Dubai Real Estate: How can investors obtain title deeds for their properties?

Many owners of ready properties in Dubai do not hold title deeds to their properties, often even for years after the hand-over.  Absence of title deeds, however, is an issue not to be underestimated.  Without a title deed, the purchaser of the property has no binding and clear proof of ownership.
Title deed refers to a legal document, registered with the relevant government authority, that shows one’s right of ownership to a property.  The purpose of title deed is to ensure that the property is registered to the rightful owner.  It also serves to ensure that the property has clear title, i.e. that it is not owned by anyone else or encumbered by any other interests.  This is why it is important that titled deeds are maintained in a centralized government database.
A proper title deed registry should include the history of all owners to that property and any superseding right-holders.  For example, if a property is mortgaged by a bank, that bank’s interest will be recorded, in addition to the owner’s name.  This way, when the owner sells the property, the new purchaser will know that before the seller is paid, the bank’s mortgage must be settled.
In Dubai, title deeds are supposed to be issued by the Dubai Land Department (DLD). But the system has been flawed. Hundreds of homes in Dubai, which have been handed-over for more than a year, still do not have title deeds.
The DLD continues to promise owners that it will begin issuing title deeds in a few months.  But those few months keep getting extended and soon become years.
The DLD blames developers for their alleged failure to produce documents necessary to issue title deeds.  But it is unlikely that developers are the only ones to blame.  After all, the DLD, being the regulatory agency, has the authority to penalize developers and enforce compliance.
A further complication is that the criteria for issuing title deeds in Dubai are unknown.  Some of the criteria, according to the DLD, are that developers confirm that the property is properly completed and purchasers have fulfilled their obligations. But what documents or approvals are required to support those disclosures is unknown.  What is known, however, is that developers’ participation and cooperation in the process is imperative.  So, if developers refuse to do so, purchasers remain without proof of ownership, although they have fully paid.
Contrary to popular belief, sales and purchase agreement (“SPA”) and receipts of payment are not proof of ownership. They are simply evidence of a contractual arrangement between the developer and the owner.  Neither are letters from the developers certifying that the owner has complied with all obligations.
Absence of title deeds presents a series of problems.  One problem is that the property may be uninsurable.  Two, it may be more challenging to sell it.  Three, in the event the property is rented and the renter defaults, the owner may not be able to enforce his rights against the renter because to file a case in the Rent Committee requires proof of ownership.


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