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Overseas developers keen to connect with potential buyers in Dubai had better follow the rules — otherwise a stiff fine will all that they be getting for their efforts. In a major push to safeguard buyer interests, an escrow scheme will also be put in place for overseas off-plan properties sold here.
The Real Estate Regulatory Agency (Rera) has mandated that all overseas projects marketed here have to get prior clearance before they can do the rounds. And that it will now be strictly enforcing all rules related to this aspect as well as bring in updates to existing “Real estate companies are not permitted to market any projects from outside the country without official permission … with any authorisation granted coming with strict conditions attached,” said Ali Abdullah Al Ali, Rera’s Head of the Real Estate Licensing Department.
“We are in the process of enabling applications for the escrow account scheme for real estate marketed from outside the UAE. The Inspection and Control section works to control real estate ads and ensure advertisers obtain all required permits.”
One would have thought that buyers by now would have gained enough savvy not to fall for fraudulent real estate schemes or where they are promised much more than what they actually get on handover. But, unfortunately, such instances are still rife, and especially those related to how payments are made.
This is what Rera is cracking down upon, especially the practice where the broker collects the payments on behalf of the project owner. Under Rera rules, all payments need to be made directly to the developer.
According to the Rera official, the onus lies with investors to protect their interests. “Verify all documents and (do) not hesitate to ask any questions about the data or information from the broker or the property,” said Al Ali. “Now, customers can verify all the information through the Dubai Brokers smart application.
“Furthermore, when any payment is due for the property, it must be paid directly to the property’s owner. Following the signing of the contract between the parties, the real estate office will be entitled to receive their fees.”
The stringent moves on how properties are marketed and sold in Dubai are also being applied to broker practices. That means: stop making cold calls or sending out emails talking up the prospects of their portfolios.
“The Dubai Land Department received more than 130 complaints so far this year about brokers,” said Al Ali. “These mostly extend to brokers harassing customers with telephone calls, e-mails and text messages; lack of commitment to perform the tasks entrusted to them and negligence in their implementation; and finally not returning property booking fees.”
All of last year, the number of complaints handled by the Land Department totalled 441. So far this year, eight fines were handed out to firms for using brokers unregistered with Rera or for lax practices. These fines have touched Dh50,000 on the higher side. (Dubai now has 3,250 brokerages and 5,900 brokers registered with Rera.) The government entity has already launched a classification project for brokers’ offices. “We are working on the second phase of this project that will include a star rating for brokers based on specific criteria, as well as an ongoing self-inspection project which trains someone from the office on all procedures, conditions, and irregularities, who will report to DLD on the company’s behalf,” said Al Ali.
“This person will check and self-censor in the office to eliminate the poor business practices of some brokers.”
Tick these boxes before selling overseas property in Dubai
1. Copy of the property’s title deed.
2. The letter from the country in question describing the method of foreign ownership of properties.
3. A marketing agreement between the property owner and brokerage firm.
4. A letter from the broker indicating the type of property.
5. Undertaking from the brokers that they will not receive any money on the owner’s behalf.
6. Undertaking from the brokers that they hold the full legal liability for the authenticity of information provided.
7. Documents issued outside of the UAE must be attested by a UAE embassy and the Ministry of Foreign Affairs, and translated into Arabic by a legal translator.
8. Permit approval fee of Dh1,010.
9. For brokerage firms, the registration number of the firm and broker must be mentioned.
10. In a case of a corporate advertisement which relates to the company’s brand or services, rather than a specific development, documentation relating to projects and properties is not required.
11. The Dubai Economic Department should be visited for final approval on the permit.
Source: Manoj Nair, Associate Editor, gulfnews.com