Buying a property in the secondary market in Dubai can be a complex process, especially when the property is co-owned by two partners, whether it's a 50/50 split or in different shares. One of the most common questions that arises in such scenarios is whether the Buyer can issue the cheque under the name of only one owner or both owners. Let's delve into this matter to understand the intricacies involved and the necessary steps to ensure a smooth transaction.
Table of Contents
- Understanding Joint Ownership
- Cheque Issuance and Title Deed
- Power of Attorney (POA) Requirement
- Bank Approval and Compliance
- Conclusion
Understanding Joint Ownership:
When a property is co-owned by two partners in Dubai, the ownership shares are typically reflected in the Title Deed issued by the Dubai Land Department. This document legally outlines the ownership structure, specifying the percentage of ownership held by each partner.
Cheque Issuance and Title Deed:
In line with the Title Deed, it's imperative that the Buyer issues the purchase price or selling price via two manager cheques—one under the name of one owner representing their respective ownership share and the remaining manager cheque under the name of the other owner reflecting their ownership percentage.
This approach ensures compliance with the legal framework governing joint ownership, as outlined in the Title Deed. It accurately reflects the ownership structure and ensures that each owner receives their rightful share of the proceeds from the property sale.
Power of Attorney (POA) Requirement:
In cases where the owner/seller insists on receiving the entire purchase price under the name of one owner only, a Power of Attorney (POA) becomes necessary. The POA serves as a legal document through which one owner grants authority to the other to receive the selling price fully under their name.
This step is crucial to ensure transparency and legality in the transaction process. It provides assurance to both parties involved—the buyer and the seller—that the transaction is conducted in accordance with legal requirements and the terms stipulated in the Title Deed.
Bank Approval and Compliance:
For buyers seeking financing for the property purchase, obtaining approval from the bank is essential. However, the acceptance of POA by the buyer's bank may vary depending on the bank's compliance and legal department policies.
Some banks may refuse to accept POA and may require the purchase price to be issued via manager cheques with the same shares as specified in the Title Deed and under the names of all owners listed in the Title Deed.
Conclusion:
In conclusion, when buying a property in Dubai's secondary market owned by two partners, adherence to the legal framework outlined in the Title Deed is paramount. Buyers should issue manager cheques reflecting the ownership shares of each partner unless a valid POA is provided by the seller to consolidate the payment under one owner's name.
It's advisable for buyers to communicate with their banks regarding the acceptance of POA and to ensure compliance with legal requirements throughout the transaction process. By navigating these considerations diligently, buyers can facilitate a seamless and legally sound property acquisition experience in Dubai's dynamic real estate market.
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