Sunday, March 4, 2007

Real Estate Laws, Restrictions and Ethics Yet To Take Hold in Dubai

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.

11 comments:

Anonymous said...

good job

andrea mihok said...

Nice article. Great details which gives you a better understanding of the country s real estate situation. The only negativum about your writting, in my opinion is the lenght of your sentences, but otherwhile I did enjoyed reading it, so just go on like that...

Anonymous said...

Dave said...

A good and informative piece. I think those people who want to make important decision in regards to buying premises or invest in real estate can really realize the amount of risk they have to both take and assess.

david valker said...

nice and entertaining article, you were using internet sources smartly, it really feels as if you would have been in Dubai to make interviews with real estate people.

meredith said...

I am impressed by all of your research. It sounds like a real article in a newspaper. Nice efforts!

herman said...

I liked the way you revealed how there's a shady side in Dubai real estate, which gives a warning to potential buyers.

niko said...

nice article, it looks like you worked a lot on it.

eugene said...

excellent article,nice precise points,you went straight to the point,but please also consider this article will reach a wider audience and try to simplify your grammer structure to make it readable and understandable to all.good job.cheers

eugene said...

nice article,you were accurate and layed down your points accurately,there was tremendous well documented research,well done.but please be aware that this article is going to be read by a wider audience,simplify your vocabulary so it can appeal and be understood easily be everybody,good job though.cheers

ugo said...
This comment has been removed by the author.
ugo said...

This is a good article and very informative. I liked the way it was carefully written, but not easily digested. I think you should try to shorten your sentences and also use more simple words for the readers to digest easily.