Cutting out the broker from handling payments

Of all the new regulations related to marketing property in Dubai, one particular detail stands out — no estate agent can collect funds directly from the property owner if a deal goes through.

The Rera (Real Estate Regulatory Agency) requirement is quite clear on this point: “A letter must be produced by brokers outlining that they 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.”

For property buyers in Dubai, especially those buying overseas, who takes their cash is of absolute importance. There have been multiple instances where “brokers” have collected the down payments and the developer never gets to see any of it. Or the particular project fails to make on from the launch stage — in that situation, the property buyer’s funds will have gone down the drain.

According to one Dubai based resident who recently bought a property in India, “We would find brokers flying in and attend exhibitions saying they represent this or that developer. Many collect payments saying that a particular property will be available at a discounted price only during this course of the exhibition. But even with emails and the like, there’s absolutely no guarantee on what the project’s status is, especially overseas based ones.”

These are the doubts that the latest Rera regulations will try and clear. The onus is on the developer alone when it comes to collecting any funds from buyers.

The Dubai Land Department is also in the process of activating escrow accounts for brokers marketing properties from outside the UAE. “It would definitely protect investors and regulate the market by preventing any unforeseen irregularities,” said Glenn Netto of BPG Maxus.

The laws are in place, now it is time for investors based in Dubai to follow all safeguards at the time of their next purchase of an overseas property. And, follow that one golden rule of investing — if a deal sounds too good to be true, it probably is.

 

 

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

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