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Standardised contracts for important real estate transactions involving buyers, sellers and agents have become mandatory. The contract forms can be downloaded from the Dubai Land Department (DLD) website and filled out with detailed information about the property and the financial transactions involved in the deal. A unified contract contains most of the relevant details about the property transaction, leaving not much scope for hidden charges and making the process more transparent.
Once an agent is employed to act on a seller’s behalf, both parties will need to complete and sign Form A. The contract lists the names of the seller and broker, and the property details, with mentions about the broker’s fees and commissions. A property agent can only list the seller’s property when Form A has been completed. There is more transparency as both parties are made aware of the financial costs involved. The contract also mentions if only a solitary agent has been assigned to get a buyer, or if it is being marketed and listed with more than one agent.
Form B is a contract between a buyer and a broker. Like Form A, details of the parties involved in the transaction are mentioned along with the commissions payable to the broker. A clear mention of the charges to be paid by the broker ensures there are no hidden charges.
Form U is a termination notice which the seller can give to the agent or the buyer to the agent. It is essential that a blank Form U is provided to the seller and the buyer during the signing of Forms A and B. When terminating a contract, a seven-day notice has to be provided by the seller and the buyer along with reasons for cancelling the contract.
Form F is a contract between a seller and a buyer containing details about the property. Experts feel that a detailed sales purchase agreement (SPA) specifying the commercial terms between the parties is essential to complement Form F.
The hard copies of all the forms need to be signed to be registered at the Real Estate Registry.
• Forms A and B can be done in three formats: exclusive, sole and open listed
• It is mandatory for Form F to be accompanied by sales purchase agreement
• Form U is used by the buyer or the seller for the termination of contracts
You may also like to read this Guide to transfer of property ownership.
Source: S. Dhar, Special to Properties
The writer is a freelancer