What All You Should Know About Rent-To-Own Scheme In Dubai?
A volatile property market in UAE especially in the times of global pandemic, buyers are searching for the best possible alternatives in terms of buying or renting the property either residential or commercial.
One of such schemes available to buyers in UAE is rent to own scheme which allows buyers to enter their property without having to pay the initial down payment. The property Lawyers of Dubai considering the popularity the scheme has attained in the past couple of months will enlighten our readers about this scheme.
Let’s Define R-T-O
Rent to own property scheme is a contingent agreement for a property including a rental and a future deal understanding, at a foreordained price and in a defined time period. Each scheme for rent-to-own is extraordinary for every case, basically, it’s an understanding between a purchaser and the developer of the property. The scheme allows the buyer to pay the down payment as an amount equivalent to its rent. In addition, the scheme allows the purchaser to pay the rent as well as to save the amount for a down payment of the property.
Different plans are on a more extended in time, for example, 20 years. In the current scheme, the buyer is supposed to pay a minimum down payment of as less than as 5 percent and as opposed to registering the property for mortgage, the buyer can pay off the regular instalment to the developer until its completed paid off. A forthright instalment is required, however significantly lower than the 25% required to make preserve a mortgage along with additional costs. Additionally, upon completion of the contracted time period, the buyer has the opportunity to decide whether he wishes to purchase the property or to terminate the agreement.
Technically, this scheme involves two different type of agreements that can be signed with the buyer, wherein primarily the buyer can have an option to purchase the property. Under the said agreement, buyer is obliged to pay an “option fee” decided mutually between both the parties in exchange as buyer option to purchase the property. However, if the buyer desires to opt out, he shall loose the initial option fees paid to the developer.
On the other hand, the developer offers another agreement for purchase, wherein both the parties mutually decide the purchase price of the property or to decide a price for a future date.
The current scheme is approved by Dubai Land Department (DLD) and is registered before the said authority and a special tittle deed is issued to the purchaser of the property. This scheme was preferred by several residents in the country over mortgages as under mortgages the buyer is obliged to deposit 25% of the initial down payment. It was considered as the most affordable way of renting your property with an option to purchase it later. Property lawyers of Dubai have assisted innumerable clients in drafting and finalising agreements under rent-to-own scheme and registering the property before the land department of Dubai. Henceforth, it is always advised to approach Best Lawyers of Dubai in case you desire to rent-your own property.
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ABOUT THE AUTHOR
Dr. Hassan Elhais, along with his team of legal consultants and prominent local lawyers across the UAE, has made a name for himself as a renowned specialist in the fields of civil law, construction law, banking law, criminal law, family law, inheritance law, and arbitration.