesn't care about the bank or what the bank wants. In many cases I have had developer representatives say "they're not our client" even if the client is in an MOU to purchase something, and will be their client soon.

The agents are trained to sell, but even the good ones aren't trained or prepped to know your own specific personal circumstances.

In Dubai, people buy property as literal gifts for people, use property as a way to set their partners, kids, family members up for the future, and put property in other peoples names to avoid taxes in their home countries. You can't assume someones needs.

You as the buyer need to be astute and protect your own interests.

I love how black and white Dubai Property laws and regulations are. There is no "interpretation of the law", and our digital systems put us strides ahead of other countries (and makes mistakes less likely).

But it's worth remembering that the legal process is expensive. It's better to ask a million questions at the outset and ensure your ownership is protected, rather than trusting the process and losing a chunk of money trying to fix something that could have been avoided at the outset.

Image by Muhammad Abubakar from Pixabay