Vehicle Ownership Transfer in UAE: Seller and Buyer Rights
Buying and selling cars in the UAE
Your legal rights and how to protect yourself
Buying and selling used cars is one of the most common daily transactions, often leading to legal disputes due to failure to complete ownership transfer procedures, hidden defects, or undisclosed bank financing. The rulings on these matters in the UAE are based on the Civil Transactions Law, the Penal Code, and Federal Decree Law No. (14) of 2024 regarding traffic regulation.
In this article, our team reviews the most common legal questions raised by sellers and buyers.
Frequently Asked Questions
Do I bear the car fines after selling it without transferring ownership?
Yes. According to Article (22) of Federal Decree Law No. (14) of 2024 regarding traffic regulation, the registered owner of the vehicle remains liable for obligations arising from its use until ownership is officially transferred at the licensing authority. Therefore, traffic violations issued after the sale remain recorded against you as long as ownership has not been transferred.
I sold my car, but the buyer did not transfer ownership, what should I do?
You have the right to take the following actions to protect yourself:
- Go to the relevant licensing authority to inform them of the sale and provide the sales contract as evidence.
- File a civil lawsuit in the competent court under the Civil Procedure Law to compel the buyer to complete the ownership transfer or compensate for damages caused by their delay.
- Keep all documents proving the completion of the sale (written contract, payment receipts, correspondence) to strengthen your legal position.
Is signing a sales paper sufficient to transfer ownership of the car?
No. The sales contract signed between the parties proves the agreement and establishes the legal obligations between them, but it does not transfer the official ownership of the vehicle. Traffic law requires the completion of the ownership transfer process at the licensing authority through the approved means. Until this is done, the old owner remains the official owner before government authorities.
I bought a car and it has a hidden defect, what are my rights?
The Civil Transactions Law obliges the seller to guarantee hidden defects in the sold item. A hidden defect is one that the buyer could not discover through normal inspection at the time of sale. Once the hidden defect is established, the buyer has the option to either return the car and recover the full price, or accept it with the agreed price. UAE courts have upheld this right in several cases involving transmission faults, flooding of the car, and other undisclosed defects.
Can a contract for the sale of a used car be rescinded?
Yes, the Civil Transactions Law allows for the rescission of the car sale contract in specific cases, the most notable of which are:
- The emergence of a hidden defect that the seller did not disclose.
- Fraud or deceit by one of the parties.
- The car being claimed by a third party after the sale.
- The destruction or damage of the car before it is delivered to the buyer.
A lawsuit for rescission is filed before the competent civil court according to the Civil Procedure Law, and the court may rule for rescission, refund the price, and compensate for damages.
I bought a car and it turned out that its odometer has been tampered with, what should I do?
Tampering with the odometer is considered a hidden defect that warrants a guarantee under the Civil Transactions Law, and it may also rise to the level of fraud and deception punishable under the Penal Code. UAE courts have ruled to annul sales contracts and obligate the seller to refund the price and pay compensation in similar cases. It is advisable to document the defect through a technical report certified by a specialized entity, and then file a civil lawsuit with the possibility of submitting a criminal complaint.
What is the legal liability for accidents before transferring vehicle ownership?
The officially registered owner is responsible for the obligations arising from the use of the vehicle according to traffic laws. If an accident occurs before the transfer of ownership, civil liability remains linked to the registered owner primarily, although they have the right to seek recourse against the actual buyer if they prove that the accident occurred after the sale was completed and the latter was driving the vehicle. This highlights the importance of completing the transfer of ownership immediately upon sale.
Is it permissible to sell a vehicle that has financing or a bank mortgage?
It is not permissible to sell a mortgaged vehicle without the permission of the mortgagee (the bank or financing company), as the mortgage restricts the right to dispose of the vehicle. A sale conducted without releasing the mortgage is not valid against the bank. The original owner remains obligated to pay the installments to the bank as long as the mortgage is in their name. Anyone who sells a mortgaged vehicle without disclosing this may face criminal liability under the Penal Code.
Does the seller have the right to reclaim the vehicle after the sale?
The principle of the contract being the law of the contracting parties is firmly established in the Civil Transactions Law, and the seller does not have the right to retract the sale after it has been completed and the price has been received, except in specific cases, including: explicitly stipulating the right of return in the contract, or proving the existence of error, fraud, or coercion that invalidated the contract originally. Regret or change of opinion does not permit retraction of the sale.
How do I prove that I was a victim of fraud when buying a used car?
To prove fraud, it is advisable to take the following steps:
- Obtain a certified technical report from a specialized entity that proves the defect or manipulation.
- Keep all correspondence and advertisements that were the basis of the deal.
- File a report with the relevant authorities based on the provisions of fraud and deception in the Penal Code.
- File a civil lawsuit for rescission and compensation before the competent court according to the Civil Procedure Law.
The sooner you take these steps, the stronger your legal position will be.
Preventive tips before selling or buying a car:
- Complete the transfer of ownership officially with the licensing authority immediately after the sale without delay.
- Keep a written sales contract signed by both parties that includes a detailed description of the car's condition.
- Ensure the car is free of liens and financing before purchasing through official channels.
- Inspect the car at an accredited technical entity before completing the transaction.
- Do not receive or hand over the car before completing the ownership transfer procedures.
Summary
- The registered owner bears the violations and responsibilities until the ownership is officially transferred according to traffic laws.
- The sales contract alone is not sufficient — the transfer of ownership requires official procedures with the licensing authority.
- Hidden defects and tampering with the odometer justify rescission and compensation according to the Civil Transactions Law.
- Selling a mortgaged car without the bank's permission may lead to civil and criminal liability.
- Early documentation and swift action are key to protecting your rights in court.
If you are facing a dispute related to the sale or purchase of a car or need legal advice before completing your transaction, our office team is fully prepared to provide the necessary assistance.