UAE Motor Sale Rules Tighten: Why Power of Attorney Alone Cannot Secure Car Ownership Against Resale Risks

In the UAE, reliance on a power of attorney in vehicle transactions continues to expose buyers to significant legal risk, particularly where formal ownership transfer procedures are not completed. Recent legal clarifications reaffirm that a power of attorney, while commonly used in informal arrangements, does not by itself confer ownership of a vehicle, nor does it prevent the registered owner from selling the same car to another buyer.

Under UAE law, a power of attorney is merely an authorisation granted by the owner, enabling another person to act on their behalf in disposing of the vehicle, including selling or transferring it. However, this authorisation does not alter the legal status of ownership. The vehicle remains officially registered in the name of the original owner in the records of the Roads and Transport Authority (RTA) until a formal transfer is completed.

This distinction is critical. Even where a buyer has paid the full purchase price and holds a valid power of attorney, the seller retains legal ownership in the absence of registration. As a result, the seller is not legally prevented from selling the same vehicle to a third party, potentially leaving the initial buyer without possession or title.

To secure ownership rights, UAE law requires that the vehicle be formally transferred and registered under the buyer’s name with the RTA. Without this step, the transaction remains incomplete in the eyes of the law, regardless of any private agreements or authorisations executed between the parties.

In cases where a seller resells the vehicle after granting a power of attorney, the affected buyer’s remedy lies in legal action. The buyer may file a claim before the competent court seeking recovery of the purchase price, along with compensation for any damages suffered. However, the burden of proof rests entirely on the buyer.

To succeed in such claims, the buyer must substantiate the transaction and the resulting loss through credible evidence. This may include the power of attorney document, proof of payment, witness testimony, and supporting communications such as WhatsApp messages. The strength and consistency of this evidence often determine the outcome of the case.

The legal position underscores a broader caution for buyers in the UAE’s used car market: reliance on informal mechanisms, even those that appear legally structured like a power of attorney, cannot substitute for official registration. Completing the transfer through the RTA is not merely procedural — it is the only definitive way to establish and protect ownership rights.