Resale policies and transfer fees

Resale properties have their own set of rules and associated costs; these are important for both the buyer and seller to know. There are markets with mandated transfer charges for every transfer of ownership. For example, the normal transfer charge in Dubai can amount to 4% and this can be paid to the Dubai Land Department. There could be resale terms set down by the developer that would not allow the resale of an off-plan property or sales commissions charged by the agent for resale properties. By being aware of the resale rules and associated expenses, you can plan properly for the transfer, and there will not be any unexpected expenses at the last minute. This article will highlight resale rules and terms, who pays the transfer fees, common additional expenses for resale properties, and easy checks for safeguarding your hard-earned money.

Typical resale policies that developers and regulators use

Many developers impose resale rules, particularly for off‑plan units. Typical policies bar resale until a certain payment milestone is reached. Some developers require the owner to obtain a No Objection Certificate (NOC) prior to any transfer. NOCs usually have administrative fees and must be issued by the developer before the land registry will record a transfer. Regulators may also require that the property be duly registered or that escrow requirements be met before a resale can be effected. These rules are intended to protect the project and existing buyers against speculative flip sales that might jeopardize construction financing or market stability. Always ask for a copy of the developer's resale policy and any NOC fees in advance of listing a unit for sale.

Transfer fees: who pays and how much

A transfer fee will apply when there is an ownership transfer. In Dubai, the Dubai Land Department transfer fee will always amount to 4% of the sales value, but this will depend on local customs on who will pay the fee or how it will be divided. However, apart from this transfer fee, there are also additional costs involved, namely admin fees, trustee office fees, or fees that may accompany the No Objection Certificate issued by the developer, which may collectively increase the transfer fee by a number of thousand Dirhams. Always consult your real estate agent or lawyer for a proper estimate of costs so that the purchaser understands what their contributions at the point of completion are going to entail.

Broker commissions and VAT on resale

Estate agents will also take a commission when the property is resold. The normal commission rates for residential properties are around 2%, but this can vary according to the conditions of the market, and you may get some special rates that are different. The commission will be paid at the point of transfer and may also be liable to VAT, depending on where the VAT is applicable. It is essential that you are aware of whether you are paying commission that is inclusive of VAT or exclusive, and also that you have noted that the payment of commission is the responsibility of which party you are selling to through the sale and purchase agreement. There will be NOC or registry charges after you list the property with the agent.

Common extra charges and admin steps at resale

Aside from the transfer fee and commission number that made the headlines, there's always some resale-related admin fee that sellers need to shell out when the property changes hands again. The NOC fee, trustee's office fee, mortgage canceling fee, and registry filing fee all come into play here. The developer may also charge the seller an NOC or transfer document preparation fee or an NOC issuance fee. The transfer fee for the trustee's office or the conveyancer handling the transfer may also come with a coordination fee in the registry. The bank has a mortgage discharge fee or registration fee in case there's a loan taken out on the property. The best way to be properly prepared at the time of transfer to avoid any issues arising at the last minute would be to write down some kind of checklist related to the admin charges or extra costs that need to be incurred.

• NOC fee from the developer.

• Trustee or transfer handling fee and registry admin charges.
  Ask your lawyer to estimate these charges in advance and include them in the settlement statement.

Quick fees comparison table

How resale timing and restrictions affect value.

The resale rules determine when you are allowed to resell your property, as well as determine the potential resale value that you can receive. If a developer does not permit resale until a specific project milestone in the construction of your property has been achieved, you might have to wait for the resale of your property. The liquidity in the resale could be a factor; hence, a resale period may affect potential buyers to a certain extent or, in other cases, cause a shortage of the property to boost the prices. The earlier stages of resale may also charge fees or resale charges due to the assignment of property not being allowed in the contract written between the developer and the buyer.

Practical checklist for sellers and buyers

Before you start looking or making offers for that resale property, use this quick checklist with the seller or with your lawyer or agent in hand. Sellers would do well to deliver the title deed and remove any loan or procure a NOC from their lender. They also need to procure their NOC from the developer well in advance and need their service charge and payment receipts. Buyers would also do well to ask their developer about their resale policy and obtain fees for the trustee and transfer. They would also need data about their agent commission and VAT. Buyers would need data about inspections or handovers done recently. Some of their duties would include:

• Confirm DLD/registry fees and who will pay them.

• Obtain NOC and mortgage discharge estimates before exchange.
  This simple prep saves time at completion and reduces last-minute payment disputes.

Conclusion

Resale policies and the associated fees for transferring can be the most crucial part of any secondary market transaction. The 4% DLD transfer fee is an obvious expense, but there are many others, such as NOC fees, trustee fees, and commissions, and all pile up, of course. "The addition of the developer`s resale guidelines can limit and control when and how you can actually sell, and all these procedures involve some extra paperwork, which adds to the time and money." To avoid any surprises, it is always best to procure written estimates, check the resale guidelines of the developer, and hire an attorney to start working on the sales agreement, which can clearly define "how much is being paid by whom."

FAQ

Q1: Who covers the 4% DLD transfer fee?

Practices vary, but in many Dubai dealings, the buyer bears the 4% DLD fee; often, local custom or negotiation may split it. Always confirm in the sales contract who is responsible for the DLD transfer fee.

Q2: What is a developer NOC, and why does it have a cost?

An NOC is the developer's consent to the transfer of title. Developers charge administration fees for the issuance of NOCs and to check if there are outstanding dues. Ask for the NOC well in advance so that completion isn't delayed.

Q3: What is the commission of brokers in resale?

Broker's commission in residential is usually around 2% of the sale price, though it is negotiable; it may include VAT. Secure a written agency agreement indicating the rate in writing.

Q4: Are there any hidden charges if you resell?

Yes, you may have to pay trustee handling fees, mortgage discharge fees, registry administration charges, and possibly VAT on services. Before signing, request that your solicitor provide you with a total settlement quote.

Q5: How can I expedite a resale transfer?

Secure the NOC early, settle the mortgage or get the consent of the lender, and well in advance, provide all the documents to the trustee. Employ a licensed agent and a conveyancer to liaise with the registry and assist in reducing delays.