Property regulator introduces card system

source The National

The Dubai property regulator has started issuing identity cards to brokers as part of its clean-up of the sector.

The system will see agents that are registered with the Real Estate Regulatory Agency (RERA) given one of four types of colour-coded cards, which will allow them to sell a particular type of property in a specified area.

It is part of a plan to improve the property industry’s regulation by giving RERA greater control and reinforcing investor confidence in a sector hurt by falling prices, fraud and contractual disputes.

“This initiative is the next major landmark in the process of safeguarding property buyers, owners and investors’ interests by consolidating the rigour, accountability and transparency that is so crucial to the market,” said Yousef al Hashemi, the director of licensing at RERA.

Agents carrying a blue card will be allowed to conduct all types of property sales activities and operate throughout Dubai. These agents can also operate within free zones if permitted to do so by the relevant authority.

A yellow card will be given to those licensed by a free zone authority to only conduct sales within freehold areas owned by the authority.

Holders of green cards will only be able to sell property on behalf of specific developers, while red cards will be issued to brokers of timeshare properties.

“Previously, RERA had recommended that only brokers registered with the authority should be used and had taken steps to ensure they were properly qualified to carry out their duties professionally,” said Mr al Hashemi.

“Today, we have moved to the next stage. Now, only brokers with the appropriate licences will be able to act as agents in buying and selling specific types of property. This is a huge step in the right direction.”

Duane Keighran, the managing associate and deputy head of property at the law firm Simmons and Simmons, said while the move was good at the regulation level he doubted whether prospective buyers would ask to see an identity card, allowing for the possibility of unauthorised agents slipping through the net.

“I’m not sure many people actually undertaking a transaction will actually ask to see the card,” Mr Keighran said.

RERA has been swift to react to the effects of the economic downturn. At the start of the year, it introduced a regulation banning freelance brokers from operating in the emirate.

Disputes over long-delayed projects have been exacerbated by the downturn, leaving hundreds of investors struggling to cancel contracts and receive refunds on instalments already paid.

To try to stem a rush of cancellations by buyers, RERA issued an interpretation of an existing law that introduced a sliding scale of refunds for buyers who defaulted on their purchase plans for property in off-plan developments.

The authority also moved to freeze the escrow accounts of some property developers as it awaited assurances that construction would progress and that all homes sold were registered with the Dubai Land Department.

RERA is also closely monitoring the progress of construction across hundreds of Dubai projects. In preliminary data released last week, it said almost three quarters of property developments in Dubai had made progress, despite the slowdown.

Of 552 projects, more than 72 per cent showed some construction progress, while 17 per cent were “stalled” and 11 per cent were “delayed”.

CEO sees future in real estate online

source Arabian Business

UAE real estate website propertyfinder.ae announced that its Dubai-based CEO has bought out the portal’s former Australian owners REA Group.

Michael Lahyani acquired the 51 percent stake in the property portal, the firm said in a statement released early to Arabian Business on Tuesday.

“Since the launch of propertyfinder.ae in November 2007, the portal has grown exponentially and benefited greatly from the international expertise of the REA Group,” Lahyani said.

Related: Rents in Northern Emirates seen falling after 20% H1 drop

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“The decision to buy back the remaining 51 percent of propertyfinder.ae was based on long-term growth and investment potential,” he said.

He told Arabian Business that REA Group had chosen to focus on their market at home in Australia.

Under the terms of the sale the website will retain its branding and website address.

The site, available in English and Arabic, receives 100,000 unique users and more than one million page views a month, according to the firm’s figures.

“Now more than ever before, real estate agents in the region are looking for cost effective marketing solutions such as online advertising to reach end users,” Lahyani added.

'Good development', say agents

source is Gulf News

Dubai: Real estate agents have welcomed the new rule that limits annual increases in rent in Dubai to seven per cent.

The agents said the regulation would be welcome news for tenants who have faced heavy increases in rent in recent years.

Prince Chanai, legal consultant for Al Masah International Real Estate, said the ruling was "a good development".

"This is good as the rate of increase [at the moment] is not commensurate with the salaries of people in Dubai," he said.

"I don't think it would be much of a problem to enforce. If it's the policy of the government, it's enforceable through the Dubai Rent Committee."

"If rents are going to be increased by more than this, then people have the right to object and the rule of law should prevail and in the court all issues can be adequately addressed," he said.

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Ryan Mahoney, managing director of Better Homes, a Dubai-based real estate company, said the rent cap would be good for Dubai.

"Dubai needs this kind of short-term surgical approach to the rental control problem," he said. "Any more than the rents are now is too much."

"People can't afford to accommodate themselves, and businesses can't afford to accommodate themselves," he said.

Mahoney said the current high rents risked dampening businesses in Dubai as companies would look to move elsewhere, and that the decree was probably aimed at protecting the business environment.

"If the government takes steps to protect this city as a viable commercial hub, it would protect the real estate market," he said.

Mahoney said the government does need to be careful that rent caps are only applied as a short term-solution. He said long-term implementation of a rent cap could provide as a disincentive to developing more properties.

Mahoney has little sympathy for landlords.

"This is only going to affect existing landlords," he said. "The good times are already here. The landlords are in a fantastic position already."

Rafat Mattar from real estate agent Eqarat also welcomed the regulation announced yesterday, saying "definitely it's good".

"It's great. It is half of the old percentage increase. That is a good rule," he said.

Samra Usman Adres from Queen Style Real Estate described the new rule as "fantastic" and "very good".

"I know that tenants would be happy about this because everyone is suffering as the rents are very expensive," she said.