Real Estate Terms You Should Know Before Buying a Property in Dubai

Real Estate Terms You Should Know Before Buying a Property in Dubai

Introduction

If looking to buy property in Dubai, understand that this is not only a professional, financial decision. It’s legal, procedural, and tactical as well. Dubai’s real estate system comes with its own set of rules, processes, and jargon that you will need to learn, but don’t allow the terminology to intimidate you. 

At GLLIT, we think that wise decisions begin with good understanding. Whether you’re buying your first home, purchasing for rental yields, or entering the Dubai real estate market as an expatriate buyer, we’ve put together a helpful glossary to help you make informed decisions with confidence.


Relevant real estate terms and how they apply to Dubai’s property market

  1. Freehold: A freehold is a property that gives you outright ownership of the building, as well as the land it’s built on. Foreign buyers can only purchase freehold property in designated areas set by the government, such as Downtown, Dubai Marina, or Jumeirah Village Circle. It is the most attractive form of property holding for investors looking for the utmost control over the asset, which encompasses the power to rent, transfer, or leave for inheritance.
  2. Leasehold: A leasehold property allows you to buy a unit, but only for a set number of years, often 30 to 99 years. The land stays in the ownership of the freeholder (often the developer or state). At the end of the lease term, possession of the property reverts to the owner unless the lease is extended. Less common in Dubai today, this model may still be found in some legacy communities or buildings.
  3. Title Deed: The title deed is your formal ownership documentation, signed by the Dubai Land Department (DLD). Without it, you can’t sell, mortgage, or transfer the property. It’s essentially your property’s birth certificate, and without it, you don’t own the property in terms of legal ownership. It features the property owner’s name, plot number, unit number, and the date of registration.
  4. Ejari: Ejari is the mandatory, online system to register rental contracts in Dubai. Every time you rent a flat, a studio, or a villa, the rental agreement must be uploaded through Ejari to be legally valid. It protects the rights of both landlords and tenants, and is often required when establishing utilities or bank accounts, or renewing visas.
  5. Dubai Land Department (DLD): The DLD is the state agency responsible for supervising all real estate transactions in Dubai. From offering title deeds and regulating developers to documenting sales transactions and maintaining escrow accounts, they ensure transparency and adherence within the Dubai real estate sector.
  6. Real Estate Regulatory Agency (RERA): RERA is a division of the DLD that regulates property developers, brokers, and property management companies. They help establish the rules that govern ethical buying, renting, and selling, ensuring a high standard of practice across the Dubai property market. If you are dealing through an agent or brokerage, ensure that they are RERA-registered at all times.
  7. Sales and Purchase Agreement (SPA): The SPA is the central buyer-seller legal agreement. Payment price, schedule, completion date, and penalties for default, among other crucial terms, are outlined in the agreement. Once signed, it becomes legally enforceable. You should read this carefully at all times, and if you are in doubt, you should obtain a qualified real estate attorney. In Dubai, the impact of the SPA is quite significant to both off-plan and ready property transactions.
  8. Memorandum of Understanding (MOU): A pre-agreement that is frequently signed before the SPA is the MOU. It outlines the terms that have been negotiated, the purchase price and deposit, and demonstrates that both buyer and seller are committed to completing the deal. Typically, the buyer will provide a 10% refundable deposit in the form of earnest money that goes into escrow. Although not as legally binding as the SPA, it is very much respected. 
  9. Off-Plan Real Estate: An off-plan property refers to properties that have either not been built yet or properties that are still in development. Project owners generally pay for the project in increments during construction. With more affordable prices and convenient payment schedules, off-plan options attract many investors, but there are risks involved, such as projects being delayed or the developer changing certain aspects of the development. Before signing, make sure you verify that the developer is legitimate and that the project has been approved.
  10. Oqood: Oqood is a system that regulates and organizes electronic real estate registration. This is issued by the Dubai Land Department (DLD) to purchasers of off-plan properties, which is basically an electronic register of the property. It is proof of ownership and protects buyers until they receive the final title deed. Consider it your short-range title deed. This is immensely helpful if you’re intending to sell off-plan units before they’ve been delivered.
  11. Escrow Account: This is the account in which all payments for any off-plan properties are to be deposited in Dubai, which is regulated by the DLD. This ensures that your funds are used only for the construction of the specific project you’re investing in. It is a crucial safeguard for buyers in Dubai’s real estate market. 
  12. Down Payment: This is the one-time cost you pay at the purchase of property, usually 10-20% of the purchase price. The remaining value is typically covered by either taking out a bank loan or by paying in installments. With off-plan properties, developers are known for giving you flexibility with lower down payment requirements, just ensure you’re keeping an eye on milestones and payment due dates. 
  13. Loan-to-value (LTV): This shows what share of the value of the property the bank will lend you. Let’s say a property is AED 1 million and the LTV is 75%. Your first mortgage will be worth AED 750,000, and you will have to cover the rest of the balance (AED 250,000). For expats, there is an LTV limit of 75% maximum, while UAE nationals can go up to 80% LTV on their first property valued under AED 5 million.
  14. Return on Investment (ROI): ROI is a crucial metric for any investor. It assesses how profitable a property is by comparing rental income to the purchase cost. Areas like JVC, International City, and Dubai South are recognized for their high rental yields, with ROIs ranging from 6% to 9%, making them attractive options to buy property.
  15. Capital Appreciation: This term refers to the increase in property value over time. For example, a unit purchased for AED 900,000 could be valued at AED 1.2 million in three years. Smart investors looking at property investment options in Dubai often seek out appreciation hotspots like Dubai Hills Estate, Business Bay, and emerging areas such as Expo City.
  16. Build-Up Area: It includes all bedrooms, kitchens, bathrooms, balconies, and walls. BUA is used to determine the price per square foot and differs from the carpet area (that is net usable area). Understand BUA to avoid hidden costs when buying property or making investments.
  17. Service Charges: These are yearly or monthly charges that owners must pay to maintain the structure, cleaning, security, maintenance of the common areas, and installation of facilities. So don’t underestimate the impact they could have on your ultimate ROI. High-end neighborhoods like Downtown can and do impose far higher per-unit service costs than their low-cost counterparts, so never fail to run this expense line item through careful scrutiny.
  18. Snagging: Before moving into a property, snagging is the process of going through a unit and identifying issues like cracks, chipped paint, broken plumbing, etc. You can get help from professional snagging companies to inspect a unit before handover and ensure it meets all requirements.

Why knowing these terms matters

There are different terms to know in every stage of your property-buying journey: from viewing a home and making an offer to attending a closing and finally enjoying homeownership. If you know the language, you won’t get confused or run the risk of getting transactions delayed or incurring unexpected costs.

As you explore where and how to buy property, being familiar with these terms helps you:

  • Understand legal documentation
  • Ask the right questions
  • Identify warning signs as soon as possible
  • Evaluate offers accurately
  • Maximize return on investment while minimizing risk

Conclusion

Buying property in Dubai requires more than just a budget—it requires knowledge. From understanding escrow accounts to decoding service charges, every term in this guide helps you make informed, confident decisions.

At GLLIT, we don’t just help you find the right property—we help you understand it. With commission-free deals, real-time insights, and expert support, your Dubai property journey is in safe hands.

Let knowledge lead, and let GLLIT guide.

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