How to Sell Mortgage Property
Wondering how to sell mortgaged property in Dubai? Once the seller has found a buyer and Form F (MOU) which outlines all the details and terms of the sale, has been signed, the following steps will need to be carried out when selling financed property in Dubai.
1. APPLY FOR A LIABILITY LETTER FROM THE LENDER
The seller will need to apply for a liability letter to their bank, which will state the amount on the property that still needs to be paid.
2. APPLY FOR AN NOC FROM THE DEVELOPER
After this, the seller will need to apply for a NOC (No Objection Certificate) from the developer of the property. This is to ensure that there are no outstanding payments for service charges to the developer.
3. BLOCK THE PROPERTY IN THE BUYER’S NAME
Before the buyer clears the seller’s mortgage, another process, known as ‘property blocking’ will take place, in order to protect the buyer. The seller, the buyer and other parties will need to visit one of the Dubai Land Department (DLD) registration trustee’s offices in order to block the property in the buyer’s name. This will allow the buyer to clear the seller’s mortgage while ensuring that the latter cannot sell the property to anyone other than the buyer.
When blocking property in Dubai, the following documents will be required:
Liability letter from seller’s bank
Form F (MOU)
NOC from developer
Copy of the title deed
Cheque to the name of the bank (for the liability letter amount of the purchase price)
Cheque to the seller (for the balance amount of the purchase price)
Cheque to Dubai Land Department (for the 4% transfer fee)
Original passport, visa and Emirates ID (buyer and seller)
4. OBTAIN CLEARANCE LETTER AND ORIGINAL TITLE DEED
The next step in selling mortgaged property in Dubai is to deliver the buyer’s cheque to the bank. Once the seller’s mortgage has been cleared, the bank will issue the property mortgage release letter or clearance letter and the original title deed to the seller.
5. TRANSFER THE PROPERTY IN THE BUYER’S NAME
The final step in selling financed property in Dubai requires both parties to again visit the DLD registration trustee’s office for the transfer of ownership. At this point, the seller’s existing mortgage will be released and a new title deed will be issued in the name of the buyer.
The following documents will be required to release the seller’s mortgage:
Original title deed
Mortgage release letter from the bank
Passport, Visa and Emirates ID
The above process is what will take place when a mortgaged property is being sold to a cash buyer.
However, it’s important to note that if the buyer is also mortgaging the property, the selling process will likely take longer, as the seller’s mortgage is only cleared after the buyer’s bank gives final approval on the loan.
Additionally, the property blocking process will not be required as the original title deed will be released to the buyer’s bank instead after it settles the mortgage with the seller’s bank.
