Dubai Real Estate News
UAE Property Market Trends and Reviews

"; The Dubai Land Department will shortly announce a new legislation for offshore companies investing in Dubai Freehold market. This move aims to improve transparency in the market.

Due to lack of transparency, the Land Department had halted the transaction of offshore companies for a month.

The Director-General of the Dubai Land Department, Mohammad Sultan Thani, said that at present there are guidelines for offshore companies. A new set of regulations is now awaiting approval, and will be introduced by this week-end.

An offshore business company is one that is incorporated outside the jurisdiction of its primary operations. In the UAE, the Jebel Ali Free Zone Authority in Dubai and Ras Al Khaimah Free Zone offer offshore licenses.

Industry experts consider the new regulations as a welcome measure. The Managing Director at Jones Lang LaSalle, when speaking to the media, mentioned that the relationships between corporate units and regulators needs understanding of their issues, obligations and opportunities to strengthen their requirements for their companies to operate in Dubai and UAE.

There needs to be more transparency during these turbulent times, and understanding about the manner of doing business. A regulator can contribute its best to improve this clarity, and that will be well received, he added.

The registration of titles for freehold firms in the name of foreign offshore companies were suspended throughout the month of February, while the Land Department updated its system.

Effective February 1st, the new directive had instructed the transaction department not to register the titles in the name of foreign offshore firms. However, the ownership of properties registered in the name of foreign offshore firms prior to the said date remained unaltered.

Labels: Freehold Property, Property Law

"; Ajman will shortly announce a new committee to settle disputes between developers and investors. The committee will take up issues pertaining to cheques involved in real estate transactions.

The Director General of Ajman Real Estate Regulatory Authority (ARRA), Omar Al Barguthi, said the committee was hoped to begin operations by end of 2009. But the clearance from the Ministry of Justice is awaited.

Apart from resolving investor-developer disputes, the committee will also take up issues pertaining to post-dated cheque issues and more such cases pertaining to property sector, he added.

The committee will include five members nominated by the Executive Council, headed by a Judge assigned by the Ministry of Justice. In November, the Dubai Government established a new judicial committee to deal with cases of bounced cheque in property sector.

ARRA is working with Ruler's Court of Ajman based on a decree to establish a 'bounced cheque committee'. The decree is hoped to be passed within next two months, said Lisa Dale, Partner and Head of Property Department, Al Tamimi & Company.

This follows the initiative by Dubai, wherein a similar committee was established on the directions of Dubai's Ruler.

Ajman has several cases of off-plan property purchasers, wherein developers were given post-dated cheques. When the purchasers bought property off-plan and gave post-dated cheques, the purchasers have failed to honour these cheques, either because the developer has not progressed with construction, or due to financial constraints faced by the purchasers. The developer then files a complaint and in several instances, the purchasers have either left the country or are facing criminal prosecution, Lisa explained.

Labels: Ajman, Property Law

"; The Vice President and Prime Minister of UAE, and Ruler of Dubai, H.H. Sheikh Mohammad Bin Rashid Al Maktoum, issued a legislation on property rent cap in 2010 to ensure the stability of property market in the emirate.

The decree aims to regulate the relationship between tenants and landlords and chart a legal framework for this matter.

Rent increase caps for 2010 will be set at the same rates as for 2009, as per the decree issued on rental cap in 2009. The decree endorsed the Real Estate Regulatory Authority (RERA) rent index as the main reference to determine the average rent on which the rental increases in 2010 will be decided.

Rental increases are permissible only if the property is more than 25 percent below the average index price. If the rent charged was 26 percent to 35 percent less than the average rent for similar property, the maximum increase shall be equivalent to 5 percent of rent value for the year 2009.

If the rent charged was 36 percent to 45 percent less than average rent for similar property, the maximum increase will be equivalent to 10 percent of rental value for the year 2009.

Similarly if the rent was 46 to 55 percent less than average rent for similar property, the maximum increase shall be equivalent to 15 percent of rent value for the year 2009.

If the rent was 56 percent to 55 percent less than the average rent for similar property, the maximum increase shall be equivalent to 20 percent of rent value for the year 2009.

The decree will get effective from the date of issuance, and will be published in the official gazette.

Labels: Property Law, Rentals

"; The new free legal service launched to support people caught in real estate associated court cases, has proved to be a fair way to protect the interests of Dubai's real estate community, reports the Gulf News.

The main objective of such an initiative was to ensure fairness and justice to those concerned about property matters and those in need of such assistance, irrespective of the circumstances, clarified Mohammad Sultan Thani, Assistant Director General, Land Department.

The free legal advice service ensures that none is prevented from pursuing their rights just because they may be priced out of the system.

The Head of CBRE (CB Richard Ellis), the leading research and consultancy firm, Mathew Green, said that the free legal advice offer is another step in the right direction by RERA (Real Estate Regulatory Authority), as it aims to improve transparency in the Dubai property market.

Although the overall confidence in the legal dispute system has been little low due to the time taken in addressing the current backlog, one of the local law firms involved in this initiative said that justice for all is the main motto behind the initiative.

Labels: Property Law, Real Estate News

"; Ajman Real Estate Regulatory Agency (ARRA) authorities have put forward a proposal to overhaul current property visa regulations. ARRA is the first property agency to officially submit such a proposal.

ARRA aims to remove property values, fixed incomes and compulsory exists as the criteria for granting or renewing the six-month residency visas.

The said regulation was a part of the federal resolution issued this May. ARRA however, has asked that it should be possible to renew visas every six months until three years, without having the need to leave and re-enter the country.

Speaking about the minimum property value regulation, which is a part of the visa criteria, ARRA says "The property value in the Northern Emirates does not exceed even half the value in other emirates. This will only lead to serving certain kind of investor."

As for requirement of fixed income of not less than Dh.10,000, ARRA said that this may cause several problems and will open door for companies operating outside the country, to give salary certificates with no reliable references.

ARRA had signed an agreement with Dubai's RERA to create a unified strategy to develop the property sector. The agreement emphasizes the need to create a unified strategy to develop, organize and modernize real estate-related activities.

Labels: Ajman, Property Law

"; Property owners in UAE will have to leave the country every six months, to continue staying in the emirate without a work visa, according to new rule by the DNRD (Dubai Naturalization and Residency Department).

Renewal of the new six-month property visa for non-working investors will be carried out at the airport, based on the statement by DNRD.

Once the multi-visit visa issued by the property owner expires abroad, his visa will be renewed at the airport on arrival, said the statement issued by the department.

The multi-visit visa was announced in June by a regulation to clarify the law on developers sponsoring investors on residency visas. But confusion prevailed, as to whether the investors already sponsored by master developers such as Nakheel and Emaar would be required to make the transfer.

The Deputy Director of the department, Brig. Obaid bin Surur, mentioned that the DNRD officials have begun implementation of the law last month, and are fielding inquiries from developers round-the-clock.

According to the new regulation, investors will have to meet few criteria to gain a multi-entry visa. They will have to own a Dh.1million worth property, own health insurance in the UAE, have a monthly salary of minimum Dh.10,000. The investors will also have to be 100-percent owners of the property title deeds, and should present them to the department.

Although the new law has been welcomed, analysts are of the opinion that a longer stay is required to revitalize the market.

According to a statement by the ING financial group in June, people from economically/politically unstable countries in the region had purchased residences in Dubai, presuming that they would automatically be granted residency, a huge asset to own, if the situation in their home countries turned sour.

Dubai was the only market in the region to offer this link, it pointed out.

Labels: Property Law, UAE

"; A new Law issued by H H Shaikh Saud bin Saqr Al Qasmi, the Crown Prince and Deputy Ruler of Ras Al Khaimah, will bring in better regulation to the building sector in the emirate.

According to Law No.1 of 2009 for regulation of buildings in the emirate, it will be applicable to all buildings, except those that come under special decree or resolution.

The Law does not permit anybody to construct a building or make additions, or expansion, or partly or wholly demolish it, or make any modifications, whether on the facet or internal divisions, without prior permission from the authorized section of emirate’s municipality.

The law is applicable to a range of topics dealing with buildings, such as designs, construction, architectural standards, specifications, license, additions, expansions, maintenance, safety, and penalties for breaching provisions of the law.

As per the law, the construction permit will remain valid for a period of one year from the date of issuance and will be considered void, if no construction happens on the site within the said period or if the work is stopped for more than six months, without valid reasons. The permit can be renewed within 30 days following expiry.

The Architect is responsible for the safety of the building for ten years after delivery. The Municipality Chairman has the right to instruct the concerned authorities to remove unlicensed caravans, pounds, and makeshift houses when their owners fail to do so after expiry of the grace period given to them.

Based on the Technical Committee recommendations, the Municipality Chairman can also order demolition of any worn-out buildings or facilities that may pose danger to inhabitants and passers-by or harm the environment and public health.

The law will be implemented within a month after its issuance and will be published in the gazette.

Labels: Ajman, Property Law

"; The Crown Prince and Deputy Supreme Commander of the UAE Armed Forces, Gen. Shaikh Mohammad bin Zayed al Nahyan, has passed a decree, wherein a Committee has been formed to monitor the distribution of plots and distribution of low-budget housing for UAE nationals, and how to put the properties into good use.

The legislation is inline with the directives by the President H.H. Shaikh Khalifa bin Zayed al Nahyan, who empowers the Committee, under the Chairmanship of Director General of Abu Dhabi Crown Prince's Office, to act accordingly to ensure reasonable distribution of houses and plots.

The Committee can propose necessary legislation required to regulate the distribution of houses and land, and how they could be put to good use.

It will also study issues pertaining to housing and draw necessary plans to solve any housing-related issues, and follow-up implementation of land and housing-related legislations and find out any possible causes that pose hindrance to the smooth implementation of the programme.

The Chairman of Abu Dhabi Executive Council, Shaikh Mohammad, issued another decree establishing Abu Dhabi Center for Housing and Development of Utility Services. This center aims to improve standards of implementation of projects, ensuring that they meet the highest engineering standards. The center will also collaborate with the private sector to implement construction plans.

Another decree has been issued by Shaikh Mohammed wherein certain decisions made by the Eastern Region Development have been amended.

The Abu Dhabi Crown Prince also passed a decree on safety, health and environment management system.

Labels: Abu Dhabi, land, Property Law

"; Ajman Real Estate Regulatory Agency (ARRA), has set announced 1st July as the deadline for property developers, who are yet to complete registration procedures with ARRA.

The press statement released by ARRA this week, states that earlier May 1st was the announced deadline for receiving registration applications from developers, and several developers had rushed to complete the registration formalities. However, few developers have are yet to complete registration formalities.

The ARRA Director-General, Omar Barguthi, while mentioning that several developers have not submitted all the required documents to ARRA, clarified that to be a licensed real estate developer as per the amended Amiri decree, all developers who are yet to complete the procedures or are yet to submit the required documents, are advised to take immediate action, failing which, a fine of one hundred thousand dirham per month would be charged.

However, ARRA will take into consideration, the circumstances of developers who failed to register, due to reasons beyond their control. There is plenty of time for such developers to begin from the point where they stopped, and complete the reminder of registration procedures, Barguthi clarified.

Labels: Ajman, Property Law

"; According to legal experts, the Law No.9 of 2009 does not permit buyers to terminate contracts. The only way an investor can terminate a contract is to go via the court and present a strong termination case, or go directly to Dubai's RERA (Real Estate Regulatory Authority) and seek for project cancellation.

The Partner at Hadef and Partners, Michael Lunjevich, said preventing buyers from cancelling their contracts will help in ensuring that people do not take advantage of a down market. If the law permits the investors to cancel, there will be a huge influx of people intending to cancel projects.

With the developers being permitted to cancel contracts under the Law No.9 of 2009, the law indicates sympathy towards developers, the legal experts say.

The Law No.9 was implemented only recently, and relates to cancellations of all off-plan sale contracts, irrespective of when the contract was signed, which makes the amendment more retroactive.

When the law was first read, it seemed very developer-friendly, but in reality it also favours the buyer a lot, Lunjevich pointed out.

Currently, three new regulations for Law No.9 are awaiting approval, including one which the developer says will not be able to cancel contract without a letter from Land Department, else, the cancelled contract will not have any value in court.

Secondly, the Land Department should attach a letter supporting technical aspects from the site.
Finally, although the investors seeking cancellation of projects must do so only in court, the Investors Group have desired to be able to cancel in the Land Department.

If an investor seeks cancellation at the last minute, and if the developer has already completed 80 percent of a project, it can keep the full amount paid, and ask the purchaser to settle the remaining amount of the contract price. If this is not possible, the developer can request the property be sold at auction.

If the project is atleast 60 percent complete, the developer can revoke contract and deduct upto 40 percent of the purchase price of the unit, as stipulated in the contract. If the developer has completed less than 60 percent of the project, it can revoke contract and deduct 25 percent of purchase price as stipulated in contract.

If the construction is yet to commence, the developer can revoke contract and deduct up to 30 percent of the amount paid by developer.

Labels: Off-plan, Property Law

"; Dubai plans to establish a standard property contract, which would form the norm for all real estate transactions. This is being done with the sole aim of avoiding small print misleads.

A senior official at Dubai Land Department mentioned that having a basic contract would be the norm, and that it would be difficult for buyers and developers to wriggle out of contracts or add fine print to current contracts.

A senior legal advisor at Dubai Land Department, Emmad Eldin Farouq, said that it would provide a clear, transparent guide to the rights of both developer and buyer.

The contract is ready, and we are awaiting directions, Farouq revealed. These will be standard contracts, to be given for all properties.

The contracts will remain unaltered, whether completed or incomplete. Any contractual agreement will have to be simple, clear and transparent. There are too many small prints in contracts now, Farouq said.

There are chances that developer can make additions to any contract, as different developments have different regulations. But the basic contract will remain the same, said Assistant Director-General of Land Department, Mohammad Sultan Thani.

According to the Lawyers, the main points of contract will remain the same, but more clauses may be included. The Partner at Hadef and Partners, Michael Lunjevich, said the standard contract would be for completed properties, signed between the buyer and seller. But, an element of freedom is necessary in a contract. Therefore, it will have standard terms as per the market norms, and thereafter, any alterations will go to a separate section, to avoid any confusion.

A single basic contract will seem easier for buyers and developers, reducing the number of disputes.

Dubai's RERA, together with the Land Department are trying hard to make the real estate sector more secure, but, are insisting that there ought to be a large onus on the buyer to read contracts in full.

During the peak times, several investors entered Dubai market with the sole intention of purchasing property and concentrated less on the contracts, than they would otherwise do so in more mature markets.

"The contract should be clear, and people should read them carefully," Thani pointed out.

Labels: Dubai Real Estate, Property Law

"; The Dubai RERA (Real Estate Regulatory Agency), together with ARRA (Ajman Real Estate Regulatory Authority) has entered into a joint-agreement to develop a unified strategy to develop the property sector.

The agreement underscores the need to build a unified strategy to develop, organise and modernize the activities pertaining to real estate, including developers, brokers and property management companies, and the workforce of such companies. The agreement also emphasizes the importance of strengthening the co-operation ties between the two organizations.

The agreement was signed by Marwan bin Ghalita, the CEO of RERA and the Director-General Omar Al Barguthi of ARRA, in the presence of Sultan bin Butti, the General Manager of the Land Department.

The agreement signifies a major step ahead in the real estate sector. It focuses on developing a unified vision in developing, updating and streamlining all real estate activities, companies and individuals working in brokerage offices and real estate management.

The Bin Ghalita said that apart from the said, the agreement will regulate the work of brokers and real estate advertising between the emirates, in addition to establishing a unified database in Dubai and Ajman with all necessary information pertaining to the brokerage business, real estate development and management.

This agreement re-iterates the strong relationship between ARRA and RERA, said Al Barguthi.

Labels: Ajman, Dubai Real Estate, Property Law

"; Ajman is on its way to introduce a sales price index for freehold areas in the emirate towards the end of the year, followed by a rent index.

The Director-General of ARRA (Ajman Real Estate Regulatory Agency), confirmed the launch of sales price index for freehold areas this year, and said that the prices of the properties will be determined on the basis of supply and demand.

Established in January this year, ARRA has been introducing measures to regulate the emirate's property sector. The agency said that developers who failed to meet the registration deadline on 1st May 2009 will be liable for a fine of Dh.100,000 per month.

Dubai's RERA was the first regulatory body in the UAE to announce a rent index in January, as a reference point for rent regulation.

The Associate Director of CB Richard Ellis Middle East, Matt Green, said that the creation of a price index in Ajman is a good positive sign. The declining real estate and economic situation in the emirate has had a big negative impact during the past nine months, and this will go a long way in instilling confidence in the Ajman market.

The index released by ARRA reflects the true market status, so that landlords, investors and end-users have the necessary tools to make good decisions in a market where the transparency levels are low, he added.

Green pointed out that transparency is on the increase in the UAE, with few initiatives from the government which has helped in the flow of information into the public. The trend is likely to flow into other emirates too, during the year, and more regulations will be passed which will help in further evolution of the local property market.

Labels: Ajman, Freehold Property, Property Law

"; The multiple-entry visas for property owners can be renewed just after their exit from the country, clarified the officials at the Interior Ministry yesterday.

Earlier, the property owners were eligible to renew their visas, under the condition that they stay away from UAE for minimum of one month. Early this week, the Minister of Interior, Lt. Gen. Shaikh Saif Bin Zayed Al Nahyan, issued a decree permitting expatriate property owners to obtain multiple-entry visas for six-month validity, provided, the owners met the criteria required to be eligible for the visas.

This rule has been made applicable to all of the emirates, provided, the property in question is worth Dh.1million or more, and should be wholly owned by the investor seeking visa. The property should also be ready for the investor to move in, and the investor should earn a monthly income of Dh.10,000 or more, or the equivalent in foreign currencies.

The visa can be renewed any number of times, without any waiting period, although the visa holders cannot stay in the country for more than six months at a stretch. After staying in the country for six months, the investors will have to leave the UAE before renewing their visas.
Further, the law also emphasizes that the apartment/villa should be capable of comfortably accommodating the family of the investor. The investor will have to obtain the title of the property from the Registration Authority in the respective emirate.

With this rule getting effective, the earlier trend of leasing of properties for up to 99 years, with the promise of residence visas, as advertised by few developers, stands nullified.

Labels: Property Law, UAE

"; Property owners can now enter UAE on a multi-trip entry visa, which permits them for a stay of up to six months, according to a new decree issued by the Interior Ministry.

This move is hoped to improve the local economic environment and offer all fundamentals that would help ensure prosperity and economic growth in the country. The multiple-entry permit can be renewed under certain conditions.

The regulation forms a part of the efforts by the UAE government to introduce adequate regulations to boost the local economic sector and offers all factors that aims to contribute to the growth and prosperity of the local markets and be of benefit to the public.

This initiative would benefit people seeking to bring in their families to the UAE, and this emphasizes the keenness on the part of the government to provide them with family stability.

A new clause has been added to the Article 33 of the new regulation, which states that owners of built-in properties are allowed to stay for a six-month period, after which, the owner can depart to his home country or stay in any of the GCC countries. He can however, enter the country again, after meeting the necessary criteria.

Another new article of the new regulation, states that the owner must submit a multi-trip entry visa, with respect to the property, under the following conditions.

• The property should be a built-in property, and should not include owners of vacant lands.
• The title of the property should be obtained from the Property Registration Authority in the emirate, by the owner. Also, the house or the apartment should be wholly owned by the owner.
• The cost of the unit should not be less than Dh.1million. The unit should have the capacity to accommodate the members of the family. The owner can include his spouse and children's details in the visa application, and attach an insurance cover for himself and his family, which would be valid during he period of their stay in the country.
• The fixed income of the owner should not be less than Dh.10,000 or its equivalent in foreign currencies, whether inside or outside the county, although the visa doesn't offer the owner the right to work within the country.

The permit would be considered invalid if any of the above terms are not met. The regulation would be effective from its date of issuance.

Labels: Latest News, Property Law, UAE

"; Ajman has banned developers from offering Buyback schemes to purchasers for promotion and sale of their projects, a senior government official in Ajman revealed.

The Director General of ARRA (Ajman Real Estate Regulatory Agency), Omar Al Barguthi, said that few developers are offering such schemes, and this practice need to be stopped.

With the land and property prices shooting up in Dubai during 2007, Ajman came to be known as the destination with most affordable housing targeted for the mid-income group. Several projects were unveiled during this period, which lured customers with promises of residency visas and guaranteed buyback of units.

Barguthi clarified that few developers misused some information for publicity and mislead investors. Hence now the developers are banned from coming up with any campaign unless they receive a written approval from ARRA.

The developers have been banned from advertising about visas, unless ARRA grants them the permission to do so after proper verification about their ability to do it.

Labels: Ajman, Property Law

"; The Dubai Land Department has amended the Article 11 of Law No.13 regulating the Interim Real Estate Register, and this will be released in 15 days time. Once, released the new regulation is hoped to introduce provision for cancellation of contracts, and is hoped to benefit the market.

The department had already issued an internal circular during November 2008, wherein the circular stated that in case of termination of an off-plan contract, the developer can retain 30 percent of the contract value (30 to 70 percent of the amount paid), and that this would be applicable to amounts exceeding 30 percent.

However, in case of termination of contract, the developer of the property will retain the amounts paid by the buyer, until the real estate is sold.

The Director-General of Dubai Land Department, Sultan Butti bin Mejren, has said that the revised article would establish new grades for properties and developers, and would be more than the 30-70 rule, currently applicable.

The Law No.13, Article 11, which is currently applicable states that a developer is required to keep the Land Department informed, if a buyer breaches a sales contract. Thereafter the department would notify the purchaser personally or by registered mail or email, giving him one month time to fulfill the contractual obligations. At the end of the term, the developer can cancel the contract and refund the sum paid by the buyer, after deducting an amount not more than 30 percent of the total value of the unit.

Labels: Latest News, Property Law

"; The UAE Government has established a Federal Real Estate Regulatory Authority in order to co-ordinate regulatory efforts at the local and federal level, revealed a senior official at the Federal National Council (FNC) yesterday.

The Minister of State for Financial Affairs, Obaid Humaid Al Tayer, said "There are local real estate regulatory authorities and the government considers assuming a role at the federal level to co-ordinate between them."

While Dubai and Ajman have already set up regulatory bodies to govern the property sectors of their respective emirates, the concern is about foreign property developers, who wholly finance their projects from local banks, without sufficient capital.

A FNC member from Abu Dhabi, said that few foreign developers, even depend on the local banks for complete funding, putting the lenders at risk of losing their finances, when the developer fails to complete their projects, or flee the country, leaving behind a huge debt.
The member urged that a regulation is required to limit the finance being made available to foreign developers, who do not have a stake in the capital of their projects.

According to Al Tayer, the Central Bank and the UAE banking system are committed to a loan ratio of nearly 20 percent. The government is striving hard to keep its property sector safe even during such tough times.

The Minister emphasized that UAE has a free economy. Although the global economic and financial difficulties may prompt certain precautions in all sectors, including real estate, the investments in private sector should not be restricted.

He added that the banks are already following some precautions towards financing the real estate sector, and hence no additional restrictions are required for this sector, unless deemed necessary in future.

The Minister revealed that the government is also considering issuing freehold property visas with respect to foreign ownership of properties in various emirates. Several emirates have developed their own freehold visa arrangements as of now. Efforts are on to regulate this process at the federal level, by announcing a unified guideline for all emirates.

Such a measure was thought about, when leading developers like Emaar and Nakheel, who were earlier helping foreign buyers to gain a three-year renewable residence visas on purchase of freehold properties, suddenly stopped facilitating them.

Labels: Freehold Property, Property Law, UAE

"; Dubai's RERA (Real Estate Regulatory Authority) will announce its new rental index in April, aiming to bring out a more realistic market.

This decision by RERA follows the huge protests over rental values that were included in the original index published by the Authority last month.

The index is more like a guide, intended to help landlords and tenants in Dubai, with approximate rent levels based on various areas in Dubai. The index is actually scheduled to be republished every six months.

The Chief Executive of RERA, Marwan Bin Galita, said that the rents in the emirate have already begun to plunge, and depending on the location, rents could drop from 10 or 20 percent to nearly 50 percent this year, based on the location.

However, owing to the global economic slump, nearly 20 percent of the 31,000 or more residential units may not come on stream this year. A 40 percent decrease in the total number of units projected for 2010, is also likely.

The first rental index by RERA was released in January this year, which caused resentment among tenants, who felt that the rates quoted were based on last year's rents, when rentals were at their peak, before the onset of financial crisis.

Labels: Dubai Real Estate, Property Law

"; Henceforth, property investors can get complete details about the work progress of their new homes, or details about whether the work has been cancelled or delayed, based on an initiative designed to protect investors.

The Independent Progress Monitoring Report (IPMR) is an online scheme announced by RERA, which will see Government Engineers touring the housing construction sites in Dubai to check the progress being made.

A report will be published with photographic evidence and details about the progress of building work, with details of various stages reached. The monthly updates of the work will be available from next week on the website www.rpdubai.com.

The property sector lacks confidence currently, with the investors being worried that the projects are either cancelled or postponed, which has prompted RERA to take this initiative, agreed the Chief Executive of RERA, Marwan bin Ghalita.

The IPMR will keep a watch over only the projects with Escrow Accounts, which constitutes a total of 695 out of 875 projects registered with RERA. RERA, together with few other agencies will control the supply of new units entering the market by restricting building permits and developers.

During its launch in 2006, RERA had 875 developers on its books. The numbers of developers have reduced to 427. Property developers have reported that anywhere from 1 percent to 80 percent of buyers are defaulting on their payments, based on the building and construction progress and confidence in the developer.

According to Bin Ghalita, the housing projects in Dubai can be broadly categorized as those that are likely to be cancelled, those to be rescheduled, those to be merged, and those that would be completed in two years time. The new developers will have to adhere to the tougher guidelines and prevent the market from getting overheated in future.

The new guidelines by RERA depicts that no project will be able to commence sales unless the land occupied by the project is fully owned by the developer, with at least 20 percent of finances required to build it has been secured.

After attaining those standards, developers will be able to collect not more than 30 percent of the purchase price before beginning the construction, following which the payment plans will have to be connected with construction milestones.

According to Blair Hagkull, the Managing Director of the Regional Office of Jones Lang LaSalle, RERA's announcement represents a major change for Dubai property sector.

Labels: Latest News, Property Law

"; Four new regulations are likely to be announced in Dubai next month, following which, property owners in Dubai, can expect a respite from increasing service charges, announced RERA (Real Estate Regulatory Authority) yesterday.

As per the proposed new rules, service charges for buildings that have been delivered already, will be frozen at rates that prevailed last year, provided, the current rates are less than that of last year's or have been approved by RERA.

The freeze will remain valid until the first general assembly of Owners Association, due to happen within three months of registration.

Service charges for buildings that are due for hand-over soon, or are in the process of being handed over, will also be subject to approval by RERA.

The owners of buildings that have been already handed over, or are due for hand-over, will have to pay service charges until the owners approve the service charges decided during the General Assembly. Service charges already paid, will have to be adjusted to meet the revised rates.

Speaking on this issue, Reinaldo, Director of Fine and Country, said that developers need to understand that property owners are stakeholders on the development, and that their role is vital. Without the Owners Association, there will be no transparency on the dealings.

Labels: Property Law, Real Estate News

"; A senior government official has revealed that a federal regulation capable of granting residency visas to freehold property owners will be introduced within a year.

The proposal permits the owners to obtain a six-month renewable residency visa, irrespective of their nationality, size or value of the property. The proposal has been much appreciated by property developers.

The Acting Director General of the Federal Department of Naturalization and Residency (DNR), Brig. Gen. Nasser al Minhali, said that the project aims to create a unified visa system pertaining to home purchases.

Brig. Minhali termed the proposal as a "Security organizational procedure". The proposal will prevent each emirate from developing procedures of its own, thereby, unifying it under the Ministry of Interior, he added. The Residency Visas that have been granted so far will continue to remain valid, but, it would not be possible to renew them until the federal regulation is implemented.

Brig. Minhali did not reveal further details, as the proposal is being studied. Several emirates, including Dubai, follow the norm, wherein prospective homeowners seek residency through property developers, with the latter acting as sponsors for visas.

The three-year visa, which permits the holder to live in the emirate, but does not permit to work, serves as a major incentive for several buyers, particularly from Pakistan, Iran and India.

However, confusion prevailed, as people were unsure if developers could actually guarantee these visas, as promised, and if so, whether DNR would issue them. Sources within the industry, however, mentioned that a unified nationwide system was vital in this aspect, to ease confusion over which emirate had which entitlement. This would also help in restoring confidence in the market, it is believed.

A prominent Indian Industrialist, Surjit Singh, said that the unified property regulation could help in reducing property price discrepancies across the emirates. Such an initiative indicates the concern by the Ruler towards the interests of expatriate community.

Labels: Latest News, Property Law

"; The new rental index is likely to be updated in three months time, in accordance with the current market conditions, revealed a top official in Dubai's RERA (Real Estate Regulatory Authority).

The index, which is more of a guide to landlords and tenants in Dubai, was scheduled to be re-published every six months.

The Chief Executive of RERA, Marwan bin Ghalita, who spoke to the media on Thursday, mentioned that the new index is likely to be published in two to three months time. This initiative comes, when rents in the city have begun to fall dramatically from its peak during mid-2008. The Dubai rental index which has been released now is based on the figures during that period.

Ghalita said that despite the drop in rents, Dubai still offers good rental yields of up to 10% of the value of property, in comparison to 2-3 percent in other countries.

Labels: Dubai Real Estate, Property Law, Rentals

"; To prevent further cancellations of property projects and to motivate developers to extend payment plans, so as to keep the economy floating, the Dubai Government has stepped in, says legal officials at the Land Department.

A Senior Legal Adviser at the Dubai Land Department, Emad Eldin Farouq, said that the Government is trying to stop the panic.

The RERA (Real Estate Regulatory Authority) and the Land Department will have to give their final approval before the developer could cancel any contracts for all properties purchased after 31st August 2008, it has been confirmed.

31st August 2008 was the date, when the regulation giving authorities opportunity for increased involvement in property sector, was introduced. The authorities, therefore, have better control over the cancellations process and are able to broker agreements between buyers and developers.

As for purchases prior to 31st August, the parties concerned must abide by the contract and authorities will not have much power to mediate in a contract dispute.

The Land Department had also passed a regulation in November, wherein the numbers of cancellations were reduced, based on emergency reinterpretation of Article 11 of Law 13, which stipulates how much an investor would stand to lose on termination or cancellation of their contract.

As per the interpretation, the developer would keep 30 percent of the property value and 30 percent on any payments made after that. According to Land Department officials, such a change was required to avoid a property crash.

The authorities are also in the process of preparing regulations that change the manner in which property is being developed in Dubai, to prevent the sector from overheating in future. The regulations expected to be announced in coming weeks would require developers to enter into payment plans for buyers apart from construction milestones.

In the other regulation, expected to follow the first one, developers should have completed 20 percent of their building prior to announcement of sales. This will help prevent developers from focusing on sales, before making major equity investment in the project, the situation prevalent in the market for past two years.

Labels: Dubai Real Estate, Property Law

"; According to Marwan bin Galita, the Chief Executive of Dubai's RERA, a rent cap is not necessary year.

The companies are cutting down on allowances, and the cutbacks are hitting the rental market in Dubai. According to property agents, the rentals of luxury properties, dropped by 25 percent last month.

Residents in Dubai are still confused about the necessity of a rent cap in 2009, while the cap for 2008 was set at five percent. However, in the opinion of Bin Galita, a rent cap is not required in 2009, as the current year, being a tough one may not interfere much with rents. But, the rental rates should be fair to both tenants and landlords.

Rents in Dubai would begin to decline in third quarter of the year. But, with the market witnessing correction, commercial properties seem more affected than residential.

With increase in job lay-offs, it is likely that more families would leave the country, thereby the availability of apartments and villas would increase. To add to this, about 32,000 new housing units are likely to be released this year, which would further increase the number of units available in the market.

However, as of now, the Gulf News has reported that in the absence of a new announcement, the current five percent rent cap would remain valid.

The Rent Committee feels that the landlords still cannot increase rents beyond five percent, and tenants are free to file complaints against landlords if there is a violation to existing law.

Labels: Property Law, Rentals

"; The Federal Government in UAE is considering the issue of freehold property visas pertaining to foreign ownership of properties in various emirates, revealed a top government official in Dubai on Saturday.

The Director-General of Dubai Government's Department of Finance, when speaking to the media during the sidelines of government's 2009 budget announcement, said that the Advisory Council of Dubai Government has put forward a proposal to the Federal Government regarding issue of property-linked visas for a review.

Several emirates have developed their own freehold visa arrangements, and streamlining the process is being planned at the federal level, to announce a unified guideline for all the emirates.

A new law may be announced soon, he said, although did not mention by when the regulation would be passed.

The issue of freehold visa was on focus when big developers such as Emaar and Nakheel, who were earlier helping foreign buyers to get three-year renewable residence visas on purchase of freehold properties, suddenly stopped facilitating them.

The unified guideline regulation is welcomed by experts in the country, as they streamlined the procedure to keep up confidence of the investors.

The Advisory Council was established by the Dubai Government last year, to judge the impact of global financial crisis on Dubai's economy.

Sudhir Kumar, the Managing Director of Realtor's International, a property consultancy said that the issue of freehold visas has been a major concern for property investors, and the government has shown its strength and resilience at this time of crisis by addressing this issue.

Since the year 2002, master-developers in Dubai have been pledging the freehold visas to attract foreign investment to real estate sector in the emirate. This has also drawn plenty of foreign investment into the sector.

This promise was facilitated to buyers in co-operation with Dubai Naturalization and Residency Department, and master developers in RAK and Ajman have followed suit, by attracting major investments into the property sector.

Among the seven emirates in UAE, five have certain designated areas for foreign nationals to buy and own properties on a freehold and leasehold basis. Sharjah, however, does not permit foreign nationals to own properties on freehold basis.

According to UAE constitution, the land in each emirate belongs to the Rulers, and they take decisions pertaining to ownership, usage or allocation of land.

Labels: Freehold Property, Latest News, Property Law

"; Ajman Government has amended its regulation to create Ajman Real Estate Regulatory Establishment, aimed to regulate the property and construction sector of the emirate. The sector has seen more than Dh.340 billion worth of investment in the last two years.

Due to this investment, the neighbourhood of the once-sleepy Ajman is being transformed into vibrant economy where-in foreign developers are creating master-planned communities on barren sandscapes which would soon be homes to several thousands.

The Member of Supreme Council and Ruler of Ajman, H.H. Shaikh Humaid Bin Rashid Al Nuaimi, passed an emiri decree No.11 for 2008, which amends emiri decree No.8.

The decree stipulates finding of a general establishment, affiliated to Ajman Government, named as Ajman Real Estate Regulatory Establishment, with an independent corporate existence, which enjoys administrational, financial and legal independence.

The establishment aims to regulate the activities of real estate development in the emirate, and establishing a legal system for licensing property buildings and investment projects in the emirate. The establishment also aims to supervise, implement policies, work projects and systems and regulate joint ownership.

The establishment is also responsible for issuing policies for property, construction of buildings in Ajman, and suggesting legislations and necessary systems for regulation the property operational schemes in the emirate.

Labels: Ajman, Property Law

"; Dubai's Real Estate Regulatory Agency (RERA) has completed the much-awaited rental index and is awaiting the approval of the Rulers Court. A senior official of RERA has revealed that the index would be rolled out soon after obtaining approval.

The Director of RERA, Mohammed Khalifa bin Hammad, said that the rental index for commercial and residential units would soon be launched. The regulation for its execution has been already finalized and is awaiting approval of Rulers Court. Once approved, the index will be published in newspapers.

RERA revealed that it is not mandatory for landlords to abide by the rental index, although, a range would be set for residential and commercial units which the people can use to refer for comparing rents in various areas of Dubai. This would serve as a reference point during a dispute between tenant and landlord.

During a dispute, Dubai Municipality or any such concerned authority will have to consult the index before taking any decision. The index would form a benchmark in solving rental disputes, Hammad explained.

RERA has been involved in the index compilation work for the past six months. It has now completed updation until the fourth quarter of 2008.

The current rent cap for Dubai is five percent as of 2008, and the government has not amended the cap ever-since.

The Rental Index would also be a base to calculate rents for the authorities and people concerned, said Andrew Chambers, Managing Director, Asteco.

In mature markets usually a broad range would be available and so introduction of index is a good step for maturity, Chambers said.

View RERA Rental Index 2009

Labels: Property Law, Rentals

"; With several developers withdrawing their projects in wake of global financial meltdown, Dubai is considering tightening rules on property market, say recent reports.

As per a report in The National, the real estate authorities are likely to issue new regulations to help avoid delays and cancellations that have shattered the once-buoyant sector.

Once the new regulation is passed, buyers may be required to pay 30 percent of property price to the developer as a deposit, and the rest 70 percent payment could be made in installments, based on the stages of development.

Developers too, will not be permitted to begin selling units in a property, until 20 percent of the planned project has been completed, as this would ensure that only the most feasible projects proceeds further, revealed Lisa Dale, the Head of Property Department, Al Tamimi Law firm.

Being a member of the seven-strong UAE Federation, Dubai welcomed foreign investors into its property sector in 2002, which triggered the real estate boom through windfall revenues generated from oil prices that touched an all-time high in July 2008. The ever-growing population and investor speculation in the emirate further contributed to surge in property prices.

However, the, international financial crisis and resulting credit crunch has cut down the ability of few developers to complete projects, and this coupled with limited access to loans by buyers’, has resulted in property market slowdown.

Labels: Property Law, Real Estate News

"; Dubai's Real Estate Regulatory Authority (RERA) has introduced a new regulation, wherein the property developers in Dubai would be ranked on the basis of their financial stability and market experience.

Developers registering off-plan projects will henceforth be required to completely own the land first, before registration of the properties, states the new regulation.

The regulation aims to reduce the number of developers and to give RERA a better hand in re-instilling investor confidence amidst falling prices, fraudulent and contractual disputes hitting the sector.

According to another new Regulation passed by RERA last week, aimed in streamlining the property sector, developers in Dubai are not allowed to collect more than 20 percent of the cost of property from the buyer prior to construction.

Head of Trust Accounts, Essa Saeed Ahmed Al Mansoori at RERA's Real Estate Development Trust Account Department said that an 11-member team will monitor the construction process and ensure that the escrow amounts are collected in accordance with the schedule.

RERA continuing to introduce new regulations aiming to streamline the real estate sector of the emirate and protecting all concerned parties involved in property transactions, other emirates where property sector is witnessing considerable growths, too, are following suit.

A Real Estate Regulatory Authority is likely to be established in Abu Dhabi within next couple of months. Ajman Government too, plans to introduce an agency similar to Dubai RERA.

The Federal National Council (FNC) is in the process of preparing draft legislation aiming to regulate the property sector in the country and protect UAE by restricting expatriates from automatically acquiring residency visas through freehold property ownership, so as to reduce dependency on foreign labour.

Labels: Property Law, Real Estate News

"; The introduction of a new system of licensing rules for Realty brokers and online Registration of rental contracts in Dubai in 2009 is expected to make the sector more transparent and also the real estate investors in Dubai will feel safer investing in the emirate's property sector.

Real estate licensing procedures to control the operations of freelance real estate brokers are now set to be operated under one, uniform system, according to an agreement signed by the Department of Economic Development (DED) and Dubai's Real Estate Regulatory Authority (Rera). Earlier anyone who was a national of the United Arab Emirates or GCC could operate as an estate agent. According to the new rules, anyone opening a real estate brokerage will need to apply for a license and meet new criteria to operate.

Marwan Bin Galita, chief executive of Rera, told that those who apply for license should to be over 18, they need a good conduct certificate by CID and They must also under going training and attend courses run by RERA.

The DED will use its own license and business registration system according to RERA regulations for issuing licenses related to real estate activities. RERA will train a number of DED staff on how to use these new licensing procedures. The aim is to make the Real estate agents are qualified to complete real estate deals, and to have ethical standards for real estate agents, brokers and companies.

All tenancy agreements in Dubai must be registered on RERA's new online registration website, Ejari starting in January, so that the final rental index may be prepared by RERA. The rental index will map out rent structures in Dubai and is all set to launch the property rental index at the start of next year.

Marwan Bin Galita, chief executive of RERA said that Registration of all contracts is compulsory, under Law 26. This will assist in finding a rent data base which will make the whole system more efficient and transparent. The online registration, when complete makes it easier for RERA to monitor the rental market and track any landlords or tenants deviating from their tenancy contract.

Along with the recent amendment of law 26 relating to tenancy contracts, the Dubai's rental market is getting a good look. Nearly more than 100 companies have already registered their tenancy contracts on RERA's website.

Labels: Dubai Real Estate, Estate Agents, Property Law

"; RAKIA (Ras Al Khaimah Investment Authority), the government body responsible for the socio-economic growth of the emirate, has revealed that the recent establishment of RAKIA RERA (Real Estate Regulatory Agency), according to an Emiri Decree, has led to increased protection for real estate investors, as the Agency will monitor the implementation of the escrow account law for freehold projects under RAKIA.

Several of the property developers have registered their projects with RAKIA RERA, which now supervises real estate developments worth a total value of Dh.6bn or more. Developers can register with RAKIA RERA once the concept design of the project has been approved. This will enable them to open an escrow account, and begin selling properties. RAKIA RERA will monitor whether the construction is happening as it should be, and will appoint a team of engineers to inspect projects and ensure that the major points in the contract are followed.

The General Manager of RAKIA RERA, Eng. Yahia Kambris, said that the establishment of the new real estate supervisor signifies the interest by RAKIA RERA to safeguard and protect the interest of investors and reinforce the reputation of RAK as an attractive investment destination in the region.

The developers registered under the RAKIA RERA are the developer of Pacific, Manazil Real Estate, developers of Marbella Bay, Pure Real Estate, developer of Blue Mirage, Stallion Properties, and Santorini and e-myproperty, developer of Bab Al Badr, and Yes Properties, the developer of The Quay, all of which are now completing the registration process, will soon open an escrow account.

Several banks, including the Bank of Baroda, Commercial Bank of Dubai, Abu Dhabi, Badr Al Islami-Mashreq, have all signed agreements with RERA to offer Escrow Accounts.

Ever-since its establishment in 2005, RAKIA has been one of the pillars for the economic progress of the emirate, with several groundbreaking investment initiatives in the emirate and across the international markets.

Labels: Property Law, Ras Al Khaima

"; UAE has placed a draft legislation that restricts expatriates from automatically acquiring residency visas through freehold property ownership, revealed a Federal National Council (FNC) member.

The Council will soon submit draft legislation on freehold properties to the government, which is hoped to unify the divergent law pertaining to the sector in the seven emirates.

One of the Council members, Dr. Abdul Rahim Shaheen, said that the council was considering implementation of the proposed legislation as quickly as possible.

With seven emirates handling freehold property under various rules, there has been utter chaos in the sector. The government plans to issue a federal regulation which unifies rules on dealing with foreigners with regard to freehold of properties and imposes strict punishments against those who exploit ownership for generating public interest.

He said that the issue has endangered national interest and UAE's identity as the Emiratis are being outnumbered by expatriates, due to which, few residents have begun demanding rights.

Expatriates are not entitled to 25-year residency through owernship of a property, clarified a senior official at the Ministry of Interior.

The Director of Legal Department, Ministry of Interior, Col. Rashid Sultan Al Khider, when speaking to the media, said that the Naturalization and Residency Law does not have a clause that permits expatriate property owners to obtain a 25-year residency visa.

This clarification by the Ministry regarding implementation of a new law by FNC, came, following the practice of several property developers advertising residency visas with their property sales.
Col. Rashid said that such advertisements by property companies are not right, and is in violationg of Naturalization and Residency Law, which stipulates expats in the UAE are here either for study, work, medical treatment, or tourism or are sponsored by family members.

Therefor, the FNC's plan to implement a regulation on freehold property coincides with the current situation, wherein, property marketing companies are adopting wrong practices to hit the society.

Labels: Freehold Property, Property Law, UAE

"; The Dubai Land Department, the government body which monitors land-related affairs and private properties within the emirate, together with RERA (Real Estate Regulatory Authority), has announced the official launch of 'OQOOD', the new online application that enables the implementation of Law No.13 of 2008, which regulates the interim real estate register in Dubai.

The announcement, which came during an introductory seminar organized by the Dubai Land Department and RERA, organized for benefit of property developers in the emirate. The Dubai-based KM Properties sponsored the event.

Assistant Director General Excellence & Organization Governance, Mohammed Sultan Thani, said that Dubai has witnessed the issuance of real estate laws that prioritize the interest of country and all industry stakeholders. The laws aim to create trust in the market, attract foreign investment and sustain the growth of the sector. The latest law focuses on interim real estate register.

Developed by Emirates Real Estate Solutions for the Dubai Land Department, the process of 'OQOOD' online interim registration process will help minimize conflicts between developers, sellers and investors, while also reducing the growth of off-plan sales and reselling costs.

Charges levied by the Dubai Land Department would remain the same one percent of total value paid by seller, and the one percent paid by consumer.

According to analysts, the new registration scheme will bring about higher transparency levels and eventually create an online Propety Price Index (PPI).

The Chief Executive of Emirates Real Estate Solutions, Ahmad Al Qaizi, said that the online launch would facilitate availability of detailed data on private proprietorship of all properties that have been sold off-plan in Dubai.

It will protect the rights of customers by safe-guarding development against any manipulation, and also safeguards the interest of developers, investors and end-users and the government. The move also depicts seriousness from the end of government in raising transparency, Qaizi said.

About 80,000 units or more have already been registered through the online registration facility so far.

Labels: Latest News, Property Law

"; The last date for registration of off-plan properties, under the pre-registration system, by the Dubai developers has been extended till the year-end. Earlier the first week of November was declared as the deadline for registration of off-plan properties.

According to a senior government official, the projects launched prior to introduction of pre-registration system, being sold as off-plan now, will have to register by the year-end. Stringent measures would be taken against those failing to do so, the official warned.

The Assistant Director-General of Dubai Land Department, Mohammed Sultan Thani, said that following the issuance of Law No.13 of 2008, developers are required to register all their units before launch with the Land Department, and only then proceed with their sales.

The Law No.13 regulates initial property registration in Dubai, and aims to create further safeguard consumer interest in the Dubai property market through introduction of mandatory system of pre-registration at the Land Department for off-plan sale contracts of property units.

As per the new regulation, any off-plan sales without registration will remain invalid. Off-plan sale implies the sale of real estate units on the basis of architectural plan of the property prior to building the structure. The registration has to be done by the developer and not the first purchaser.

During the secondary sale, the seller will have to keep the department informed and register the deed by paying necessary charges. In case of home mortgages, banks will have to register the deals and not the mortgagee, Thani said.

Labels: Latest News, Off-plan, Property Law

"; With an aim to introduce major transformations in Abu Dhabi property market, Abu Dhabi plans to introduce real estate regulations as that prevailing in its neighbouring emirate Dubai.

Al Tamini, the Dubai-based Law firm, is on discussions with the Department for Municipal Affairs in Abu Dhabi, which handles real estate legislation for the emirate. The firm has suggested introduction of strata, escrow and broker laws, to improve regulation, and provide investors the much-required confidence when investing in the region.

During the year 2002, Dubai introduced freehold ownership of property in chosen areas, sparking its six-year real estate boom. The proposed introduction of laws would essentially focus on the change in freehold ownership of land.

The Associate Lawyer at Al Tamini's Abu Dhabi office, Walter Robinson, said that the investors comfort was the most important and that it is vital for the investors to know that they are investing in a property that has a real estate title deed, the system of ownership of which, is recognized on par with the best international practices.

According to Robinson introduction of freehold ownership rights is a vital and fundamental change to property laws in Abu Dhabi.

"An Escrow Law protects investors and ensures that developers actually deliver projects. This legislation is being considered by Abu Dhabi to cover residential and commercial properties," he revealed.

Labels: Abu Dhabi, Property Law

"; With more new regulations introduced, which holds developers accountable for delays in projects, investors in Dubai's real estate sector will no longer have to worry about frustrating project delays, reports the Gulf News.

The Law No.13 and 14, intends to increase transparency in the property market. According to officials in the Dubai Land Department, following registration and approval, all property information will be fed into the system. Hence all details of the project will be readily available and there will be no reason for delays. Law No.13 mandates all developers to pre-register their off-plan properties with the Land Department to form a full database of property transactions. Law No.14 makes it easier for Banks to obtain proof of land titles.

Both Law No. 13 and 14 were made effective last week. Law No.13 ensures that developers register all their projects before launching sales. No one can release a project unless approvals are done, and the approval must be sought from five specified government bodies including Dewa, RTA, Dubai Municipality, Land Department and RERA, said Bin Galita, the CEO of RERA.
Currently few developers are seen demanding a deposit on the unit prior to giving a purchase agreement. As per Law No.13, as soon as the deposit is paid, the sales and purchase agreement should be given immediately.

The new law also stipulates a certain acceptable increase in floorplan of a unit. On completion, however, if the floorplan is smaller than stipulated, the buyer can claim compensation.
The Law No.8 states that developers are given six months time from registration to begin construction of a project. The developers are not allowed to cancel a project without informing the Land Department.

To further increase transparency in the market, the property court will begin operations during first week of October. So far about 96 cases have been solved through mediation by the Land Department. About Dh.200bn worth of transactions are so far registered with the Land Department.

Labels: Dubai Real Estate, Latest News, Property Law

"; With the new law emphasizing that all its off-plan units be registered with the Dubai Land Department, the real estate market in Dubai is a far safer place for investment now, reveal legal consultants.

"The law is a step ahead in the vision of Dubai to develop a well-regulated property market, with particular emphasis being laid on consumer confidence and transparency"said Will Grinter, Legal Consultant, Clyde &Co., an international law firm.

Law No.14 will become effective in Dubai on the publication of next issue Government Gazzette. With large numbers of complaints pouring in from investors, in the off-plan market in particular, this new law will boost the security aspect in investments, and will a shot of much-required confidence in the market as a whole.

Apart from offer protection to off-plan investors, the new law will also enhance transparency in dealings of the secondary markets in off-plan property, and will also facilitate the registration process upon completion of development.

Grinter also warns that the new law does not include any special provision regarding project delays or cancellations, although RERA holds investigative powers.

A property court, due to begin operations soon, will deal with real estate disputes and is another positive step to ensure complete transparency in the market. Grinter also revealed that the new law would bring in a mandatory procedure that needs to be followed by any developer looking to end sale and purchase agreement.

Labels: Dubai Real Estate, Off-plan, Property Law

"; Dubai has passed on a new regulation to regulate the sale of real estate that are under construction so has to put an end to speculation which has been the cause behind the skyrocketing property prices in the emirate.

As per the law issued this week, sale of off-plan properties in Dubai need to be registered with the department prior to which, they cannot be resold, said Marwan bin Ghalita, Chief Executive, Dubai Real Estate Regulatory Authority (RERA).

The Standard Chartered Bank, last month, has warned that the property sector in Dubai showed signs of overheating, as speculators who have been betting on quick returns inflate prices of units that are still under construction.

Speaking about the new law, Bin Ghalita expressed his confidence that it would help curb speculation. In Dubai, laws are being introduced step by step. Further, everything is transparent as it is with the Land Department.

The property prices in Dubai have surged 79 percent since 2007, said the Morgan Stanley report, earlier this month.

Demand for properties in Dubai, the home to tallest tower in the world and three man-made islands have been increasing ever-since the government permitted foreigners to invest in properties.

The off-plan law follows the mortgage law which was passed last week, aimed to regulate the booming property sector of Dubai.

It will also prevent master and sub-developers from charging transfer fee on off-plan sales, Bin Ghalita added.

The Developers, however, can be paid with an administration fee of Dh.1000 to Dh.3000 for every transaction, once it has been approved by the Land Department.

The property prices in Dubai is likely to increase by 35 percent this year, and by another 8.5 percent in 2009, and then Dubai takes measures to weed out short-term speculators.

Labels: Latest News, Property Law

"; It has been made mandatory that off-plan property sales in Dubai be registered with the Land Department of the emirate, and no developers will be permitted to charge transfer fee on such sales, according to a new law announced yesterday.

The Law No.13 of 2008 aims to regulate off-plan sales, and mandates registration with the land department, said Emad Eldin Farouq, Senior Legal Advisor, Land Department.

The practice of marketing residential or commercial units based on an architectural plan of the property, prior to building the structure, is termed as 'off-plan sales'.

"Any sale or disposition that transfers or restricts title will be void, if not registered in the interim real estate register," states the new law.

Hence any developer, who markets or sells other disposition prior to implementation of the law, will have to register it within 60 days, Farouq clarified.

The law also states that master developers and sub-developers will not be permitted to charge transfer fee on off-plan sales, henceforth. However, they will be permitted to accept administrative charges once it has been approved by the Land Department.

The Chief Executive Officer of Dubai Properties Group, Mohamed Binbrek, agreed that this is surely good news, as the interest of small investors and buyers will be protected, and that the Land department will now regulate the market. The new law is likely to add credibility to the market.

Last week, Dubai passed on a new mortgage law, which states that mortgage contracts need to be registered with the Land Department, and specified the size of the loan, the repayment period and the value of the property to which the loan is linked.

However, developers say that they will insist payment of a minimum of 20 to 30 percent of the property value prior to transferring to a second buyer under a resale transaction. They will also screen customer profiles prior to selling the property off-plan.

"he initial transfer and sale of off-plan properties will be permitted only after payment of 30 percent of total property value,"said an Emaar spokesperson.

Labels: Dubai Real Estate, Off-plan, Property Law

"; Dubai's Real Estate Regulatory Authority (RERA), was due to release the norms for property index, by March this year, but, has now been postponed to early next year. RERA has decided to take its time to release what is expected to be, the most-awaited index in Dubai.

However, the Emirates Business has revealed some of the elements included in the index, which have been decided upon by RERA. A formula has been worked out by RERA for calculation of correct rent for a flat or villa, so as to bring out a reasonable reflection of rates in the neighbourhood.

The index will help landlords from exaggerating rents, said Mohammed bin Hamad, the Director of Rera Owners Relation Regulations Department. RERA has defined average annual rents for studios, single, double, and triple bedroom apartments and single and compound villas. The index is not legally binding, but, is more of an indicator.

The property index will establish rents, not only for a building, but, for each apartment within it. For instance, flats that face a road or are bigger than others will draw higher rents than those that face a backstreet, or are smaller in size or are situated at the corner of a building.

Also, all registrations and contracts for both residential and commercial units would be fed into RERA's database at the beginning of next year.

Labels: Property Law

"; The Dubai Department of Economic Development (DED) and Real Estate Regulatory Authority (RERA) in Dubai has entered into a partnership deal to improve the quality of support services offered to real estate investors and customers.

The Deputy Director General for Planning and Development, Khalid al Kassim, and RERA Chief Executive Officer, Marwan Bin Ghalaita, signed the agreement during a signing ceremony recently heald at DED headquarters in Diera.

According to agreement, RERA will use the license and business registration system applied by DED for issuing licenses pertaining to real estate activities. This is intended to ease licensing procedures pertaining to real estate activities and will enhance the overall performance of Dubai's real estate sector.

The agreement is in accordance with strategic objective by DED to constantly review its existing procedures so as to simplify its rules and regulations. The business registration system at DED has been streamlined and made more user-friendly. Investors can now set up businesses with minimum procedures and paperwork, and DED will assist them by co-ordination with other government authorities and departments.

Al Kassim said that through this agreement with RERA, the company is emphasizing its commitment to work together on initiatives that support the progress of realty sector in Dubai.

According to Marwan Bin Ghalaita, RERA will form the basics of licensing for real estate activities and execute procedures that hasten the issuance of licenses for such activities. Through joint initiative, RERA and DED will explore mutually beneficial opportunities that enhance the quality of support services offered to realty investors and customers.

Business owners holding old licenses can correct their status inline with the new regulations. RERA is looking forward to launch real estate activities that adhere to international criteria for real estate licensing, Ghalita added.

The activities included in the list of real estate activities are consultation, realty development, selling and renting, brokerage in buying, buying land and real estate, rental services, organizing public auctions, timeshare residential units, timeshare residential units rental services, real estate pricing services and all real estate future activities.

DED was established in March 1991 aiming to organize, regulate, and boost trade and industry in the Emirate of Dubai.

Labels: Dubai Real Estate, Property Law, Real Estate News

"; Dubai's RERA (Real Estate Regulatory Authority) will soon create a property court, which is likely to begin operations in September.

At present, although majority of dispute cases are attended to by RERA, the disputes do not make it to the civil court, as investors will have to wait for a certain period, ranging from 18 months to 3 years.

However, with the new court likely to be introduced, the end-users, tenants, investors, developers and contractors can have their disputes heard in a shorter time-frame.

Michael Kortbawi, a Partner at Bin Shabib law firm, said that RERA is already loaded with work. On establishment of the new court, it will have a better understanding of the market than the civil courts.

Real Estate is a major contributor to the revenues for Dubai government.

Labels: Dubai Real Estate, Property Law

"; The government in Ras Al Khaimah plans to offer long term residence visas (more than three-year residency permits) to property buyers, revealed a top government official.

The Ras Al Khaimah Government is making an effort to facilitate long term residence visas to property buyers, announced Dr. Khater Massasad, the Chief Executive of RAKIA (Ras Al Khaimah Investment Authority).

Dr. Khater said that he hopes that this will happen in future, and boost foreign investments in property sector.

At present, UAE grants a three-year renewable employment and residence visas to expat workers and professionals in private sectors, sponsored by their employers and spouses, while the public sector employees are granted a five-year visa.

The discussions are on regarding issuance of long-term residence and business visas that are likely to help expatriate investors and businessmen in boosting investor confidence. This initiative, if successful, will boost investments further. Currently property investors are granted three-year renewable residency permits, facilitated through offshore companies and developers.

There is no federal law that guarantees residence visas to property owners, and it is being facilitated through companies. The companies sponsor the residence visas of investors. This enables investors to get their visas, while also being able to live in these properties.

Labels: Latest News, Property Law, Ras Al Khaima

"; More transparency likely in property-related matters, say developers

Dubai will house a new realty court which deals exclusively with property-related cases from September, announced a top official at the Dubai Courts.

The Judge Mohammed Yousuf A Sulaiman, the Deputy Director for Dubai Courts and Cassation Court's Senior Judge, has revealed that the Property Court will be established as per Law No.1 of year 2003, under the main section of the court called 'The First Instance Court.'

It will include jurisdictions over all properties in Dubai, except those associated to Dubai International Financial Center, which has its own judiciary system.

Yousuf said this is being done as per the directives of H.H. Sheikh Mohammed bin Rashid Al Maktoum, the Vice President and Prime Minister of UAE, and Ruler of Dubai. Following the success of the Labour Court, this new court specializing in all property related matters is being launched.

The Chief of the Court of First Instance (Properties Court), Judge Abdul Qadir Mosa, will be responsible for setting up the property court.

At present all property-related cases are being tried under the Civil Law. In case of any new law being enforced within the jurisdiction of the property court, the law will override the Civil Law for all property cases, said the judge. The judgment passed in the property court, can be confronted in the Appellate Court.

There will be a minimum of ten judges in the property court, and the numbers would vary depending on the number of property-related cases.

Yousuf said that currently there are no cases pertaining to real estate issues that are pending at the Dubai Courts. The Dubai Courts do not hear rental disputes, which is solely being dealty by the Rent Committee of Dubai Municipality.

The establishment of this property court is expected to bring more transparency among developers in Dubai, while investors will continue to be inclined towards taking risk, agreed developers and analysts.

Following the announcement of establishment of the court, the Chief Executive of Amlak Finance, Arif Alharmi, commented that the establishment of the property court is a positive development as real estate market is heading towards maturity, and the value of transactions are on the rise.

Arab Richardson, the Nakheel Spokesperson, said that this court would help in efficiently dispensing matters pertaining to property ownership and mortgage enforcement. This move marks a part of futuristic development of legal process pertaining to property industry.

The Director of Research in EFG Hermes, Stephan Schurmann said that investors would be willing to take risks and there will be less illegal activities by developers. However, the question remains as to how well the court would be implemented and how the structure and setting up of the court would be.

The Chairman of Pearl Dubai, Abdul Majeed, agreed that it is a good initiative and will boost market confidence, and will bring more regulation and transparency to the market, while the property disputes too will be solved quickly.

The Tamweel CEO, Wasim Saifi, says that the initiative to create a separate court, by itself, shows the significance that the Dubai Government gives to realty sector. This specific court meant for realty sector will help in crossing hurdles bringing in greater transparency.

The court should work in co-ordination with RERA, rather than developers having to deal with multiple bodies, as at present the Land Department and RERA handles property cases. It should be brought under one umbrella, the Executive Director of ETA Star Properties, Abid Junaid, was quoted as saying.

Labels: Dubai Real Estate, Latest News, Property Law

"; The expatriates are less likely to buy properties in Dubai henceforth, following the new regulation by the emirate's real estate regulator, that homeowners are not automatically entitled for long-term residency rights, reveals media reports.

Marwin bin Ghalita of RERA (Real Estate Regulatory Authority) in Dubai, had mentioned that Dubai will introduce short-term visas for foreign investors in the realty sector, and that "there is no direct link" between owning a property in Dubai and obtaining long-term residency rights.

These comments were quite contrary to the earlier statements made by local developers such as Emaar Properties, the leading real estate firm of Arab world.

Dubai, being the commercial hub of Arab world, has been witnessing a property boom ever-since the government permitted foreigners to invest in properties during 2002. Thereafter, a real estate regulation issued during 2006 permitted foreign freehold ownership in certain localities.
Expatriates from neighboring countries such as Pakistan, Lebanon and Iran, who have been facing political instabilities in their respective countries, were being lured to Dubai, over the assumption that owning a property here would ensure long-term visas to them, as it would prove to be a huge asset for them if situation in their own countries turned sour. Dubai was the only market in the region, offering such a link.

The recent comments by bin Ghalita, has now left the foreigners doubtful about the promise of residency from developers, including the Dubai Properties and Nakheel, which are state-owned and has legal backing.

"Developers should not lure investors to property sector with the promise of a residence visa," bin Ghalita commented.

The existence of "safety homes" in Dubai was a main factor for the huge property demand, and any decision on the part of regulators to review the visa status of existing homeowners would bring about "legal hazzles" and may badly hit the image of the emirate, says the media.

Owners are likely to feel that they have been offered a worthless investment, particularly, with the developers being close linked to the state in Dubai.

Already the shares of Emaar Properties slipped 0.45 percent and that of Union Properties by 2.68 percent, following the announcement by RERA on Tuesday.

In the meanwhile, the regulator has submitted a proposal to the government to grant visit visas to foreign homeowners, which may also be made applicable to existing homeowners if approved, revealed bin Ghalita.

About 80 percent to of UAE population are foreigners, with majority from the Indian subcontinent, Iran, and other Arab countries.

Labels: Latest News, Market Trends, Property Law

"; A new property law has been issued in Ajman, which is expected to take the property sector in Ajman to further heights.

The Member of Supreme Council and Ruler of Ajman, H.H. Shaikh Humaid Bin Rashid al Nuaimi, issued Amiri Decree No.7 and 8, 2008, to regulate the land and property sector in the emirate last week.

The prices in Ajman's property sector have climbed up from Dh.350 per square foot to Dh.500 per square foot over the past six months. Billions of dollars are being invested in the property sector of the emirate, and the growing housing sector in Ajman has drawn considerable interest from the investors.

The 34 articles in the decree legalizes freehold ownership of property and land for UAE and GCC citizens, and the companies wholly owned by them, as well as to the public stock companies. GCC buyers and developers also have the right to own land and properties on freehold basis or on 50-year leasehold basis, renewable in designated areas to be determined and approved by the Ajman Ruler.

The law designates the Department of Land and Property to regulate the sector, and the department is entirely responsible for registration of property rights and long-term leasing contracts.

The bank guarantees need to be deposited for those wishing to invest in Ajman, and that amount should be used only for the project. An amount of five percent of project value will be frozen and will not be released until completion of construction of the project.

The Law stipulates that a developer cannot advertise projects without written approval from the department. The developers will be responsible for maintaining the project for ten years, following handover.

The law mandates a fine of Dh.100,000 on those who practice real estate business in the emirate without license.

Labels: Ajman, Latest News, Property Law

"; Ras Al Khaimah has passed an order freezing the new rent law, and has announced that the earlier law would remain effective until 1st October 2008. In the meanwhile, new amendments will be done to the new legislation.

A senior government official revealed that the controversial Law No.8 for 2008, issued during 26th May 2008 required amendments, as it was vague.

The new law which states capping of rent increases at five percent for residential properties and seven percent for commercial properties has been criticized as it leaves landlords with an upper hand.

According to the official, Article No.24 of the new law has many interpretations, which gives landlords the right to evict their tenants. This aspect is being reviewed. Besides, the residents had been approaching the Rental Dispute Authority, and the Courts, with enquiries, questions and complaints.

The Rental Dispute Authority is yet to invoke the new law in any dispute, and has not accepted any dispute cases, as it has been awaiting the clarification of the new law from the Emiri Court.
The official revealed that by re-imposing the earlier law with 15 percent rent cap is being done to protect the rights of both tenants and landlords.

Ever-since the announcement of the new law, people have been complaining that it is vague and unfair to the tenants, as it gives the landlords the right to evict them and re-rent the properties.
Several landlords had approached the courts to file eviction cases, but their cases were put on hold, until the government decided to enforce the older law.

Labels: Property Law, Ras Al Khaima

"; The implementation of bylaws of Law No.3 of 2005 issued by the President, H.H. Sheikh Khalifa Bin Zayed Al Nahyan, for regulating property registration, has already commenced in Abu Dhabi.

The Chairman of the department, Dr. Jua'an Salem Al Daheri, said the property law and its bylaws are being issued to keep pace with the comprehensive development in Abu Dhabi. The bylaws are being issued taking into account public interest after consultation with associated parties.

The bylaws are aimed to regulate affairs pertaining to property registrations in the emirate. This includes the terms and conditions of real estate activities, the parties involved, along with their jurisdictions and responsibilities.

Other factors stipulated in the bylaws include specialties of property registration department, attestation of signatories, search memos and transaction certificates, and terms and conditions of selling and buying properties.

Labels: Property Law

"; The Dubai Land Department (DLD) has granted permission to the First Gulf Bank to open Escrow Accounts for the registered property developers of the department. The DLD is the 'only' real estate title registry in the emirate to approve the Bank to open and manage Escrow Accounts.

The Escrow Accounts that are operated by the First Gulf Bank will be regulated by RERA (Real Estate Regulatory Authority) which currently licenses about 400 developers in the Dubai market, and is the authority behind implementing the new escrow account law.

The Head of National Housing Loans, at the First Gulf Bank, Al Ghafli, said "The new RERA rules are a major step ahead in the maturing Dubai market. These rules protect the interest of both developers and buyers, while the investors feel secure that their funds are safely deposited by a reputable financial institution, like the First Gulf Bank."

First Gulf Bank has a good reputation in the real estate segment within UAE, offering a range of financial solutions to investors and developers alike. The Escrow Account Law was issued by the Dubai Government last year, aiming to control the malpractices by property developers, and enhance the standard of the Dubai real estate market.

Labels: Dubai Real Estate, Mortgages, Property Law

"; A senior government official has revealed that, as per the new Condominium Law, the property owners have been assigned the responsibility of levying service charge on freehold premises. Hence master developers will no longer be able to levy exorbitant service charges on freehold premises.

The Article No.22 of the Condominium Law (Law N0.27 of 2007) states "The owner of each unit shall pay to the Owners Association, his share of yearly service fee to cover the cost of management, maintenance, operation and repair of common parts."

This share will be defined on the basis of the area per unit, out of total area of joint property. The developer, irrespective of being main or subsidiary, will have to pay its share of fee for unsold units. No owner of any unit will be allowed to give up his share of common parts to avoid paying the yearly service fee, states the article.

At present, the master developers and property developers of individual towers who are developing major neighbourhoods in the freehold and leasehold areas in Dubai, are fixing and levying service charges at the rate of Dh.8 to Dh.12 per square feet, which is considered very high. This has led to conflict between home owners and master developers are freehold areas.

As there have not been any proper laws, some developers have levied even higher charges which have led to discontent of the buyers. With the new Condominium Law in place, the situation is expected to change for the better, as property buyers can dictate and fix service charges of their own premises, rather than depending on the developer.

The Condominium Law, which compliments the freehold Property Registration Law, is also expected to help facilities management sector and the maintenance firms, as it will open up freehold neighbourhoods for competition, which have been otherwise, so far, monopolized only by master developers.

Labels: Dubai Real Estate, Property Law

"; The Annual rent cap in Abu Dhabi has been reduced from 7 percent to 5 percent yesterday. This was done to regulate the high rentals and housing crisis in the emirate. The decision is to take effect immediately.

The decision has been issued by the Abu Dhabi Executive Council, based on Law No.20 for 2006, that speaks about landlord-tenant relationship, and aims at curbing the negative impact of high rentals on the emirate's competitiveness, sustainable economic growth and social stability.

Such a move has been initiated in response to recent reports which pointed out an unprecedented increase in rents. The new contract will remain subjected to inflationary pressures, based on factors such as the cost of construction, and shortage of supply.

The Chairman of the Construction Committee, Khalfan Al Ka'abi, said "This is a step in the right direction, and this will have a real effect on residents. However, some more time may be required to solve the housing crisis completely."

Certain units will be delivered this year, but, the majority of the units will be delivered to the market only in 2009, and this supply would ease the market to a great extent, he added.

Labels: Abu Dhabi, Property Law, Rentals