By ODUMAH BOMATEIWARI
Dubai’s real estate is about to take a new phase as its government, together with top real estate builders, embarks on measures to clean up the sector; this in hopes of lifting tensions surrounding the safety of the tiny emirate's real estate markets.
Inflamed already with an increasing number of unqualified freelance brokers, operating in the sector, the Dubai market has witnessed an increased number of complaints over cheating, illegal transactions and a lack of professionalism among brokers, says Khamis Mohammad Al Muhari, head of land valuation and studies centre at Dubai land department. Examples of such misconducts include brokers selling properties they do not have the right to sell, those that buy properties for themselves or their relatives and sell it off at a higher price, and cases where agents charge clients regardless of their failure to provide sufficient brokerage service. Other misconducts mentioned by Al Muhari include the collaboration of agencies with one another. In order to get phone calls from potential clients, agencies post advertisements even when they do not have anything to offer. After receiving a call, they look around for agencies that have the same properties and split the commission or add an extra commission to the poor unsuspecting client who ends up being offered the same apartment ten times over by different agencies.
As part of its efforts to correct the situation on the ground, the Dubai government drafted new regulation in May 2006 aimed at banning freelance brokers as well as unlicensed real estate agents, but this was not enforced until the 4th of February 2007. The new regulation allows for a new broker registration law, which effectively rejects all sales and transactions carried out by unlicensed real estate brokers in Dubai.
The land department in Dubai currently refuses to register sales transactions by brokers who are not officially recognised by the government. This could go a long way in helping the land department gather data-base of real estate firms and individuals that operate in Dubai, says Al Muhari. It will also signal the government’s commitment to ensure that land transactions in Dubai are foolproof, secure, competent and transparent In addition, legitimate brokers will receive registration cards issued by the government to transact real estate deals. Under the new law, individuals are expected to pay Dh500 fee for registration, while firms are to payDh5, 000. Given a one week frame of time, real estate agents, have begun registering with the Dubai land department.
The removal of unqualified real estate brokers is believed to be a step toward remolding the credibility of the Dubai real estate market. Given all this, the department will subject agents as well as companies to a training program and a series of professional tests to weed out those who don’t make the grade. Craig Johnson, general manager of Landmark, a Dubai-based property consultancy, says that the process will be beneficial to both clients and the industry as a whole, since it allows for transparent and professional structuring - a condition which the industry has been sadly lacking and hence leaving many clients with extremely bitter experiences.