- Broker Directory
- My Tools
- News & Advice
- Market Trends
- Other GN Sites
A level playing field is what has been achieved with Dubai Land Department's requirement that all freehold property transactions in the emirate from May 1 should come with an unified set of contracts involving the buyer, seller and the agent. These will now form the basis for any property deal to be validated by the Dubai Land Department.
There are three models of contract: one which is between the seller and buyer, the second between seller and broker and the third which is between the buyer and broker. These are available on the Land Department's EMART portal.
In one stroke, this removes some of the ambiguities or interpretations that used to be there earlier in the way contracts were being drawn up and signed. ''Any move from the authorities that helps remove ambiguity in the marketplace is welcome,'' said Ranjeet Chavan, partner at SPF Realty. ''Earlier it was quite likely individually drawn contracts could lead to different interpretations — deposits could be held or might end up being cashed. That's now gone — there is a defined role for each party involved in the transaction.''
So, what does the new set of unified contracts entail? ''One such contract requires the details of the buyer, seller, sales price and completion date,'' said Shahram Safai, partner for the real estate practice at the law firm Afridi & Angell. ''The 'unified real estate contracts' may be used as a cover page for a [individual property] contract but must be augmented by the special legal provisions that each transaction requires.
''Developers should also combine the 'unified real estate contracts' with their sales terms and conditions to be compliant.''
The contracts, however, do not contain other legal terms and conditions such as representations, warranty, termination or dispute resolution provisions to effect a sale.
''The new rule will have more of a direct bearing in secondary market transactions; while unified contracts had been there for the better part of two or more years, it's only now that they have been upgraded to a mandatory requirement,'' said Niraj Masand, partner at the property services firm Banke M.E. ''Earlier, different versions of a MoU (memorandum of understanding) were being drawn up and there was no consistency to these. That's been rectified now. The agent's role in transactions have also got clarified in the new regime.''
Industry sources believe it could also form the basis for adding further provisos, if need be, at a later date. ''If there are grey areas, there's nothing stopping the authorities from removing them,'' said Chavan.
Source: Manoj Nair, Associate Editor, gulfnews.com