Dubai authorities have tightened the rules for the sale of real estate. Among foreign home buyers in the emirate, one in five is a Russian, market players say. From now on, all payments must go exclusively to the bank accounts of the owners of the asset, according to an updated order from the Dubai Land Department.
Previously, it was allowed to transfer money by proxy to relatives, agents or representatives of the landlord, but now it is necessary to ensure that the bill for payment for such real estate belongs to the owner of the relevant property. That is, previously it was possible to make settlements with third parties who had a corresponding power of attorney, but now it is possible to make payments only to the account of the owner.
As for the changes for the seller, previously, in order to sell the object, individual owners could also use the power of attorney mechanism for persons who could receive funds for the investor in their mutual settlements. This made it difficult for the authorities to monitor and control the flow of funds. Perhaps this was the reason that such restrictions were imposed, and now all payment for the transaction must be credited to the owner's account.
Real estate agents who work in the United Arab Emirates say that foreign investors often paid for the purchase in cash. Deals were concluded quickly, and facilities were preferred to be inexpensive. If we take investors from the European Union specifically, then a lot of clients bought real estate with a budget of $200-500 thousand. Now these clients do not qualify for the "golden visa" status, which requires investments of at least $500 thousand. At the same time, they do not have a residence, they do not have an account, but they, for example, want to sell their property.
Many banks require not only, for example, a "golden visa" and the status of a resident of the Emirates, but also proof that you really live in the country or are engaged in some kind of business. For example, banks require statements from your utility bills. Sometimes the absence of these certificates can lead to the bank refusing to open an account.
And this requirement of a local bank account applies to absolutely any real estate. The very procedure for conducting a transaction at the trustee office in Dubai requires the exchange of so-called manager checks, these are checks for which you must deposit funds into your bank account after the transaction. Accordingly, these checks can only be debited in UAE banks. Therefore, it is recommended that all non-residents open accounts in the Emirates, become residents, or apply for golden visas to complete transactions."
The new rules for conducting transactions are aimed at suppressing fraudulent schemes. Over the past six months, there have been several cases where fake power of attorney for the sale of real estate has been issued through deepfakes. The document can be registered with a notary through a video link. In addition, the withdrawal from cash is being introduced as part of the overall concept of whitewashing the financial system of the United Arab Emirates. The country strives to become open and secure in order to attract large institutional investors. However, the rule of bank accounts for the sale of real estate has so far been adopted only by Dubai. Other emirates have the same schemes.
