Mastering Form F: Insights for Property Transactions in the UAE

A key document in this process is Form F, also known as the Memorandum of Understanding (MoU). Form F is a pivotal contract that formalizes the sale of property, establishing a framework for the transaction and safeguarding the interests of both the buyer and the seller. To gain a comprehensive understanding of Form F and its importance in Dubai’s real estate landscape, continue reading. In Dubai, every real estate transaction requires the preparation and signing of specific documents to ensure the protection of all parties involved. These documents are developed and enforced by the Real Estate Regulatory Agency (RERA); the body responsible for regulating the real estate market in the emirate.

WHAT DOES FORM F ENTAIL?

Form F is a critical document in the Dubai real estate market, officially recognized as the Property Sales Contract between the seller and the buyer. This document becomes essential once a buyer selects a property and agrees on the price and terms with the seller. The Property Sales Contract (Form F) is then prepared by the brokers managing the transaction. It is important to note that Form F must be drafted in both English and Arabic. In cases of discrepancies between the two versions, the Arabic version will take precedence,
ensuring compliance with local regulatory standards. The validity of Form F depends on it being duly signed by both parties, with each signature dated and certified by the respective brokers. After the contract is executed, both parties have a 30-day period to gather the necessary documents and complete the registration process at the Dubai Land Department. If registration is not completed within this period, the sales contract becomes void on the 31st day, necessitating the drafting of a new contract to proceed with the transaction.

MAKING A DEPOSIT

During the execution of the sales contract (Form F), it is customary for the buyer to provide a deposit, typically representing 10% of the total purchase price of the property, unless otherwise agreed. The broker managing the transaction is responsible for holding the document that verifies the deposit transfer. If the transaction proceeds without complications, the deposit will be refunded to the buyer. Conversely, if the buyer decides not to proceed with the purchase or encounters issues that prevent the sale’s completion, the seller is entitled to retain the deposit.
However, if the seller withdraws from the agreement, they must refund the buyer an amount equal to twice the deposit, compensating the buyer for any inconvenience.

CONTENTS OF FORM F

Form F is a six-page document divided into the following sections:

Page One
• Property Details: Includes information on the property’s location, type, land plot number, project name, title deed number, area, current use, sale type (cash, mortgage, or installment), and whether a No Objection Certificate from the developer is provided.
• Property Financials: Covers the agreed sales price, original purchase price, deposit amount, payable amount, and service charges for maintenance.
• Mortgage Information: Details the buyer’s mortgage loan, including the bank’s name, loan amount, agreement validity, and whether a No Objection Certificate from the bank is available.
• Tenancy Contract Information: Provides an overview of the tenancy contract if the property is currently rented.

Page Two
• Property Owner’s Details: Captures the seller’s personal information, including full name, ID card and passport numbers (with expiration dates), nationality, and contact details (mobile number, addresses, fax number, if applicable, and email address).
• Buyer’s Details: Mirrors the seller’s information but for the buyer, including full name, ID card and passport numbers, nationality, and contact details.

Pages Three, Four, and Five
• Seller’s Responsibilities: The seller must confirm ownership or legal representation, provide necessary documents, and ensure the property is free
from disputes, mortgages, or claims. The property must be transferred promptly after the buyer takes possession.
• Buyer’s Responsibilities: The buyer must inspect and accept the property as is, provide a deposit cheque, and pay the remaining balance using an approved method.
• Deposit and Payment Terms: The deposit cheque is held in trust and cannot be cashed without written agreement from both parties. A 4% commission of the property value, payable to the Dubai Land Department, must be shared between the buyer and seller as agreed.
• Financial Obligations: If the buyer fails to pay on time, the seller can cancel the contract and retain the deposit. If the seller delays transferring the property, they must compensate the buyer for the delay.

Page Six

Contains only the contract number for reference and identification.

LEGAL IMPLICATIONS AND RISKS

Understanding Form F also involves recognizing potential legal implications and risks. Disputes or breaches of contract may arise, which could necessitate legal intervention. Ensuring that Form F is accurately completed and compliant with regulations can help mitigate these risks and provide remedies in case of issues.

ROLE OF THE BROKER

The broker plays a crucial role in ensuring a smooth transaction. They are responsible for verifying that all documents are accurate, assisting with compliance to RERA regulations, and guiding both parties through the registration process. Their expertise is vital for avoiding common pitfalls and ensuring that the transaction proceeds efficiently.

RECENT UPDATES AND AMENDMENTS

It is essential to stay informed about recent updates or amendments to Form F or related regulations. Changes in the legal landscape can impact transactions, so consulting the latest guidelines and legal advice is crucial.

CONCLUSION

The sales contract, commonly known as Form F and issued by the Dubai Land Department, is a critical component of property transactions in Dubai. Accuracy and clarity in this document are essential for a successful transaction. To ensure that all parties are well-informed and potential issues are addressed, it is crucial for the broker to read the agreement aloud to both the buyer and the seller. This practice ensures that each clause is clearly understood and that any questions or concerns are promptly resolved, facilitating a smoother and more transparent transaction process.

Published by Rajja Kaleem