Short Sale Contract for United Arab Emirates

Short Sale Contract Template for United Arab Emirates

A Short Sale Contract governed by UAE law is a specialized agreement used when a property is sold for less than the outstanding mortgage amount, with the lender's approval. This document, compliant with UAE Civil Code and property laws, outlines the terms and conditions of the sale, including property details, purchase price, lender approval requirements, and transfer procedures. It incorporates UAE-specific requirements such as Land Department regulations and potentially Islamic finance principles, while protecting the interests of all parties involved in this distressed property transaction.

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What is a Short Sale Contract?

A Short Sale Contract is essential in the UAE real estate market when property owners need to sell their property for less than their outstanding mortgage balance. This typically occurs during market downturns or when owners face financial hardship. The document must comply with UAE federal and emirate-specific property laws, banking regulations, and potentially Islamic finance principles. It requires careful structuring to address the interests of all parties - the distressed seller, the buyer seeking value, and the lender(s) agreeing to accept less than the full mortgage amount. The contract includes crucial elements such as property details, price justification, lender approval conditions, and specific UAE Land Department requirements. This type of agreement has become increasingly important in the UAE's maturing real estate market, particularly following market corrections and economic challenges.

What sections should be included in a Short Sale Contract?

1. Parties: Identification of all parties including seller, buyer, and current mortgage holder(s)

2. Background: Context of the short sale, including current market value, outstanding mortgage amount, and reason for short sale

3. Definitions: Key terms used throughout the agreement including Property, Short Sale, Completion Date, etc.

4. Property Details: Comprehensive description of the property including location, size, and registration details

5. Purchase Price: Agreed purchase price and acknowledgment that it is less than the outstanding mortgage amount

6. Lender Approval: Conditions regarding mortgage holder's approval of the short sale

7. Payment Terms: Structure and timing of payments, including deposits and final settlement

8. Completion Requirements: Conditions precedent and steps required for completion of the sale

9. Property Transfer: Process and requirements for transferring property ownership

10. Seller's Warranties: Seller's representations regarding property condition and disclosed defects

11. Buyer's Acknowledgments: Buyer's confirmation of property condition and 'as-is' purchase

12. Default and Remedies: Consequences of breach by either party

13. Governing Law and Jurisdiction: Confirmation of UAE law application and jurisdiction

What sections are optional to include in a Short Sale Contract?

1. Tenant Rights: Required when property is currently tenanted, addressing existing lease agreements

2. Multiple Mortgage Holders: Required when there are multiple lenders with claims on the property

3. Property Management: Required when there are outstanding service charges or maintenance issues

4. Broker Provisions: Required when real estate brokers are involved in the transaction

5. Islamic Finance Compliance: Required when transaction must explicitly comply with Sharia principles

6. Tax Implications: Required when there are specific tax considerations for either party

7. Insurance Requirements: Required when specific insurance arrangements need to be maintained during the transfer process

What schedules should be included in a Short Sale Contract?

1. Property Details Schedule: Detailed property information including title deed, floor plans, and boundaries

2. Outstanding Debts Schedule: List of all mortgages, liens, and other encumbrances on the property

3. Lender Approval Documents: Written approvals from mortgage holders agreeing to the short sale

4. Property Condition Report: Current condition assessment and known defects

5. Required Permits and Certificates: Copies of necessary government approvals and certificates

6. Payment Schedule: Detailed breakdown of payment terms and timing

7. Transfer Process Timeline: Step-by-step timeline for completion of the transaction

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Publisher

Genie AI

Document Type

Sales Agreement

Sector

Sales

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Real Estate

Banking & Finance

Legal Services

Property Development

Property Management

Islamic Finance

Insurance

Property Investment

Mortgage Services

Relevant Teams

Legal

Real Estate

Property Management

Compliance

Risk Management

Islamic Banking

Mortgage Services

Investment

Valuations

Business Development

Relevant Roles

Real Estate Lawyer

Property Manager

Bank Manager

Mortgage Officer

Real Estate Broker

Property Valuation Specialist

Legal Counsel

Compliance Officer

Real Estate Investment Manager

Property Developer

Bank Risk Officer

Islamic Finance Specialist

Real Estate Transaction Manager

Property Portfolio Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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