Buying property through a mortgage in the secondary market can be tricky, especially when several buyers, like family members or a group, are involved. It’s important to understand the impact of adding multiple names to the Memorandum of Understanding (MOU) or the Unified Contract F in DLD, and eventually to the new title deed, especially if not everyone is applying for the mortgage. This article outlines key factors to consider and potential challenges you may encounter.
Verify Bank Conditions Before Adding Multiple Buyers to the MOU/Unified Contract F:
If you’re purchasing property as a family or group, it’s crucial to check with your mortgage advisor and bank before proceeding. Different banks have varying rules about who can be listed on the MOU and title deed. Some banks allow only the mortgage applicant’s name, while others may allow the inclusion of family members under specific conditions, like limiting their ownership percentage.
Skipping this step could lead to delays and added costs. To avoid these issues, it’s best to:
- Consult Your Mortgage Advisor Early: Before instructing your real estate agent to add multiple names to the MOU, check with your mortgage advisor about the bank’s policy.
- Obtain Written Confirmation from the Bank: Get a clear written statement from the bank about their policy on adding names to the MOU and title deed.
- Understand Bank-Specific Conditions: Policies vary between banks, so what works for one bank might not work for another.
Gifting as a Post-Transfer Solution – How fäm Conveyancing Can Help!
If your bank doesn’t allow adding multiple names to the title deed during the mortgage process, you can still add family members later through a property gifting process. This can be done after the property transfer, where you can add your spouse or children to the title deed.
As outlined in our previous articles, the Dubai Land Department (DLD) charges a reduced transfer fee of just 0.125% of the property’s value when gifting to first-degree relatives. Our conveyancing team can guide you through this process to ensure everything is done smoothly.
Advice for Buyers – Be Aware of Bank Requirements!
It’s essential for buyers to understand the terms set by their agents regarding property transactions. If the seller insists that the selling price be issued under a third party’s name, even with a Power of Attorney (POA), this needs to be communicated clearly to the mortgage advisor and bank before signing the MOU.
Some banks may have strict rules against issuing cheques to third parties, which could complicate the process and require changing mortgage providers. Always verify the feasibility of such arrangements with all parties involved to avoid unexpected hurdles during the transaction.
For buyers looking to add multiple names to their property purchase, it’s crucial to check bank requirements and get clear approval before finalizing any documents. A proactive approach can help avoid delays and ensure a smoother process. If your bank doesn’t permit multiple names during the mortgage process, consider using the post-transfer gifting option to adjust the ownership structure.
