What to take into your next appraisal
- Distinguish the published registration service fee from the cost split agreed between parties.
- Separate refundable deposits from completed acquisition cost.
- Place acquisition cash before construction debt unless the facility explicitly funds it.
Read the sale service and the contract together
DLD’s Property Sale Registration service lists a seller fee of 2% and a buyer fee of 2% of sale value, with additional certificate, map and service charges. It also identifies identity documents and an electronic developer NOC for freehold areas. This is a service description, not a substitute for the transaction documents or a complete closing statement.
The commercial agreement may allocate costs differently between buyer and seller. Record the legal fee basis and the negotiated reimbursement separately. Ask the closing professional to confirm the route, applicable charges and any mortgage or company-structure issues before using a final cash number.
Separate deposit, completion and enabling costs
Create rows for the initial deposit, further instalments, balance on transfer, registration, brokerage, legal diligence and any master-developer or infrastructure obligations. Give each row a due date and a condition. An escrowed or refundable deposit may be cash committed without yet being an expense.
Do not automatically add a refundable deposit on top of the full purchase price. It usually forms part of the consideration if the deal completes. In a downside case, explicitly state whether it is recovered, forfeited or remains disputed.
Worked example: a hypothetical closing statement
Assume AED 20m consideration, a 10% deposit already paid and an agreement under which the buyer bears the entire assumed 4% registration amount. Professional, service and other confirmed charges are represented by an illustrative AED 150,000 allowance. This is a modelling assumption, not a fee quote.
The closing payment is AED 18.95m and cumulative acquisition cash is AED 20.95m. Applying the 4% amount to both the deposit and the full consideration would overstate the fee. Adding the deposit again to total consideration would overstate land cost by AED 2m.
| Cash item | Amount | Timing |
|---|---|---|
| Deposit credited to consideration | AED 2.00m | Signing |
| Remaining consideration | AED 18.00m | Transfer |
| Buyer-funded registration assumption | AED 0.80m | Transfer |
| Other acquisition allowance | AED 0.15m | Transfer |
| Cumulative acquisition cash | AED 20.95m | Signing through transfer |
Make the conditions visible in the programme
A satisfactory title check does not establish that a preferred design is permitted. Obtain the plot conditions, applicable authority confirmation, access and utility position and any development deadline. Link outstanding conditions to a decision date before the acquisition becomes unconditional.
Where debt becomes available only after transfer, approvals or a minimum equity contribution, fund the earlier cash from an identified source. The acquisition can be profitable on paper and still fail because the completion balance arrives before the facility is drawable.
Test the cost of waiting and the cost of walking away
Compare timely transfer with a delayed transfer and a failed-condition scenario. Include extension payments, adviser costs, funding carry and the evidenced treatment of deposits. Do not assume that every delay pushes every payment: a contractual completion date may remain fixed.
The investment paper should show total land-related cash, the largest single payment, its funding source and the next irreversible commitment. That is more useful than one acquisition-cost percentage.
Sources and further reading
- Property Sale Registration Dubai Land Department
- Valuation of development property RICS
Published by Feasly. How we prepare our guides. Suggest a correction.
