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What is Liability Letter?
A liability letter is the seller's bank's official statement of the outstanding mortgage balance on a property, required to settle the loan and transfer a mortgaged Dubai property. It takes up to two weeks to issue and is valid for a limited period.
Description
When a Dubai property carries a mortgage, the sale cannot transfer until the loan is settled. The process starts with the seller requesting a liability letter from their bank stating the exact payoff amount and instructions.
Issuance commonly takes 5 to 15 working days and the letter is valid for a limited window (often around two weeks to a month), which drives the choreography of the whole resale: cheques, blocking and the transfer appointment are scheduled around it.
The buyer's side pays off the seller's bank per the letter, either directly with a manager's cheque at transfer (cash buyer) or through the buyer's bank when the purchase is financed.
How to interpret
Ask whether the seller has requested the liability letter before you sign the MOU timeline; an unstarted letter can quietly consume half the contract period.
Watch the expiry: if the letter lapses before completion, daily interest changes the payoff figure and a new letter restarts part of the process.
Dubai market context
Mortgaged resales are a large share of Dubai secondary transactions, and the liability letter is the single most common cause of timeline slippage, ahead of NOCs and valuations.
Where the buyer needs the title free before their bank releases funds, the property blocking mechanism at the trustee office protects the buyer between the seller's mortgage release and the final transfer.
Frequently asked questions
The seller's bank's official payoff statement for the outstanding mortgage, required before a mortgaged property can transfer. It states the exact settlement figure and payment instructions.
Commonly 5 to 15 working days to issue, with a limited validity window afterwards. Experienced parties request it immediately after signing the MOU to protect the completion date.
The payoff figure changes with accrued interest and the letter must be reissued, delaying completion. Timelines in the MOU should build in that risk on mortgaged sales.
This content is for educational purposes only and does not constitute investment, financial, legal, or tax advice. Yields, returns, and market data referenced are historical or estimated and are not guaranteed. Capital is at risk. Seek independent professional advice before making investment decisions. Oliva is a licensed Dubai real estate advisor (DLD Broker Card: 92025, RERA BRN: 1573501). Read our Key Risks Disclosure and Disclaimer.