When a company decides to purchase a property in Dubai, the board resolution for the purchase of property is a crucial corporate document under UAE law. This resolution demonstrates that the property purchase was conducted properly, at the appropriate corporate level, and in accordance with corporate governance requirements. Therefore, in the following lines, the POA&more team provides a comprehensive guide to board resolution for the purchase of property.

What Is A Board Resolution Agreement?

A board resolution is a legal document signed by all board members or their representatives. Its primary purpose is to authorize company officials to take legally binding actions on behalf of the company. A board resolution for the purchase of property is also essential in Dubai and the UAE in general for a wide range of business transactions, such as:

Company formation: When establishing a new company in Dubai or in free zones, a board resolution for the purchase of property is often an essential document for documenting initial decisions and appointing officials.
Opening bank accounts: Banks in Dubai and the UAE require a board resolution to authorize authorized individuals to open and operate the company’s bank accounts.
Signing contracts: Any significant contracts, such as leases, large commercial agreements, or loan agreements, require a board resolution that demonstrates the board’s approval and the authorization of the signatories.
Appointing or removing officials: Decisions to appoint or terminate executives or other senior officials require a board resolution.
Structural changes: Any major changes to the company’s structure, such as selling shares, purchasing real estate, or registering new patents, require a formal board resolution.
Governance and Compliance: Board resolution for the purchase of property helps ensure compliance with legal and regulatory requirements, and provides a clear record of decisions made, protecting the board from accountability in the event of future inquiries.

Board minutes vs Board Resolutions

In Dubai, as in many other jurisdictions, there is a clear and important distinction between board minutes and board resolutions, both of which are essential for corporate governance and legal compliance. Therefore, within the discussion of board resolution for the purchase of property, we explain the difference between board minutes and board resolutions:

Board Minutes:

What are they? They are the official written record of board meetings. They are a comprehensive document documenting all actions, discussions, and decisions taken during the meeting.

Contents of Board Minutes

Minutes typically include information such as:

Date, time, and location of the meeting.
Names of those present and absent.
Meeting agenda.
A summary of the discussions held on each agenda item.
Any proposals put forward (whether approved, rejected, or postponed).
Details of decisions taken (including voting).
Any actions required after the meeting.

Purpose of Board Minutes

Provide an accurate and referenced record of decisions made.
Ensure transparency and accountability for board members.
Help track business progress and fulfill directors’ fiduciary duties.
Provide legal protection for the organization in the event of disputes or audits.
Responsibility: The company secretary is typically responsible for preparing meeting minutes.
Retention: Accurate records of board meeting minutes must be securely maintained.

Board Resolutions:

What are they? These are formal, legally binding decisions made by the board of directors during meetings. These resolutions can be part of the meeting minutes or separate documents.
Content: Resolutions focus on the specific action or decision taken. For example, a decision to appoint a new director, approve financial statements, open a bank account, approve a major transaction, or change the management structure.

Purpose of Board Resolutions

Formally document the significant actions and decisions taken by the company.

It serves as legal proof to third parties (such as banks and government entities) that the decision was made correctly and in accordance with the law and company regulations.

It ensures that the company’s major decisions are implemented in an orderly and legal manner.

Form of Board Resolutions

Resolutions are often drafted in formal language and typically include:

Date of the resolution.
Resolution number (if applicable).
A clear title for the resolution.
A list of the reasons or background that led to the resolution (“Whereas”).
The text of the resolution itself (“The Board has resolved”).
Names of the board members who voted on the resolution.
Signature of the meeting chairperson or secretary.

Notarization in Dubai

In some cases, especially for important decisions (such as opening bank accounts, appointing or dismissing directors, or changes to the company’s structure), board resolutions in Dubai may require notarization by a notary public to ensure their legitimacy and acceptance by official bodies.

Board Resolution for the Purchase of Property

A board resolution for the purchase of property in Dubai requires careful consideration of several aspects to ensure the best investment for the company. Here are the key steps and elements that a board resolution for the purchase of property should include:

Strategic Justification:

Investment Objectives: What are the objectives of purchasing the property? Is it for office use, leasing, resale, or future expansion?
Vision Alignment: How does the property purchase serve the company’s overall strategy and long-term goals?
Market Analysis: A comprehensive assessment of the Dubai real estate market, including current and future trends, growth areas, and the most attractive property types.

Financial Feasibility Study:

Allocated Budget: Determine the budget available for the purchase and its associated costs (registration fees, maintenance, taxes, if applicable).
Return on Investment Analysis: Estimate the expected returns from the property (rents, appreciation) and compare them with the costs.
Financing Model: Determine how the purchase will be financed (self-financing, bank loans, syndicated financing).
Sensitivity Analysis: Evaluate how changes in market or economic conditions will impact the financial viability of the property.

Real Estate Research and Valuation:

Define Requirements: Determine the property type (commercial, residential, industrial), desired size, preferred location, and necessary amenities.
Comprehensive Property Inspection: Conduct a technical and legal inspection of the target property to ensure there are no structural defects or legal issues (mortgages, disputes).
Independent Valuation: Obtain an independent valuation from an accredited entity to determine the property’s fair market value.

Legal and Procedural Aspects:

Contract Review: Thorough review of sales and purchase contracts by a legal advisor specializing in Dubai real estate laws.
Compliance with Local Laws: Ensure compliance with all Dubai real estate laws and regulations, including foreign ownership laws (if the company is a foreign company).
Government Procedures: Understand all procedures required for registration and transfer with the Dubai Land Department.

Risk Management:

Market Risk: Fluctuating property prices, changes in demand and supply.
Operational Risk: Maintenance costs, property management, vacancy risk (in the case of leasing).
Legal Risk: Any potential issues or disputes related to ownership or use.
Liquidity Risk: Difficulty selling the property quickly in the event of a need for liquidity.

Board resolution for the purchase of property:

Submitting Offers: After appraisals, a purchase offer is submitted that matches the property’s fair value and the specified budget.
Negotiating: Negotiating the contract terms and price with the seller.
Final Approval: The board must issue a formal, written resolution approving the property purchase, specifying the financial amount and purchase terms, and authorizing the relevant individuals to sign the contracts and complete the procedures.

How to write a Board resolution for the purchase of property?

To write a board resolution for the purchase of property in Dubai, the resolution must include several essential elements to be sound and clear. Here are the main steps and components:

Title of the resolution: It must be clear and concise, such as “board resolution for the purchase of property.”
Date and location of the meeting: The date and location of the board meeting at which the resolution was made.
Member attendance: A list of the names of the board members present at the meeting.
Agenda: Reference to the agenda item related to the property purchase.
Summary of discussions: A brief summary of the discussions surrounding the property purchase, including any feasibility studies or reports submitted.
Property description: A detailed description of the property to be purchased.
Agreed price and payment terms: The total price of the property and the method of payment (down payment, installments, final payment date).
Authorized signatories: Identify the individuals (such as the chairman, general manager, or designated members) authorized to sign the sale and purchase contract and all documents related to the purchase process.
Purpose of Purchase: State the purpose for which the property is being purchased (e.g., investment, office use, employee housing, resale).
Delegation of Authority: Delegate any additional authority necessary to complete the purchase (e.g., final negotiation of terms, payment of fees, property registration).
Final Approval: Confirm the Board of Directors’ approval of the purchase.
Member Signatures: Signatures of all board members present who approved the board resolution for the purchase of property.

Read more: Board Resolution For Opening Bank Account Services UAE

Sample Resolution for the Purchase of Property

[Company Name/Legal Entity]

Board Resolution for the Purchase of Property No.: [Resolution Number]
Subject: Approval of the Purchase of Property in Dubai
Meeting Date: [Meeting Date]
Meeting Location: [Meeting Location, e.g., Company Headquarters, Dubai, United Arab Emirates]

Attendees:

Mr./Ms. [Name of Member 1] – [Position]
Mr./Ms. [Name of Member 2] – [Position]
Mr./Ms. [Name of Member 3] – [Position]

Introduction:

The Board of Directors of [Company Name] held its meeting on the date and place mentioned above to discuss several items on the agenda, including an item related to the purchase of property in the Emirate of Dubai.

Discussions:

The Board reviewed the report submitted regarding the property proposed for purchase, which included details of its location, area, legal status, and financial valuation. After extensive discussions and an assessment of the economic feasibility, and emphasizing the importance of this investment in achieving the company’s objectives [briefly state the objective, e.g., expanding assets, achieving investment returns, providing a headquarters for employees, etc.]

Resolution:

Accordingly, the board’s resolution for the purchase of property unanimously (or by majority, stating those who dissent, if any):

Approval for Property Purchase: Final approval for the purchase of the following property:
Property Type: [e.g., Residential Apartment / Commercial Office / Plot / Villa]
Location: [Full Address, e.g., Emirates Towers Building, Sheikh Zayed Road, Dubai]
Plot Number / Unit Number: [Property ID Number from the Land Department, e.g., Plot Number 123456 / Unit Number 789]
Area: [Area in square meters or square feet, e.g., 150 square meters]
Price and Payment Terms: Approval to purchase the aforementioned property for a total price of [amount in figures and words, e.g., 2,500,000 (Two Million and Five Hundred Thousand) UAE Dirhams], subject to the agreed payment terms [state payment terms, e.g., 20% down payment upon signing, the remainder in monthly installments over 12 months / upon delivery, etc.].

Delegation of Authority: Authorizing each of:

Mr./Ms. [Name of Authorized Person 1], [Position, e.g., Chairman of the Board of Directors]
Mr./Ms. [Name of Authorized Person 2], [Position, e.g., General Manager]
to sign the sale and purchase contract and all necessary documents and papers to complete the purchase, registration, and transfer of ownership at the Dubai Land Department, and to take all necessary actions.
Purpose of Purchase: The purpose of purchasing this property is [clearly state the purpose, e.g., real estate investment / use as a company headquarters / housing for key employees].
Notarization: To authorize any expenses or fees related to the purchase and registration process.

Signatures:

Name of Member 1: Title

Name of Member 2: Title

Name of Member 3: Title

Name of Member 4: Title.

How Can A Board Resolutions Agreement Be Obtained In Dubai?

To obtain a board resolution agreement in Dubai, there are several aspects to consider:

Nature of a board resolution agreement:

It is not an “agreement” in the traditional sense: A “board resolution for the purchase of property” is usually an official record of meetings at which the board makes certain decisions. These decisions are documented and become part of the company’s official records.
It differs from the articles of association: The articles of association are the basic document that defines the company’s structure and bylaws, while board resolutions are documents in which decisions are made regarding the day-to-day operations and important matters of the company.
Its purpose is to document important decisions such as appointing new members, approving major transactions, changing policies, or opening bank accounts.

How to prepare and attest board resolutions in Dubai:

A clear title: The board resolution for the purchase of property must have a clear title that describes its content (such as “Board Resolution to Appoint a New Director”).
Company information: Full company name, commercial registration number, and head office address.
Meeting details: Date, time, and location of the meeting at which the resolution was made.
Attendance and Absence: A list of the board members present and absent, with confirmation of a quorum.
Decisions Taken: Clear and specific wording of the decisions taken, with sufficient details.
Signatures: Signatures of the board members who approved the decision, or the chairman and secretary.
Company Letterhead: Must be printed on the company’s official letterhead.

Notarization:

In many cases, especially important transactions or those requiring external parties (such as banks or government entities), board decisions may require attestation by a notary public in Dubai.
General steps for attesting board meeting minutes/resolutions (example from the Abu Dhabi Judicial Department, a similar process in Dubai):
Log in with the applicant’s digital ID account.
Select the required service and fill out the information.
Attach the required documents (the document to be attested, trade licenses if applicable, the articles of association, and the document proving the composition of the board of directors).
Parties sign the transaction digitally.
Pay the required fees.
Schedule an appointment for a remote interview, after approval.
Receive the digitally attested document after the interview.
Notarization requirements: The parties must have legal capacity, and if the document is issued outside the country, it must be duly authenticated.

Importance of a Board Resolution in Commercial Real Estate Purchase

Board resolution for the purchase of property in Dubai is of paramount importance and involves multiple considerations, whether legal, financial, or strategic. Here are the most important aspects of this importance:

Legal Framework and Compliance:

Mandatory Approval: In most companies, the purchase of a large asset such as a commercial property requires board resolution. This resolution is a legal record documenting the board’s approval of the deal.
Definition of Authority: The resolution clearly states that the company, through its board of directors, approves the purchase. This gives individuals (such as the CEO or general manager) the legal authority to proceed with the signing of contracts and necessary procedures.
Protection from Liability: Board resolution for property purchases provides protection for company officials, demonstrating that the decision was made collectively and after careful consideration, reducing personal liability in the event of future issues.
Dubai Land Department Requirements: The Dubai Land Department may require a board resolution as part of the attestation required to register the property in the company’s name, especially if the company is a foreign entity or a free zone.

Financial and Investment Importance:

Significant Capital Investment: Purchasing commercial property is a significant capital investment. It requires a careful assessment of the budget, financing, and expected return on investment. The board’s decision ensures that this investment is well-considered and serves the company’s financial objectives.
Feasibility Study and Comprehensive Verification: Before making the purchase decision, the board of directors thoroughly reviews the feasibility study reports, which cover the legal, financial, technical, and physical aspects of the property.
Title Verification: Verifies the seller’s ownership of the property and that there are no mortgages or disputes.
Legal Status of the Property: Ensures there are no building violations or usage restrictions.
Financial Evaluation: Analyzes projected cash flows, operating costs, and potential rental income.
Physical Inspection: Evaluates the property’s structural condition and necessary maintenance.
Market Analysis: Evaluates the property’s location, market trends, and level of competition.
Balance Sheet Impact: The property purchase significantly impacts the company’s balance sheet, both in terms of assets and liabilities (if financing is available). The board of directors ensures that this impact is positive and consistent with the company’s financial strategy.
Financing Strategies: The board of directors decides how to finance the purchase, whether through cash, bank loans, or a combination of the two.

Strategic Importance:

Company Objectives Alignment: The commercial property purchase must align with the company’s overall strategic objectives. Is the purchase intended for expansion, rental income, or operational use?
Location and Business: The location of the commercial property plays a critical role in the success of the investment. The board of directors discusses the location’s suitability for the company’s purposes, its proximity to target markets, and surrounding infrastructure.
Long-Term Planning: The board considers the long-term implications of owning the property, including growth potential, resale value, and any future development plans for the area.
Risk Management: The board of directors evaluates the potential risks associated with the real estate investment, such as market fluctuations, regulatory changes, and operational risks.

Governance and Transparency:

Transparency and Accountability: The board’s decision promotes transparency and accountability within the company, as the decision and process are documented.
Shareholder Interest: The board of directors ensures that the property purchase decision serves the interests of shareholders and maximizes their value.

Board resolution for the purchase of property is not just a formality when purchasing commercial real estate in Dubai. It is a crucial process that ensures that the investment is made strategically, legally, and financially sound, protecting the company’s interests and contributing to the achievement of its long-term goals.

Authorizing the Purchase of Property

Here are the most important points that must be included in a board resolution for the purchase of property in Dubai:

Date and place of the meeting: The date and place of the board meeting at which the resolution was made must be stated.
Member attendance and quorum: The names of the board members present and absent must be stated, ensuring that the meeting’s quorum is met.
Purpose of the resolution (preamble): Explain that the board of directors believes that purchasing the property is in the best interest of the company and contributes to achieving its objectives (e.g., using the property as an office, factory, guest house, investment, etc.). It can begin with phrases such as “Whereas the board of directors believes that it is desirable and in the best interest of the company to acquire the aforementioned property…”
Accurate description of the property: The resolution must include a comprehensive description of the property to be purchased.
Approved financial amount for the purchase: Specifies the maximum amount the board of directors has agreed to pay to purchase the property.
Key purchase terms: This can include any important terms related to the purchase, such as payment terms or any special requirements.
Delegation of Authority: This is the most important point, as one or more people (usually the CEO, CFO, or a board member) are authorized to do the following on behalf of the company.
Formal Resolution Form: The resolution is clearly and directly worded using legalese, often using phrases such as “The board resolution for the purchase of property includes the following:…”
Signatures and Seal: The board resolution for the purchase of property must be signed by the board members who attended the meeting and approved the resolution, and stamped with the official company seal.

Key Elements of a Board Resolution for Property Purchase

When a board of directors makes a decision regarding the purchase of property in Dubai, there are several key elements to consider to ensure the decision is informed and in the best interests of the company. Here are the key elements of a board resolution for the purchase of property:

Compatibility with business objectives: Does the property purchase fit with the company’s long-term strategic objectives? Is it for office use, investment, or operational expansion?
Business needs: Does the property meet the company’s current and future needs in terms of space, location, and amenities?
Dubai’s urban plan: Does the property align with Dubai’s urban plans, such as the Dubai Urban Plan 2040, which may impact future value and surrounding development?
Total cost: This includes the purchase price, Dubai Land Department registration fees (typically 4% of the property value), attorney fees, and future maintenance and operating costs.
Return on investment analysis: If the property is an investment property, what is the expected return from rentals or resale? A careful analysis of the projected cash flows should be conducted.
Financing options: Evaluate available financing options, such as bank loans, repayment terms, and the impact on the company’s financial position. Budget Allocation: Ensure there is a sufficient and approved budget for the purchase and associated costs.
Legal Inspection: Verify the property’s ownership, the absence of mortgages or disputes, and compliance with all Dubai laws and regulations. This includes reviewing the property’s ownership documents and the property’s registration with the Dubai Land Department (DLD).
Technical Inspection: Evaluate the property’s structural condition, any defects, and future maintenance needs. An engineer or contractor may be hired to provide a technical report.
Market Evaluation: Study the prices of similar properties in the area, market trends, supply and demand, and competition to ensure the asking price is fair.
Regulatory Restrictions: Check any building or use restrictions related to the property, such as Dubai Building Code requirements.
Free Zones and Freehold: Ensure the company is eligible to own property in the area where the property is located, especially if it is a foreign company or based in a free zone.
Board Approvals: The board must issue a resolution approving the purchase of property, detailing the property, price, and terms. This resolution is legally binding and must be kept in the company’s records.
UAE Companies Law: Ensure the purchase process complies with the UAE Federal Commercial Companies Law and local regulations in Dubai.
Sale and Purchase Agreement: Signing a memorandum of understanding between the seller and buyer, which sets out the basic terms of the transaction.

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Frequently asked questions

Do you recommend buying a property in Dubai?

Buying property in Dubai is a promising investment opportunity for many, for several reasons:

High rental returns: Dubai offers competitive rental returns compared to many global markets, ranging on average between 5-9% and reaching 15% for commercial spaces in some areas. This provides a steady income stream for investors.
Sustainable growth and future opportunities: Dubai’s real estate market is experiencing significant and sustainable growth, supported by the ongoing development of projects and infrastructure, contributing to an increase in property values over time. Experts expect property prices to continue rising in 2025, albeit at a slower pace.
Tax-free environment: Dubai does not impose taxes on income or capital gains from the sale of real estate, further enhancing its attractiveness.
Diverse options: Dubai offers a wide range of properties to suit various budgets and investment objectives, including ready and off-plan properties.
Freehold ownership: Freehold areas allow foreigners to purchase property outright, providing them with security and flexibility.
Obtaining a Residence Visa: Real estate investors can obtain a residence visa in Dubai, the duration of which varies depending on the value of the property invested (two, five, or ten years).
World-Class Infrastructure: Dubai boasts advanced infrastructure and world-class facilities, making it an attractive place to live and invest.
Safety and Security: Dubai is considered one of the safest cities in the world, attracting individuals and families to live there.

Is it worth investing in real estate in Dubai?

Here’s a breakdown of why real estate investing in Dubai is considered profitable, along with some risks to consider:

High rental returns: Dubai offers attractive rental returns compared to many other major cities. Rental returns can range from 5% to 10% or more, depending on the type and location of the property.
No property income taxes: One of the most attractive features for investors is the lack of taxes on property income or personal profits, which increases the net return on investment.
Sustainable economic growth and advanced infrastructure: Dubai is experiencing rapid and stable economic growth and is investing heavily in developing its modern and advanced infrastructure (roads, transportation, airports, and service facilities), making it an attractive environment for living, working, and investing.
A stimulating investment environment: The government in Dubai supports foreign investment with flexible laws and legislation that facilitate freehold ownership for foreigners in specific areas and provide opportunities for long-term residency (golden residency) for real estate investors at a certain value.
Diversity of Real Estate Options: Dubai offers a wide variety of property types, from luxury apartments and high-end villas to commercial offices and industrial spaces, catering to a variety of investor needs and budgets.
Increasing Population Demand: Dubai is experiencing a continuous increase in the number of residents and expatriates, leading to increased demand for residential and commercial properties and contributing to rising prices and rental values.
Ongoing Development Projects: Dubai continues to launch and implement large-scale and innovative real estate projects, contributing to the continued growth of the market and increasing its attractiveness.
Political and Security Stability: The UAE in general, and Dubai in particular, enjoys political and security stability, providing a safe environment for investors.

Is the board resolution for the purchase of property important in Dubai?

Yes, board resolution for the purchase of property in Dubai is extremely important for several fundamental reasons related to the nature and size of the transaction, as well as the legal and regulatory framework in force in the emirate. Board resolution for the purchase of property in Dubai is not just a normal purchase; it is a major strategic investment that requires in-depth research, meticulous administrative and legal approvals, and a sense of responsibility on the part of the board of directors to ensure the protection of the company’s interests and the achievement of its objectives.

Drafting Board Resolution for the Purchase of Property