Everything About Sale of Mortgaged Property in Dubai

Selling a mortgaged property in Dubai with a mortgage might seem complex, but fear not—our guide simplifies the process. We’ve covered everything from finding a buyer to navigating the Dubai Land Department (DLD) steps. Whether it’s a ready or off-plan property, learn about the necessary procedures, associated fees, and benefits.

Can You Sell a Property in Dubai with a Mortgage?

Yes, you can sell a property in Dubai with a mortgage. After finding a buyer, follow the steps listed by the Dubai Land Department and later in this article. 

Procedure for Selling a Mortgaged Property in Dubai

To sell a mortgaged property in Dubai start with the following:

• • Securing a buyer and signing a Memorandum of Understanding (MOU).
  • Obtain a liability letter from your bank indicating the remaining mortgage amount, and acquire a No Objection Certificate (NOC) from the property’s developer.
  • Visit a Dubai Land Department (DLD) office to block the property under the buyer’s name, ensuring protection and restricting further sale.
  • Submit the buyer’s cheque to the bank, clearing the seller’s mortgage, and obtaining a clearance letter and original title deed.
  • Complete the property transfer at the DLD, releasing the seller’s mortgage and issuing a new title deed in the buyer’s name.
  • Note that the process may vary if the buyer obtains a mortgage, and fees include an early settlement fee, blocking charges, a mortgage release fee, and an NOC fee.

Sell Off-plan for Mortgaged Property in Dubai 

When you want to sell a property in Dubai that is still under mortgage and has yet to be fully paid off, there’s a process to follow. First, find a buyer and sign Form F (Memorandum of Understanding) that outlines all the sale details. Then, you need to go through a few steps:

• • Ask your bank for a liability letter, which tells you how much is left to pay on your mortgage.
  • Get an NOC from the property’s developer. This confirms that there are no unpaid charges, and the developer has no issues with the sale.
  • Property blocking is done to protect the buyer. You, the buyer, and others involved must visit the Dubai Land Department to block the property in the buyer’s name. This ensures the buyer can clear your mortgage, and you can’t sell the property to anyone else.
  • Submit the buyer’s cheque to the bank. Once your mortgage is paid off, the bank gives you a clearance letter, and the original title deed goes to the buyer.
  • Both parties go to the Dubai Land Department to transfer ownership. The seller’s mortgage is released, and a new title deed is issued in the buyer’s name.

Note: The process might take longer if the buyer gets a mortgage. In this case, property blocking may not be needed. For off-plan properties, check with the developer about any specific rules, and be aware of potential differences in fees compared to ready properties.

Fees of Selling a Mortgage Property in Dubai

When you sell a property in Dubai with a mortgage, there are different fees you need to consider. 

• • Firstly, there’s an early settlement fee, either 1% of the remaining mortgage or AED 10,000, whichever is less. 
  • Then, there are blocking charges, starting at AED 1000, to secure the property while the buyer sorts out the mortgage. 
  • You also pay a mortgage release fee, about AED 1,290 for regular mortgages and AED 1,560 for Islamic mortgages, to clear your existing mortgage. 
  • This fee may include extra charges from the registration trustee. 
  • The No Objection Certificate (NOC) fee, ranging from AED 500 to AED 5000, depends on the developer and is usually covered by the seller. 

Conclusion

In short, selling a property with a mortgage in Dubai needs careful planning, but it’s doable if you follow the right steps. You have to find potential buyers and follow the rules set by the Dubai Land Department closely. Remember, there are different fees like early settlement, blocking charges, mortgage release, and NOC fees that you need to think about before making decisions. But even with these costs, selling a mortgaged property can be attractive because it’s flexible and can bring in profits. Getting help from professionals can make the whole process smoother and less complicated.

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