Verifying Property Ownership & Encumbrances – Practical Checks That Prevent Deal Failures

Property transactions in Dubai often fall apart late, not because of price or timing, but because the basics were never fully checked against the local system. Ownership is assumed. Liens are mentioned casually. A POA is waved through. Then the Dubai Land Department (DLD) pauses the transfer, or a bank credit team refuses to issue final approval, and the deal stalls. This article looks at how careful verification at the start avoids those problems and keeps transactions moving.

Why early verification saves time and cost

Most delayed or failed transactions that we review usually come down to assumptions made early on. Commercial terms are agreed quickly, often based on a reservation form, and verification is left until just before transfer. That approach only works if the title record, financing status and developer position are all clean but in many cases they aren’t.

If any element doesn’t align with the registered record at the point of transfer, the transaction simply doesn’t proceed. Early verification confirms who has the legal right to sell or charge the property, and what registered or practical limits sit on that right. That way buyers, lenders and partners know where issues may arise before funds are committed.

Confirming the registered owner under Dubai records

The first check is always the title deed issued by the DLD. Marketing material, reservation forms or historic sale contracts have no standing if they differ from the title record.

If the seller isn’t the registered owner, the transaction can’t proceed without a formal transfer first. We often see situations where a property has been sold on assignment but the title was never updated, or where inheritance steps were started but not completed. These issues must be resolved before any binding sale.

It’s also essential to confirm whether the property is owned by an individual, a UAE company, an offshore entity or a free zone company. Each category brings different approval and signing requirements, and those differences become critical at the transfer desk.

Authority to sign and powers of attorney

Dubai accepts powers of attorney, but only if they meet specific conditions. They must be notarised, translated into Arabic and, if issued abroad, properly legalised for UAE use. Even then, the wording is closely scrutinised

A power that allows management or leasing may not allow sale or mortgage. Some older powers also predate current Land Department practices and are rejected and unfortunately, these issues often surface only when parties attend the trustee office for transfer, which is the worst possible time to discover them.

The same applies to corporate owners. Board resolutions must match the exact transaction, and the signatory must be properly authorised under the company’s constitutional documents. Free zone entities add another layer, as some zones require their own approvals before a sale can proceed.

Understanding encumbrances under Dubai law

An encumbrance is any registered or effective right that limits transfer or financing. Mortgages are the most common example, but they aren’t the only one.

Registered mortgages appear clearly on the title deed, but the release process is critical. Banks require full settlement and issue a release letter that must be uploaded into the Land Department system before transfer. Timing here is precise. If the release is not correctly registered, the system blocks the transaction.

Other encumbrances include developer restrictions on resale, especially for off plan or recently completed units, and notices linked to service charge disputes. These may not always be obvious from a quick review but can stop a transfer on the day.

Reading title deeds carefully

Title deeds are concise, but that doesn’t mean they’re simple. Notes and annotations often appear in Arabic legal shorthand. A short line may indicate an active mortgage, a pending release or a developer condition tied to the master community.

It’s also important to distinguish between a title deed and an Oqood registration. Oqood reflects an off plan registration and doesn’t grant the same rights as a completed title. Confusing the two leads to serious misunderstandings about what can be sold or mortgaged.

Developer and escrow related checks

For off plan and recently completed properties, the project must be registered with the DLD, and payments must be flowing through an approved escrow account under the supervision of Real Estate Regulatory Agency.

We regularly see buyers assume that a unit can be freely sold once most instalments are paid but many developers restrict resale until a certain percentage is paid or even until completion.

Off register risks

Even where developer and escrow points are clear, practical issues can still surface outside the register. Informal occupation arrangements, unresolved tenant positions or outstanding service charges are common causes of delay.

Service charge clearance is particularly important. Without a no objection certificate from the developer or owners association, transfer can’t proceed. Identifying arrears early avoids last minute payment disputes and rushed negotiations at the transfer stage.

Aligning verification with UAE bank requirements

These same issues tend to surface again once a lender becomes involved. Banks apply strict criteria when lending against property, and their legal reviews follow Land Department standards while adding further conditions of their own. If verification is aligned with those expectations from the outset, approvals tend to move far more smoothly.

Lenders look closely at clean title, confirmed mortgage releases and compliant powers of attorney. They also examine the borrower’s authority and the source of funds. When these points are addressed early, document requests reduce and credit processes are less likely to stall. 

Timing the checks in Dubai transactions

The best time to verify ownership and encumbrances is before signing an MOU. That allows deal terms to reflect reality. Price adjustments, payment mechanics and completion timelines can be set sensibly.

Leaving verification until after signing often leads to amendment requests and strained negotiations.

Why deals still fail late

Most late stage failures in Dubai come down to predictable issues. The seller can’t produce a valid POA. A mortgage release is delayed. A developer refuses to issue a no objection certificate. None of these are unusual, but all are manageable if identified early.

The cost of early verification is small compared to the cost of a collapsed transaction, especially where deposits are tied up. More importantly, it preserves trust between parties.

How Prestige Portfolios can help

Prestige Portfolios is an award-winning, locally owned real estate firm, certified by RERA and regulated by the DED, working with international families, investors and family offices active in Dubai’s prime and luxury property market.

We support buyers and sellers by carrying out early, practical checks that reduce execution risk. That includes verifying Dubai Land Department title records, confirming authority to sell, reviewing mortgages and restrictions and coordinating the clearance steps required before transfer.

Where transactions involve lenders or wider holding structures, we coordinate with legal and tax advisers so documentation, approvals and timing align with UAE practice. This helps avoid last minute delays and failed transfers.

To discuss a current transaction or review how ownership and encumbrance checks can protect your deal, contact info@prestigeportfolios.com