Freehold property buyers in Dubai fully entitled to a residence visa

Dubai officials have confirmed that anyone who buys a freehold property in the emirate is fully entitled to a residence visa in the emirate through the master-developer, reported Gulf News.

In recent weeks there has been widespread concern among property buyers about this issue, with some believing that master developers had broken the contract as visas had not been issued.

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Regulatory law on housing loans

President HH Sheikh Khalifa bin Zayed Al Nahyan, in his capacity as the Ruler of Abu Dhabi, has issued a law restructuring the statutes regulating the housing loans for citizens in the emirate.

The Law No. 9 (Year 2008) is meant to support the welfare of the citizenry and raises the maximum loan limit from the current AED 1.2mn to AED 2mn repayable within 30 years in equal instalments.

The new law also gives the debtors repayment exemptions which range from 15 to 25pc of the total loan provided they fulfil conditions specified by the articles of law.

Article 21 of the new law also exempts a citizen from repayment of the total amount if he becomes bankrupt or unable to earn.
/WAM/

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The term facilities management has become quite fashionable

With the handover process starting in earnest within Dubai’s freehold space, their facilities management has become one of the hottest topics of interest. What should be the tariffs attached to these services and how much control should the owners of these properties have when it comes to fixing them.

These are still unexplored territories, but that have been injected with a sense of urgency with the Strata Law coming into effect. At the same time, specialist facilities management companies have been quick to realize the good times that are coming their way.

In a chat with Property Weekly, Dilip Khatwani, Chief Executive Officer of reliance FM, offered his insight into the shape of thins to come.

Q: With the Strata Law, is this the breakthrough that FM companies have been looking for?

A: Strata Law basically defines the powers and obligations of any homeowner. When an owner realizes his asset will be in trouble unless he does not manage it right, he would definitely want to take care of that. There is a huge market already for the FM companies the Strata Law will further spruce up things.

The FM industry has already broken through, I do not think the Law would do that per se. in fact, across any region, such a low does not necessarily lay stress on the FM industry. It automatically develops an FM outlook in its structure.
There have been wide disagreements on what the median service and maintenance charges should be.

Q: Do you think a consensus will continue to elude the market on this score?
A: Service charges, the way I understand it, have fixed formulas. Whenever you talk about service charges to a new market, there is always a debate.

This is on going until people start living in their apartments/villas and they realize the importance of maintenance. So basically the market is learning to define what should be the component of a service charge.

We are getting projects now where we are calculating services charges right at the design stage. It is a fast-emerging transition market and you will realize that another two years, the city will value service charges as an important component.
There will be a consensus, and yet you will have a buyer who will ask you as to why this should be included.

Q: With the creation of homeowners associations, do you see a move towards signing on FM companies offering the lowest service charge at the expense of quality? Is there any move on setting a tariff band among leading FM companies to ensure minimum base charges?
A: Yes. When the homeowner’s association was initially formed, there will always be people who want to pick the cheapest in offer till the time when you start living in the space and see for yourself your asset depreciating rather than enhancing.

To set a tariff band will be a tough thing to do in a country with 200 nationalities (as much if not more). It is difficult to set up a benchmark that this is the minimum we are going to charge.
You could still try to set minimum pricing, but will have a variance of 15 per cent, which is the manpower component. Every company has found its own niche and has found its own economy to work with. I do not think that will happen even if the market matures especially in Dubai.

Q: Along with the opportunities, the facilities management industry has to face up to challenges. Which is your biggest worry at the moment?

A: The biggest challenge today for the industry is how to plan and get your human resources right. In the coming five years, the FM is transitioning in any region or country; you see a lot of interest from developers as well. My experience has been that it is not a long way through.
Until the time developers realize their business differs quite a bit from the FM industry, which is more technocratic in terms of the input: output ratio differing quite a bit.

The market is huge at the moment for everybody and to think the city is still setting up its framework. Having said that, 10 years down the line yes you will see less developers getting into FM when they realize their returns are getting lower and they would rather outsource to other FM companies.

Q: Are you looking to align with any major developer(s) to expand your own sphere of influence in the respect?
A: We are working with all developers to manage their towers, but do not have exclusive agreements with anyone so far. We have received few offers from developers for partnerships. However, so far, we feel that if we tie up with one, other developers get away from us.

Q.: Are you looking at other regional markets? There has been talk about Qatar? Is it already a done deal?

A: Qatar – we have a few projects there and this year hope to open an office. Another market we are seriously looking at is Saudi Arabia. That is a huge market for us as well as Kuwait and Malta, we have done 10 million square across the board.

Q: There is a belief that some of the global FM majors will start making a pitch for this market very seriously in the days to come. Are local players equipped to meet it?

A: A few of the big players are already here. I think there will be more to come. The local developers are absolutely ready to meet them.

You will be surprised how fashionable a term facilities management has become. Currently there are 5 key players and 20 smaller players in the region. There are more to come.

Q: Which according to you are the evolved FM markets?

A: Europe, Australia, the US are evolved. In Asia, the concept of FM has been there for fifteen years.

However, for regions to take a holistic approach that is not yet there in too many places. That is why the FM professionals are looking more and more towards the Middle East, which is rather unique.

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“We cannot let people promise and not deliver in Dubai”

Four property companies are being investigated by Dubai’s real estate watchdog over what appears to be the non-delivery of projects, the regulator revealed on Sunday.

Speaking at a Dubai Property Group meeting, Real Estate Regulatory Agency (Rera) CEO Marwan bin Ghalita said four firms were currently being subjected to an "internal audit of transactions”, UAE daily Emirates Business 24/7 reported on Monday.

“We cannot let people promise and not deliver in Dubai”, the newspaper quoted bin Ghalita as saying.

Bin Ghalita declined to name the developers under investigation or give further details.

The authority was seeking a transparent relationship between parties and rules and regulations would be “strictly implemented”, bin Ghalita said.

Rera was also addressing a range of other issues, including developers making misleading claims or charging percentage transfer fees when they were only entitled to claim administration fees, the newspaper said.

The announcement is the latest blow to the emirate’s real estate market, which is reeling from recent controversies surrounding high-profile developers Deyaar and Damac Properties.

Deyaar is being investigated for alleged financial irregularities, with four people detained so far by Dubai Public Prosecution, including former Deyaar CEO Zack Shanin.

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Will leisure real estate gain from the new timeshare laws?

The leisure real estate sector in the Middle East region stands to gain through the establishment of local timeshare regulations, according to Steve Holmes, chairman and CEO of US-based Wyndham Worldwide, parent company of Group RCI, the world leader in timeshare exchange. Holmes’ comments were made at the Global Travel and Tourism Summit in Dubai.

He said, “We are pleased that this new timeshare law is now in place as we know that this is an essential step to establishing the timeshare industry in this new market. These protections will serve the interest of both developers and consumers alike while fostering a healthy growth environment. With this law in place, the vacation ownership industry should make a significant economic contribution to the market.”

As interest in timeshare grows, it is expected that Middle East residents will spend estimated by major players $1.2 billion a year for shared-ownership properties until 2020, with top markets including Saudi Arabia, Kuwait, Iran Egypt and the UAE.

Necessary approvals

The law requires developers or real estate companies willing to enter the market to apply for a timeshare license directly from the Real Estate Regulation Authority (RERA) with detailed plans of the project, company profile, background and pay a fee prior to marketing their developments. Upon approval, they can begin sales and marketing.

The authority requires commercial licensing of timeshare developers, sales agents, market companies and other engaged in offering timeshare in Dubai. A deposit of Dh1 million is expected as a precondition for obtaining such license.

What we say?

In Europe the trend emerged in the early 90ties.
The timeshare ownership proved it self as a vehicle that was great for lifestyle and regular usage but wholly ineffective for investment as owners faced :

• low liquidity of assets,
• high depreciation,
• restrictions on resale
• and no actual real estate ownership.

Now a days, hardly any one in the European Union knows what timeshare law means, let alone the size of investments.

Perhaps in Dubai the timeshare model will be reinvented and innovated in order to become feasible for investors.

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Dubai Property Law-2006/Law No. 7

In early 2001, the Dubai Property Market changed. The Government of Dubai allowed foreign investors and buyers to take 99-year leases on apartments and villas in Dubai. When this decree was issued in 2001, the population of Dubai was close to a million.

In May 2002, the current Ruler of Dubai, His Highness Sheikh Mohammad bin Rashid Al Maktoum ruled that the emirate would permit foreign nationals to invest in Dubai properties on freehold ownership. The properties were initially grouped under 3 government-owned entities - ‘Emaar Properties PJSC', ‘Nakheel' and ‘Dubai Holding'.

The statement just jumpstarted the market and it has been thriving ever since. Drafted as Law No. 7 in 2006, the ‘Land Registration Law of the Emirate of Dubai' legalizes freehold ownership of land and property for the UAE and GCC citizens, while awarding the same rights to non-GCC expatriates in pre-designated areas that are approved by the Ruler of Dubai.


Land Registration in the Emirate of Dubai

Dubai's Ruler His Highness Sheikh Mohammad Bin Rashid Al Maktoum having considered the Federal Law No: 5/1985 promulgating the civil transactions Law and its amendments; The Federal Law no: 11/1992 promulgating the civil procedure Law and its amendments; The Local Law No 7/1997 concerning Land Registrations Fees; and the Local Decree concerning the Formation of Land Affairs committee of the year 1960; do hereby promulgate the following Law.

Chapter One

Title and Definitions

Article (1)

This Law shall be cited as "The Land Registration Law of the Emirate of Dubai (No 7/2006)

Article (2)

In this Law, the following words and terms shall have the respective meanings assigned to each of them, unless the context requires otherwise.

The UAE: The United Arab Emirates.

The Emirate: The Emirate of Dubai

The Government: The Government of Dubai including any of its Departments, Authorities or public Corporations.

The Ruler: His Highness the Ruler of Dubai

The Department: The Department of Lands and properties

The Head: The head of Department

The Director: The Director General of the Department

Land: Anything permanently fixed nature which cannot be removed without damaging or altering its form 1.

Rights over the Land: Any principal or accessory rights over the land

Land Register: A collection of records kept by the Department in written or electronic form in an electronic register, detailing the description of the registered Land, its ocation and the rights over it.

Land Unit: Any plot of Land and all that is located thereon such as buildings, plants or otherwise, situated in one land

Area: Without being separated from its other parts by any public or private property and without any part of it having a right or an encumbrance which its other parts do not have.

Land Area: A group of land units demarcated by principal roads or fixed and clear signs with an accredited name and distinctive number in accordance with the practice of the department

Person: A natural or legal person.

Chapter Two

Scope of Application and Right of Ownership

Article No.3

This law shall apply to Land situated in the Emirate

Article No.4

The right to own Land in the Emirate shall be restricted to citizens of the UAE, citizens of cooperation council for the Arab sates of the Gulf, the companies totally owned by any of the forgoing, and public stock companies. Foreign persons may, subject to the approval of the ruler, be granted in certain areas the following rights:

a) The right to acquire absolute ownership of Land without restrictions as to time.

b) The right to acquire usufruct or leasehold of Land for a period not exceeding 99 years.

Chapter Three

General provisions

Article (5)

The originals of documents and judicial decisions in pursuance of which

Registration is made shall be kept in the Department, and shall not be moved outside its premises. Interested parties, judicial authorities or experts appointed by them, as well as competent committees may have access to such originals and obtain a certified copy thereof in accordance with provisions of this Law.

Chapter Four

Jurisdiction of the Department

Article No.6

The Department shall have exclusive jurisdiction to register the rights over Land and leaseholds mentioned in Article 4 of this Law. For this purpose, the Department may do any of the following:

Determine the areas to be surveyed or re-surveyed and certify the maps drawn therefore.
Prescribe rules in relation to surveying and inspection, as well as in relation to issuance of maps relating to Land Units;
Prepare model forms of contract relating to real estate transactions;
Prescribe rules concerning organizing, archiving an destruction of documents;
Lay down rules in relation to using computers in storing and recoding data;
Lay down rules in relation to regulating and keeping a register of real estate brokers;
Prescribe rules in relation to evaluating land
Lay down rules in relation to voluntary sales of Land by public auction and supervision of such sales;
Determine the fees payable for services rendered by the Department; and
Establish branches of the Department as the Director may deem appropriate.

Chapter Five

The Land Register

Article No.7

A Land register shall be maintained in the Department to record all rights over Land and any changes that might take place in respect of them. The register shall be conclusive evidence against all and everyone unless it I proved to be the result of fraud or forgery.

Article (8)

Subjects to the provisions of Article (7) of this Law, all electronic records shall have the same weight of evidence as that of their hard copy written originals

Chapter Six

Registration

Article (9)

All transactions that create, transfer, change or cancel rights over Land shall be recorded in the land register and final judgments confirming those transactions shall also be likewise registered. No transaction shall have any effect unless registered in the Land Register.

Article (10)

Any undertaking to transfer a right over the Land shall be limited to an obligation to pay compensation if the obligor is in breach of his undertaking, whether the undertaking contains a provision to pay compensation or not.

Article (11)

If the estate of a deceased contains Right over Land then the certificate of inheritance shall not be effective or recognized against third parties unless registered in the Land Department.

Article (12)

The department may for the purpose of settlement entertain applications for registration submitted by persons in possession of Land that is not registered in their names.

Chapter seven

Alterations or corrections of Records in the Register of Land

Article (13)
The Department may, on the application of a interested party or on its own initiative with notification to those concerned, correct clerical errors in the records of the Land Register.

Article (14)

In coordination with the relevant authorities, the Department shall update its records of Land Units and of what is located thereon such as buildings, plants or otherwise.

Chapter Eight

The Maps

Article No.15

For the purpose of registration of Land Units and Land areas, the following maps shall be relied upon:

Typographic master map;
Map of Land Unit and
Map of Land Area
Each Land area shall have its own separate map indicating the Land Units located on it and the numbers thereof.
Each Land Unit shall have its own separate map indicating its site, boundaries, width and length, area, its features, construction located on it and the numbers given for its neighboring units.

Chapter Nine

Dividing and Merging

Article (16)

If the dominant Land Unit is divided up, the right of easement shall remain in existence in favor of each part of it, provided that does not increase the burden to the servient Land Unit. However, if the right benefits only some of such parts, the owner of the servient Land Unit may apply to the Department for the termination of the right benefits only some of such parts, the owner o the servient Land Unit may apply to the Department for the termination of right in respect of other parts.

Article (17)

If the servient Land Unit is divided up, right of easement shall remaining existence over each part of it. However, if the right is not in fact used over some of such parts, and it is not possible to use it over those parts, the owner of each part thereof may apply to the Department, in accordance with the provisions of this Law, for termination of the right in respect of this part.

Article (18)

Easement rights cease to exist by the acquisition of the dominant an servient Land Units by the same owner.

Article (19)

If the Land Unit which is encumbered by an accessory right over Land is divided into two or more Land Units, then each such new Land Unit will be encumbered by the whole accessory Right over the Land. The new owners may agree with the beneficiary of the accessory right over Land for the division of it in such way so that each new Unit will be encumbered by one part of it, to be determined by mutual consent.

Article (20)

If two Land Units and one of them is encumbered by an accessory Right over Land while the other is not, then accessory Right over Land shall extend on the whole of the new Land Unit without the approval of the merger by the beneficiary of the accessory right over the Land. However, if each of the two land units is encumbered by an independent accessory right over Land, then the beneficiary of each such accessory Right over Land must approve the merger.

Article (21)

Any alteration in the Land Unit by dividing or merging shall be registered in the Land Register.

Chapter Ten

Ownership Document

Article (22)

The Department shall issue documents relating to rights over Land on the basis of the actual records of the Land Register.

Article (23)

Without prejudice to the provisions of any other Law, apartment buildings and multi-storey buildings shall be treated as a single Land unit and shall have one record in the Land Register to be supplemented by records stating the names of the owners of the apartments, storey's and common parts.

Article (24)

Ownership document mentioned in article 22 of this Law are conclusive evidence of the Rights over Land contained therein.
In the Land Unit record shall be set out any conditions, promises or restrictions concerning Rights over Land and other obligations.
Chapter Eleven

Final Provisions

Article (25)

Provisions of the Federal Civil Transactions Law No 5/1985 and its amendments shall apply to all matters not provided for by this Law.

Article (26)

Any agreement or transaction made contrary to the provisions of this Law shall be null and void, as shall also b null and void nay agreement or disposal made with the intension to contravene the provisions of this Law.
The nullity of such agreement or disposal may be invoked before the court by every person having an interest, as well as by the Department, or the public prosecution, and such nullity may also be ordered by the court on its own initiative.
Article (27)

The decree dated 6 November 1977 concerning Civil and criminal cases in respect of transactions relating to disposal of Lands in the Emirate of Dubai shall be repealed.

Article (28)

The Head of the Department shall issue all necessary regulations, decisions, orders and instructions for the implementation of the provisions of this Law.

Article (29)

This Law shall be published in the Official Gazette and come into force as of the date of its publication.
Source

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Dubai publishes long-awaited property law

Dubai on Wednesday published its long-awaited law governing the ownership of properties within developments in the emirate.

The Condominium Law clarifies the relationship between developers, landlords and tenants, setting out rules surrounding the ownership and management of developments, or what it terms "joint properties".

The law defines a joint property as either a building comprising units or defined area comprising land plots.

Under the new law, which comes into effect on April 1, every joint property must have an owners' association.

An association must be set up after first unit of a development is sold. It will be made up of all unit owners of the development and the master developer.

Under the law, all owners' associations will become legal bodies with bank accounts and contracts for a group of owners.

They will have the right to sue landlords and tenants for violating any part of the Condominium Law.

Owners' associations will be responsible for the management, operation and maintenance of all common areas of the development.

Common areas of a building include lifts, parking areas, entrances, gyms and swimming pools, while common areas of a defined area comprising land plots includes roads, paths, lakes, canals, parks, and play areas.

Common areas in both includes infrastructure such as water pipelines, drainage system, Gas pipelines and
electricity cables.

The law states that owners' associations will maintain comprehensive insurance of the joint property and will be beneficiaries of this insurance. Each unit owner will pay an insurance premium to the association.

The legislation also states that the developer will be responsible for any structural defects in the development for 10 years, and is responsible for fixing or replacing any defective fittings for one year after a unit is purchased

Under the law, Dubai Land Department will keep the registrations of joint properties and their owners, and issue ownership documents. It will also regulate sale deals and mortgages, and any other transactions regarding such properties.

New buyers of a unit within a joint development will also have full access to records, diagrams and financial statements which will be held by the owners' association.

Long-term lease contracts and related rights must also be registered with the department.

The new law is part of an overhaul of the emirate's property laws aimed bringing order to the market, which has largely been unregulated until now.

Other real estate market reforms currently being implemented include the licensing of property brokers and the escrow account law, designed to protect property buyers from unscrupulous developers. Source

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Tenants can’t be evicted without demolition permit

Landlords are not allowed to kick tenants out or disconnect water and electricity supplies to apartments without the Rent Dispute Committee’s approval for demolishing the building, Mohammad Rashid Al Hamli, Head of the committee in Abu Dhabi, said yesterday.

He said the landlords who tried to evict the tenants from the building by attempts such as shutting the water and electricity supplies would face a stiff fine.

“The landlord is not allowed to evict the tenants to demolish a building. The demolishing permits would be issued after checking the building,” said Al Hamli.

He issued these clarifications after 40 families were forced to spend their weekend in a police station and the General Prosecution after the landlord of a 10-storey building here stopped the lifts for two weeks and shut the water supply for two nights.

The prosecution sent a report to the police station on Friday, after which the water supply was restored and lifts began functioning again.

Some of the tenants of the ‘Fares’ building located on Airport Road went to Al Shabia police station. They were shifted to Al Khalidya.

A Jordanian woman, one of the tenants, said, “I live in a 10th-floor flat. We have suffered from the landlord as he tried to kick us out of the building by stopping the lifts for two weeks. Finally, the landlord snapped the water supply for more than 20 hours.”

Alaa Abdul Sattar, an Egyptian tenant, said, “I don’t know how the landlord who wants to demolish the building allowed me to renew the contract for another six months.”

Nabih Hazaa, a Lebanese engineer, claimed that the landlord was trying evict them to increase the rents. “The landlord had sent us notices demanding an increase in the rent of the three-bedroom flat from Dh 40,000 to Dh 50,000 and for the two-bedroom flats from Dh 30,000 to Dh 40,000,” he said.

Viren Wahi, an Indian tenant, said, “There are some pregnant women in the building. I live on the eighth floor and I had suffered because I am a heart patient. I couldn’t take the stairs to go up and down everyday.”

Abdul Aziz Safwan, the landlord, told Khaleej Times that the water supply snapped and the lifts stopped functioning because there was no maintenance contract for the “too-old” building.

“We had built the structure in 1977. It means that the building is more than 30 years old. According to the law, we can demolish it. Moreover, the state of the building state is too bad and it is really dangerous to let the people live in it,” said the landlord.

He added, “The tenancy contracts of all occupants had expired in November, 2007 and I have given them a six-month grace period to vacate the building.”

The owner said he would not give anymore grace period to the tenants and they should leave the flats. He would not have any responsibility if the building collapsed, he added. Source

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Dubai to have Rental Index next month

Dubai's pledge to protect property buyers and tenants will be translated into concrete terms next month when its property watchdog - Real Estate Regulatory Authority (Rera) - will introduce a Rental Index on February 14 along with other property laws.

New property transaction forms will be introduced to streamline each transaction. Three forms will be introduced for brokers and agents; buyers and sellers agreement and for the secondary property market (resale).

It includes a new rental law for the protection of properties, which will enhance protection on the interests of every individual and corporation, said Rera CEO Marwan Bin Ghalaita while highlighting the achievements of property watchdog on Monday. The event was organised by Dubai Property Group.

Rera is setting up a database that will provide details and history of every property and 1,800 agents in the Dubai, according to The Gulf Today.

Ghalaita said it will be mandatory for all agents to be identified with a Rera card and 2008 is likely to be the end of freelance agents' activity. He said transaction fees will be given only to the government (Rera), and no one else can accept such fees.

He advices all land deeds to be registered in person with the Land Department, which is easy, smooth and safe. Answering a question on the sale of a building which has already been 10 per cent sold, he said it is illegal to sell the full building, when it is already 10 per cent sold.

Rental Index will give landlords and tenants an indication of the actual market price and also curtail inflated rents. Dubai plans to introduce a new property index soon that will help in setting a range of appropriate rents for properties in the emirate to control sky-rocketing rentals.

With the introduction of the property index, the landlords are obliged to set rents within the set limits.

It will also provide a guide to the tenants and house-hunters about the prevailing rentals and whether they are being overcharged or not. They can report their complaints at the rental dispute committee. Dubai has also issued an annual rent cap of 5 per cent for 2008 that is lesser than 7 per cent ceiling of 2007 and 5 per cent of 2006. (WAM)

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No transfer fee on resale of property

Buyers in the secondary property market do not have to pay a transfer fee to developers, a senior official has confirmed.
They only need to have their sales title registered with Dubai’s Lands Department, he said, in an effort to remove confusion over transfer procedures.

Some developers have wrongly been charging a fee to transfer a property from the current owner to a new one. Typically this charge was one to three per cent of the original developer’s price.

“There is no need to pay any transfer fee to master developers or sub-developers for secondary sales,” said Mohammed Sultan Thani, the department’s director of development and marketing administration. “All the parties need to do is come and register their sales titles with us. There is still ignorance among people – they think it takes a long time to complete all the formalities.

“All they have to bring is a no-objection certificate from the developer, which costs Dh500. They then pay a one per cent transfer fee to the department.”

Registration of properties provided by the government or purchased through the private housing programme are exempt from the fees.

In a separate development, Dubai’s Real Estate Regulatory Agency (Rera) has awarded the first registration licence to Strategic Marketing and Exhibitions, organisers of the International Property Show 2008. The event is due to be held from February 17 to 19.

The certificate will ensure transactions within the property show will be conducted according to rules set by the agency. “All real estate events at which properties are sold will have to obtain permission from us this year,” said Rera CEO Marwan bin Ghallaita.

“Our aim is to implement a sustained effort to organise, improve and develop the emirate’s property market. As a first step we advise all investors to avoid signing agreements with any developer, broker, or property insurance firms until they see proof that the company is registered with Rera.”

Developers will submit standard agreement forms. They must disclose buyer information, the details and cost of the property being purchased, the mortgage plan and updates on changes of ownership. These details will be held on a secure database and will be used to regulate the market. Source

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RERA licences first exhibition company

Strategic Marketing and Exhibitions, organisers of the International Property Show 2008, is the first property exhibition company to receive a registration licence from the Real Estate Regulatory Agency (RERA).

The certificate confirms the registration of the International Property Show 2008 within the jurisdiction of RERA, which will ensure that transactions within the event will be conducted in accordance with all the rules and regulations set by the agency. All participating developers will have been fully vetted and meet all the conditions of participation, including meeting RERA's standards.

Two hundred developers will be participating in this year's event, 60 per cent of which are local companies and 40 per cent international said managing director of Strategic Marketing and Exhibitions, Dawood Al Shezawi. There will be participants from all over the globe including China, Malaysia, Britain, the US, Russia and Turkey, he said.

Following on from the promulgation of Law No. 8 last year, developers are obliged to complete standard agreement forms, which will disclose accurate data such as buyer's information, the details and amount of the property being purchased, the mortgage plan and updates on change of ownership. This information will then be used by RERA to regulate the buying and selling of real estate in the emirate, and will be safely registered in a secure database. Law No. 8 also seeks to regulate commercial advertisements for unregistered properties and projects.

RERA's CEO Marwan bin Ghalita said: Our aim is to implement a sustained effort to organize, improve and develop the emirate's property market. As a first step, we highly advice all investors not to communicate or sign agreements with any developer, broker, or property insurance firms until they are presented with a proof that the company is registered with RERA."

International Property Show 2008 will run from 17 to 19 February in Dubai. Source

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RERA issues first list of registered developers

Dubai's Real Estate Regulatory Authority (RERA) has issued the first list of licensed developers in accordance to Law 8 on regulating Escrow accounts in the property development in the emirate of Dubai.
RERA warned those who intend to buy or invest in properties from dealing with unlicensed real estate companies.

Some firms were exempt from the Escrow accounts requirement by granting them special permissions.
Marwan bin Ghilaita, Director of RERA, said that the list contains over 400 licensed developers. He urged buyers not to deal with any unregistered firm. (WAM)

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Mixed reaction to new Dubai rent cap

The city’s tenants have said rent caps mean little unless salaries are increased while landlords and real estate companies yesterday called for the introduction of the 5 per cent rent cap to be enforced across the board.

The comments came yesterday after an announcement by the Dubai Land Department, the Real Estate Regulatory Authority (RERA) and Dubai Municipality’s rent committee to enforce a decree by His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. Decree No.27 for 2007 states that “rent will be capped by 5 per cent in 2008 and current for two years.” Landlord Mohammed Jafar said he was happy to abide by the rent cap as he believed rent was already high.
“I believe there should not be an increase in rent because it’s a burden that’s getting heavier day by day,” he said. “Five per cent is quite reasonable. It should be optional because of the different scenarios — not everyone can afford not to increase and the value of properties in different areas is different.”

Tenant J.J. said although the rent cap would be helpful, more needed to be done to increase salaries in line with the rising cost of living.
“The rent cap is irrelevant because whatever they do to allow a rent increase has to be coupled with a related increase in salary,” he said. “It doesn’t matter as salaries don’t increase. Nobody can afford the Dubai dream.”

The rent cap will become effective from 2008 while new regulations to stabilise rents were being considered for 2009, according to Land Department Director-General Sultan Butti bin Mejren.
“The Land Department is already looking at new regulations to stable the rents. There are several schemes and studies to find solutions for high rents in 2009,” bin Mejren said.
RERA Chief Executive Marwan Bin Ghalita said, “The decree emphasised that rent contract signed in 2007 to 2008 are not to be increased. Which practically means that no rent increase is allowed before two years passing on any contract.”
Shaikh Mohammad had ordered a 15 per cent rent cap in 2006, after which he decreased the cap in 2007 to 7 per cent.

Dubai Rents Committee Secretary-General Mohammed Ahmad Al Shaikh yesterday clarified that a contract with a rent increase in 2007 was current for two years and could not be increased again until 2009, and then only within the rent cap.
Bin Ghalita said landlords whose rents are lower than the market value could protest through the rent committee.

Landlord Suhail Iqbal said regardless of what the rent cap stood at it still meant an increase in rent when costs were already high.
He, however, said he could understand the need for landlords to increase as related real estate costs - such as advertising had also increased dramatically.
“There has to be a commitment that a two-bedroom house for example - should be between this price range, rather than a rent cap,” Iqbal said. Tenant Renjit Appukuttan said he was more concerned about the rising cost of other living expenses.
“For me there hasn’t been an increase for two years,” he said. “The rent cap is very important but what about how expensive other living costs are.”

Nagesh Rajan, another tenant quipped that the Rent Committee had to ensure that the landlord keep up with the regulations. “Though the new rent cap is welcome, the Rent Committee must ensure that the landlords don’t act in an errant manner. There have been many cases in which the landlords increased the rent much above the rent cap. They are not concerned about the law. The committee should carry out surprise inspections in the different buildings and make them act according to the law.”

The chief executive of RERA also said a new electronic registry system for new and old rent contracts and for all types of properties will be operational from the New Year’s day. This will assist in finding a rent data base which will make the whole procedure more efficient and transparent. Bin Galita expressed confidence that all real estate companies will abide by the new regulations. Source

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Dubai reduces rental cap to 5% in 2008

Dubai will maintain a cap on rental increases to curb inflation in 2008 but will reduce it to five per cent from seven per cent, the Dubai Land Department said.
The new rate comes into effect on January 1 amid concerns that demand for property continues to outstrip supply, driving up rents in the booming Gulf trade and tourism hub.

Local media gave no reason for the reduced cap, but economists say soaring rents threaten to undermine Dubai's strategy of attracting investment and expatriates, as companies begin to consider less costly cities in the Gulf.

EFG-Hermes, Egypt's largest investment bank, predicted in a recent research report that residential property prices would begin to fall in 2009, a year later than initially expected because of a delay in the delivery of construction projects.

The delays will result in a continuing shortage of residential units and prices could rise 10-15 per cent this year and five-10 per cent in 2008, peaking in the second half, EFG-Hermes said. The report, released in September, had predicted the rent cap was likely to be reduced to five per cent for next year.

Abu Dhabi, the largest of the United Arab Emirates' seven members, Sharjah, home to many expatriates who work in Dubai, and smaller emirates have also set rent caps in recent years.
Dubai was the first UAE emirate to open its real estate market to foreign investment in 2002, triggering a boom that has driven both property prices and rents higher.

The Dubai government set a rent rise cap of seven percent for 2007 to help tackle inflation, which hit a 19-year high of 9.3 per cent in 2006.

The UAE Central Bank says rising rents are the primary driver of inflation in country, whose population is growing fast.

Dubai's population, which is more than 85 per cent comprised of foreigners, is growing at an average 7.9 per cent a year and may rise to 1.9 million by 2010 from 1.4 million now, EFG-Hermes said. (Reuters)

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DLD grants Escrow account accreditation to NIB

Noor Islamic Bank, a subsidiary of Noor Investment Group, today announced it has signed an agreement with the Dubai Land Department, accrediting it as an approved bank to offer escrow account services for property developers in Dubai.

The agreement, signed between Sultan Butti Bin Majrin, Director General of Dubai Land Department, and Hussain Al Qemzi, Group CEO, Noor Islamic Bank, is in compliance with the newly established Law Number 8 of 2007 concerning Guarantee Accounts of Real Estate Developers in Dubai.

Issued by His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, and Ruler of Dubai, the law mandates property developers to deposit all project sales proceeds in escrow accounts until the completion of the individual projects.

"The accreditation is a significant step for Noor Islamic Bank, ahead of the official launch of our operations in January 2008. As a contemporary Islamic bank, we are committed to meeting the needs of our customers by offering high quality services, in line with market regulations," Hussain Al Qemzi said.

"The escrow account regulation aims to protect buyers' interests and is playing a vital role in reinforcing public confidence in Dubai's freehold property market. Founded on strong principles of trust and confidence, it is only natural for Noor Islamic Bank to service escrow accounts," he added.

An escrow account essentially is a safekeeping account for buyers of off-plan units from developers and making instalment payments during the course of construction of the project until completion and delivery of the unit to the buyer. Developers will need to open separate escrow accounts for each project.

All proceeds into the escrow account will be protected for the buyer as payments will be released by Noor as an escrow agent upon fulfilment of specific conditions by the developer and as specified by Dubai Land Department. Noor Islamic Bank's escrow account services will be fully Shariah-compliant and will cover range of value added services to the property developers at competitive rates.

The UAE property market opened up to expatriate ownership in 2002. Since then more than 15,000 families have moved into freehold homes.

When operational, Noor Islamic Bank will be a full service Shariah-compliant bank, with an emphasis on quality and personalised service. It will offer total relationship management, providing customised solutions for retail and corporate customers, as well as small and medium enterprises.

Noor Islamic Bank has started accepting applications from property developers for its escrow account services. (WAM)

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Dubai vows escrow account crackdown

The Dubai Land Department says it will take action against real estate companies which fail to register for the mandatory escrow account by the December deadline.
Mohammed Sultan Thani, director of development and marketing administration at DLD told Emirates Today “we do have enough regulatory power and even the government consent to take action against companies failing to meet the escrow account deadline”.
Under article 14 of the new law, companies which continue to operate without a licence, knowingly sell units in bogus property developments or embezzle, or squander construction payments will face incarceration and/or fines of Dh 200,000 ($54.5k).
Thani refused to comment on the number of companies already registered under the recent law, Emirates Today reported. “We are not able to release the actual number of companies that have registered with us for escrow account, as the process is still continuing” he told the newspaper.
According to Thani few complaints had been received from investors regarding project delays or misappropriation of funds. A second official told ET buyers or investors should read agreements properly before signing, as “we can’t protect them if they have entered into any agreement that protects developers for any delays”. Source

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New resolution on green building specifications by Dubai Ruler

A new resolution on the implementation of green building specifications and standards in the emirate of Dubai has been issued Wednesday by H.H. Sheikh Mohammed bin Rashid Al Maktoum Vice-President and Prime Minister of UAE and Ruler of Dubai.
As per the new resolution, effective January 2008, all owners of residential and commercial buildings and properties in the emirate of Dubai must comply with the internationally recognized environment-friendly specifications to turn Dubai into a healthy city that meets the demands of best practices and benchmarks of pollution-free sustainable development.

The said resolution will boost Dubai's continuous efforts to promote global endeavors to face environmental challenges, Chairman of The Executive Office Mohammed Abdullah Al Gergawi said citing efforts by Dubai to bring climate change and global warming under control.
"Through implementing this resolution, Dubai becomes the first city in the Middle East to adopt green building specifications", added Al Gergawi who is also the UAE Federal Minister of State for Cabinet Affairs.
"The resolution falls in line with Sheikh Mohammed's keen interest in dealing with the current environmental challenges.... The move is also part of The Dubai Strategic Plan 2015 announced earlier by Sheikh Mohammed bin Rashid Meanwhile, Al Gergawi inaugurated Wednesday a new building of Pacific Controls Systems LLC, which becomes the 16th building in the world to comply with green building specifications and standards.
"The inauguration of this building in Dubai has is significant and is in line with the relevant instructions by Sheikh Mohammed bin Rashid." For his part, Secretary General of the Dubai Executive Council Ahmed bin Bayat said "the adoption of the green building specifications will contribute to the reduction of operational cost of buildings through reducing electricity and water bills and ensuring a model healthy environment". Source

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Media by-law on real estate marketing to be issued soon

A media by-law, which will govern how real estate developers market and advertise their developments, will be issued in about two weeks, the CEO of the Real Estate Regulatory Agency (RERA), Marwan Bin Ghalita said yesterday. He was speaking at the launch of RERA's new logo.
"It is a short and straightforward by-law," Bin Ghalita said, and will guarantee that buyers purchase property from reputable developers. Under the by-law a developer advertising a property must display its RERA registration number, which shows it is an approved developer, as well as the bank at which it holds an approved escrow account and the name of the registered real estate broker.
The introduction of the by-law follows the enactment of Law No 8 of 2007 in July concerning guarantee (or escrow) accounts. The law means that all developers must open an escrow account with a certified financial institution.

So far 13 banks have been certified by RERA to manage a guarantee account. Property developers, of which Bin Ghalita estimates there are about 600 in Dubai, who have started selling off-plan developments must have a guarantee account in place by December 28. But before selling can commence on any new development, a developer must already have a guarantee account, he explained. It is also likely that guarantee accounts for brokers who hold customer deposits will become mandatory in the near future.
To date there are 135 developers, 661 real estate agents or brokers and 1,220 licensed (individual) agents registered with RERA, he said, adding that only developers complying with the law will have the logo on their (Cityscape) stand. "About 60 to 70 per cent of developers will have the logo. The others didn't act quickly enough," said Bin Ghalita.
To be eligible to use the logo the developer must be registered with RERA, have a letter stating that it can open a guarantee account with one of the 13 banks, and that a registered broker is marketing the development.
The logo, designed by Moosa Al Halyan, emphasises the importance of Dubai Creek in the context of real estate development, explained Bin Ghalita. The shape of the blue line captures the letter "D" in Arabic and English for Dubai and the three blocks signify property owners, investors and brokers, as well as developments themselves, he said. Source

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Directive reflects Mohammed Keenness to provide media best working conditions

The decision to eliminate the jail sentence in press cases comes as a great relief for journalists and a boost to press freedom, wrote a UAE daily.
"A longtime demand of journalists, the decision comes two days after two journalists were sentenced to two months in jail after being accused of slandering a woman involved in a domestic dispute," said the Dubai-based 'Gulf News' in its editorial today.
The English language daily went on saying that the decision was taken by His Highness Sheikh Mohammad bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, who said there were other measures that may be taken against journalists who violate the law.

"According to Sheikh Abdullah bin Zayed Al Nahyan, Foreign Minister and Chairman of the National Media Council (NMC), the government has been instructed to speed up the necessary steps to issue the new press law in light of the amendments made by the NMC after consulting the concerned bodies," noted the paper.
"The move "reflects Sheikh Mohammad's belief in freedom of the press and its important role in society," and underlines his support for journalists, the minister said. It also reflects the Vice President's "keenness to provide the best work environment for the media to carry out its duties in the best way," the daily added.
The daily pointed out that the UAE, a rapidly growing modern state the core of which is good governance, needs a free press to reflect the constant changes in society and provide an essential monitoring tool to sustain transparency and accountability in the development process.
The paper concluded by saying that the government should be commended for siding with the freedom of the press. Sheikh Mohammad's decision sends a strong message to everybody concerned that the press is truly the fourth estate. Those who put the national interests first should not fear the free press. They should indeed help us help them strive for a progressive UAE where the law is supreme. Source

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Dubai World Central signs landmark agreement with Dubai land Department

Dubai World Central (DWC) - the upcoming massive 140 square kilometre city-within-a-city in Jebel Ali, has signed a Memorandum of Understanding (MoU) with the Dubai Governments Land Department to provide land estimation, acquisitions and sales, as well as legal and electronic linking services to DWC staff, developers and investors.
Key investors across DWC free zones centred around the Dubai World Central International Airport (JXB) - Dubai Logistics City and DWC Aviation City, as well real estate components like DWC Residential City, DWC Commercial City and DWC Golf City will gather learnings from the Land Departments 47 year old history.

The Dubai World Central project has received tremendous support from the Dubai Government ever since its launch, which in turn has helped us continue the development in line with the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, said Khalid bin Harib, CEO, Real Estate, Dubai World Central.
This MoU will allow DWC and the Land Department to formulate a proper training programme that will especially enable DWCs real estate staff to understand the processes, mechanisms and systems of land sales and management.
Besides it will also provide an insight into the preparation of necessary paperwork through e-training, procedures for land sales, acquisition and registration, in addition to mortgage on property, land and structures through electronic linking. All of this will be done in a timely and efficient manner, assisting the projects growth at a stable pace and the beginning of operations as planned by end-2008. The electronic link between Dubai World Central and the Dubai Governments Land Department will allow instant completion of procedures relating to land registration and facilitate legal proceedings relating to assessors and contractors.
Currently, grading work is underway on DWC Residential Citys phase one and construction is expected to commence by January 2008.
DWC provides for mid-income housing at DWC Residential City while DWC Commercial City will have a mixed-use development. DWC Golf City is being designed for premium living with all DWC residents having access to the best amenities being developed by Dubai World Central. Source

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