Overseas Investors Must Follow New Rule When Selling

Dubai Land Department updates POA (power of attorney) rules for non-resident property investors.

Property investors in Dubai who are based overseas need to follow new guidelines in issuing power of attorney (POA) rights to others when it comes to selling their units.

Starting this week, such property sellers must have bank accounts in the UAE to clear the cheques, according to industry sources. Cheques will only be accepted in the name of the property owner/seller – and no POA names will be accepted for a property sale in Dubai.

It has been a common practice for those property investors in the UAE to assign power of attorney rights to a third-party, typically relatives, to ensure the payments are cleared once a buyer is found for their unit.

“Based on a POA from Dubai courts, banks would issue cheques in the name of the individual holding the PoA,” said Yash Trivedi, founder and CEO of YOUAE Mortgages, an advisory firm.  “This practice will no longer be permissible from this week. All payments must be made in the name of the seller as stated in the property’s title deed.”

Overseas buyers keep getting into UAE property

Where possible, authorities in the UAE are adding new layers of transparency in the processing of transactions and the payments related to these. In this case, the identity of the seller comes into play front and center to get the deal cleared. In short, no proxies allowed.

A PoA can still act on behalf of the seller - attested by the local courts during both the buying and selling processes

According to a property market source, “Whenever a POA was assigned earlier, it was not as smooth a process. You had to get the POA documents verified by the Ministry of Foreign Affairs (MoFA), and there would be more details to go through if the address or some other detail has changed.

“What the Dubai Land Department is saying through the new initiative is for the overseas-based property seller to assign a POA status directly to the courts in Dubai. This can even be done through Zoom.”

Make payments to title deed holder

According to Trivedi, “This change applies specifically to clients who wish to sell their properties and want the payment to be made through the POA.

"A POA can still act on behalf of the seller - attested by the local courts during both the buying and selling processes.

“The only stipulation is that payments must be made in accordance with the name on the Title Deed.”