New property ad regulations will force a rethink

The Department of Economic Development building, which also houses the Dubai Land Department and the Real EstateRegulatory Agency (RERA). Picture for illustrstive purpose only / Image Credit: Gulf News ArchivesThe Department of Economic Development building, which also houses the Dubai Land Department and the Real EstateRegulatory Agency (RERA). Picture for illustrstive purpose only / Image Credit: Gulf News Archives

Property related advertising — especially those marketing overseas properties — is in for a period of readjustment brought on by Dubai’s strict new licensing requirements on all such ads. For media buying houses and the many media platforms this could mean a further loss of income from property-driven ad campaigns, at least in the short term.

If so, this would come on top of a steep 40 per cent decline in real estate related ads that local media outlets saw in the year to August, according to BPG Maxus-Recma estimates. In fact, the loss of revenue generated from real estate ads has much to do with the media industry going through its toughest period since 2009-10.

This had more to do with the decline in new project launches and related marketing activity in Dubai during the January to August period. But ads related to overseas property campaigns had been having one of its better years to date, as UK and Indian developers in particular went into overdrive trying to convince buyers here that they ought to be spending their spare funds on overseas realty investments.

But these days, it is just as likely for consumers of Dubai/UAE media platforms to come across ads extolling the virtues of investing in Croatia, Turkey or some of the Far East destinations.

The new regulations, issued by Rera (Real Estate Regulatory Agency), requires developers — including overseas ones — to go in for licensing permits before they can place any ad showcasing their properties in Dubai. Apart from print, this would equally apply to all online ad placements on such properties.

“It’s quite similar to the pre-approval required on all sales promotions that Dubai’s brick-and-mortar retailers have to go in for,” said Glenn Netto, Director — Buying at BPG Maxus. “It added to the paper work required for clearances, but in no time the retail sector was able to adjust to it.

“Much the same will happen now with the new laws on real estate ads in Dubai … it’s only a question of meeting one additional requirement.

“We do not see it as a serious challenge as we are confident that developers/brokers can source the required documents for the necessary approvals from RERA and have the planned launches as per schedule.”

Industry sources say that the permits will be based on a per-project basis and not on each campaign a developer may have related to a particular project. Also, the licensing requirements do not apply to PR activity generated to support a particular project launch or sales.

But some industry stakeholders believe the same results — of tighter protection for property buyers’ rights — could have been achieved with a lighter touch.

“It is welcome news that Rera is taking care of the players in the market by making sure all advertisements are to a professional standard,” said David Godchaux, CEO at the consultancy Core Savills. “However, there is a danger that this will add another level of bureaucracy to what is already there … when it may be more beneficial to work within the current parameters and employ a stricter policy of enforcement.”

What will worry developers is the penalty for non-compliance — a steep Dh50,000 for a first-time offence.

According to a source at an estate agent, the paperwork requirements will add to the time factor. Earlier, a decision could be taken about a particular placement and the ad placed almost immediately on a digital site and in less than 24 hours in a daily.

Now, with the Rera requirements, the planning has to be brought forward. And developers and their marketing agencies will have to ensure that no online they might place crops up on the mobiles and PCs of consumers in Dubai — before they get the permit from Rera.

“At least initially, agencies will have to double check all online property ad placements ... they ill need to review all standing instructions and go in for a fresh start,” the source added.

What developers and marketers must comply with

According to the new Rera guidelines, for any property ad to be placed in any media with an exposure in Dubai, they must first:

Obtain a permit through the “Trakheesi” system on the Dubai Land Department website;

Submit a copy of the title deed, and for overseas real estate, a letter from the country in question describing the method of foreign ownership of properties, a marketing agreement between the property’s owner and brokerage firm and a letter from the broker indicating the type of property.

Produce a letter that brokers will not receive any money on the owner’s behalf. This must come with an additional letter stating that the broker holds the full legal liability for the authenticity of information provided.

Ensure documents issued outside of the UAE are attested at a UAE embassy and the Ministry of Foreign Affairs, and translated into Arabic by a legal translator. For brokerages, the registration number of the firm and broker should be mentioned and a permit approval fee of Dh1,010 paid.

What developers and marketers must comply with

According to the new set of guidelines from Rera, for any property ad to be placed in any media with an exposure in Dubai, they must first:

Obtain a permit through the “Trakheesi” system on the Dubai Land Department website;

Submit a copy of the title deed, and for overseas real estate a letter from the country in question describing the method of foreign ownership of properties, a marketing agreement between the property’s owner and brokerage firm and a letter from the broker indicating the type of property.

Produce a letter that brokers will not receive any money on the owner’s behalf. This must come with an additional letter stating that the broker holds the full legal liability for the authenticity of information provided.

Ensure documents issued outside of the UAE are attested at a UAE embassy and the Ministry of Foreign Affairs, and translated into Arabic by a legal translator. For brokerages, the registration number of the firm and broker should be mentioned and a permit approval fee of Dh1,010 paid.

 

 

 

Source: Manoj Nair, Associate Editor, gulfnews.com GN

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