Power of Attorney Guide for Dubai Property Sales

What is a Power of Attorney

A Power of Attorney is a legal instrument where one person, the Principal, grants another person, the Agent, the authority to perform specific actions on their behalf. In the context of Dubai real estate, this means the Agent can manage the entire sale process, from signing documents to handling mortgage-related matters. The scope of this authority can be broad (a General PoA) or restricted to a single transaction (a Special PoA). For property sales, a Special PoA is almost always required.

This document is particularly vital for the many international investors in Dubai's property market who cannot be present for every step of a transaction. A PoA becomes legally effective once it is notarised and attested according to UAE regulations. It can be revoked at any time by the Principal and automatically becomes void upon their death or loss of mental capacity.

Who Can Be Appointed as an Agent

A property owner can grant a PoA to any trustworthy individual, though it is most commonly given to immediate family members, friends, or a legal professional. However, it is crucial to choose an agent with care, as they will be granted significant control over your asset.

It is important to note a key restriction imposed by the Dubai Land Department (DLD): an individual employed by a real estate company cannot act as an Agent for buying or selling property. This regulation was introduced to prevent conflicts of interest and protect sellers from potential fraud or negligence, ensuring the Agent's focus remains solely on the Principal's best interests.

The Process for Creating a Valid PoA

To be legally recognised for a property sale in Dubai, a PoA must follow a strict validation process.

• Drafting the Document: The PoA must be drafted in Arabic or be bilingual (English and Arabic). If written only in English, a certified legal translation into Arabic is required. In case of any discrepancies, the Arabic version will prevail.
• Specificity is Key: For selling property, the PoA must be a Special PoA. It needs to clearly state the specific property to be sold, including details like the unit number, building name, plot number, and community, exactly as they appear on the Title Deed.
• Notarisation and Attestation:
  • If created within the UAE: The PoA must be notarised by a Dubai Notary Public, which is part of the Dubai Courts.
  • If created outside the UAE: The document must first be signed before a Notary Public in the country of origin. It then needs to be legalised at the UAE Embassy in that country and finally attested by the UAE's Ministry of Foreign Affairs upon its arrival in Dubai.

What an Agent Can and Cannot Do

While a PoA grants significant authority, its powers are not unlimited, especially concerning property sales, where the DLD imposes strict rules to protect owners.

An agent with a valid PoA can represent the seller in legal disputes, manage the property, arrange for repairs, and handle mortgage-related matters. They can save the seller significant time and money by avoiding international travel and navigating the complex procedures with government authorities and financial institutions.

However, there are critical limitations:

• Receiving Sales Proceeds: The DLD prohibits an agent from receiving the proceeds from a property sale into their personal bank account, even if the PoA explicitly allows it. Funds must be transferred directly to the Principal's account. An exception may be granted for immediate family members, but this requires special approval from the DLD and proof of the relationship (e.g., a marriage or birth certificate).
• Gifting Property: An agent cannot gift a property using a general PoA. The document must specifically state the Principal's intention to transfer the property as a gift (hiba) for the DLD to permit the transaction.
• Validity Period: A PoA for real estate transactions is typically valid for only two years from the date it is notarised. If it expires, it can be revalidated at the Dubai Courts.

How the DLD Protects Sellers

The Dubai Land Department has implemented several measures to safeguard property owners who use a PoA for sales transactions. These regulations are designed to prevent fraud and ensure the Principal's interests are protected throughout the process.

The requirement for a Special PoA, which specifies the exact property, ensures that an agent cannot sell any other asset owned by the Principal. Furthermore, on the day of the property transfer, the DLD retains the original PoA document. This action prevents the agent from using the same PoA for any future transactions, adding a final layer of security for the seller once the deal is complete.

Final Thoughts

Using a Power of Attorney is a practical and often necessary tool for selling property in Dubai, especially for overseas owners. It provides a way to manage complex transactions efficiently without being physically present. However, the authority granted by a PoA is significant, and sellers must exercise caution. By understanding the legal requirements, choosing a trustworthy agent, and being aware of the limitations set by the DLD, property owners can leverage a PoA to ensure a smooth, secure, and successful sale.