Property developers are scrambling to register with the Real Estate Regulatory Agency (Rera), as the deadline for registration of the guarantee account, also known as the escrow account, ends on December 28.
As of December 13, 285 companies had registered with the agency, which estimates the number of developers in Dubai to be 500.
"We expect the number to increase before the Eid holidays. They just need to register with us and the formalities can be completed later," Mohammed Sultan Thani, director, development and marketing administration, the Dubai Land DepartmentDubai Land Department
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, told Emirates Business.
However, those who fail to register will face penalties from January 1, he said.
Penalties under the Law No 8, which governs the guarantee account, include imprisonment, or payment of a fine not less than Dh100,000, or both for developers without the licence. Those submiting false documents or misstatements to the authorities concerned in order to obtain a licence, or those who knowingly sell units in bogus property developments will also face penalties.
As earlier reported by Emirates Business, the land department will "name and shame" developers who fail to meet the trust account registration deadline.
The department will publish full-page adverts in local newspapers that will have a "green" and "red" list of developers on December 28.
Those mentioned in the green list will be the ones who have adhered to the escrow account law, while the red list will contain names of developers who have failed to register, Thani added.
Twenty banks have been approved for operating trust accounts, according to Khawla Mohammed Ali, real estate researcher at the Land DepartmentLand DepartmentLoading....
To resolves disputes between real estate developers and buyers, the government is planning to set up a judicial committee. "The government is reviewing the matter," said Emad Eldin Farouq, the Dubai Land DepartmentDubai Land Department
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legal counsel.
Among other laws being considered is one that will regulate the real estate developer. "The Land DepartmentLand DepartmentLoading... will introduce new regulations, including a law to regulate the developers in the near future," he said.
"We were dhow-racing earlier, but now we have entered the F1 track. We are correcting and rectifying all the problems to ensure that the end-users benefit," Sheikh Juma bin Thani Al Maktoum, head of the trust account, the Land DepartmentLand DepartmentLoading..., said.
"We have done our part, now it is now up to the developers and investors to fulfill their duties." The Land DepartmentLand DepartmentLoading... officials urged brokers and investors to approach them if developers did not resolve their issues. "You need to do your homework well. If you have any unresolved issues, you can come to Rera," Farouq said.
Land DepartmentLand DepartmentLoading... officials advised buyers and investors to get their properties registered with the department and obtain a title deed. "The title deed is the only proof of ownership and guarantees your right to inheritance," said an official.
To further safeguard buyers' rights, the account trustee will retain five per cent of the total amount of the guarantee account after the developer obtains the completion certificate for one year after the units are registered in the names of buyers.
"The purpose of this retention is to act as a guarantee that the developer will promptly and effectively rectify defects in the property that are apparent on completion or which may become apparent within the first year following the hand-over," Sheikh Juma said.
The government will within weeks announce the new Strata Law, which has been recently signed by the Ruler of Dubai.
The department will also launch a "ranking and evaluation" programme for real estate agents. There are currently 2,811 registered agents in Dubai.
According to the department, the value of transactions has gone up by 74 per cent to Dh113 billion in 2007 from Dh65bn in 2006, while growth in registered real estate units was 36 per cent to 72,000 from 53,000. An official survey on demand and supply in the Dubai real estate sector will be released in April, Khawla said.
In Dubai, there are over 23 designed areas where expatriates can own properties on a leasehold or freehold basis. Any transaction done in other areas will be "null and void", an official said. Freehold is perpetual, but leasehold is restricted to a term of up to 99 years, said Farouq.
"The visas are regulated under federal law, but the Dubai Government has submitted a proposal to the federal government" on the issue of visas being granted on purchase of property in the UAE, he said.
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source: zawya.com
