Why use a POA in Dubai

Why use a POA in Dubai?

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What is a Power of Attorney (PoA) in the UAE

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PoA or Power of Attorney is an agreement or a written legal contract between 2 parties, either individuals or companies, where one party authorizes another to represent them and act on their behalf. The PoA can be used by UAE residents who are not able to perform actions that require their physical presence. Non-UAE residents also often use a PoA when they are required to be legally present while conducting either personal or business matters. There are numerous benefits of using a PoA, from saving you time and money you would have to spend on frequent trips and accommodations, to sparing you the inconvenience of doing everything yourself and having to take time off work to do it. In this article, you will learn when a PoA can be used and by whom in relation to the real estate purchase transaction, and what the requirements are.

PoA uses in real estate purchases in the UAE

There are different types of PoAs in the UAE each with a different purpose and legal implications that come with it. The most common type of a PoA is the General PoA, which covers a broad range of authorized actions, and there is also the Specific Sales PoA, which is an authorization issued for a specific purpose and focused on a limited set of actions that can be performed on the principal’s behalf (the person giving the authorization).

General Power of Attorney- the following are actions that can be authorized with this type of PoA:

  • Sign contracts, and legal documents and execute legal duties
  • Withdraw funds from a bank account
  • Deposit Funds to your bank account
  • Collect Funds on your behalf and transfer them to an international account
  • Collect payment or rental income
  • Pay bills
  • Sign leases with landlords or tenants
  • Form a company and run it
  • Buy shares in companies
  • Represent before government departments, financial institutions, and other third parties
  • Represent before UAE utility service providers
  • Represent in legal affairs and hire lawyers
  • Buy and sell assets and real estate (only if the principal and the agent are immediate family, otherwise a Special PoA is needed)

Special Power of Attorney- the following are different types of special PoAs that can be issued:

  • Property Specific Sales PoA
  • Inheritance PoA
  • Etc

Property Power of Attorney- this type of PoA focuses on property transactions and management:

  • Manage or lease a property
  • Buy or sell real estate
  • Sign all purchase or sale documentation
  • Represent the principal before government departments and developers
  • Obtain a NOC

Who can be authorized by a PoA

When it comes to the sale of personal assets and property, the UAE government sets certain restrictions on who can be authorized to do what. Under the General PoA, only close family members (father, mother, son, daughter, or siblings) can be authorized to sell the principal’s assets or property. All other persons can only be authorized for a specific property and action under the Special PoA. In Abu Dhabi, however, the General PoA will not authorize anyone, not even immediate family members, to sell the principal’s assets. This can only be covered by the Special PoA tied to a specific property.

For property purchases in Dubai, a General PoA will be enough for a close family member; however, anyone else will require a Special or Property PoA. It’s important to be sure that the authorized person will always have your best interest in mind and will never abuse the PoA for their interest. Regarding mortgage brokers, there is no specific rule against them being authorized as long as it’s a separate person and not the same individual signing the mortgage agreement as your broker.

Power of Attorney provisions and specifications

Let’s go over some of the key provisions of a typical PoA in the UAE:

  • A PoA draft is issued and signed by the authorizing person.
  • This is then sent to Dubai Notary who in turn will then video call you to ask if its your signature and will then ask to see your passport(s). That's it.
  • A PoA should be issued in both Arabic and English. The Arabic version is considered the main document if there are any discrepancies between the two
  • UAE residents must notarize a PoA at the public notary and the price ranges from 550 - 3000 AED
  • Non-residents or individuals outside the UAE must legalize the document at the UAE embassy in their country, and then once in the UAE it needs to be legalized by the UAE Ministry of Foreign Affairs
  • A PoA is void if its principal passes away
  • Pricing usually depends on the type of PoA and to who it is issued.
  • Prices are on the higher end of the range for non-residents and businesses, while on the lower end for residents and individuals
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