OFFICIAL MAGAZINE OF REAL ESTATE REGULATORY AGENCY
MANAGING EDITOR K Raveendran
MANAGING DIRECTOR Sankaranarayanan
GENERAL MANAGER Radhika Natu
Message from the CEO
Ambily Vijaykumar Vanit Sethi Manju Ramanan
email@example.com firstname.lastname@example.org email@example.com
Thanks 2009 welcome 2010
After a year of tumult, what were the economics, and analysis, and media reports all about? What’s going to happen to our economy and RE sector, they asked, but it was just personal views being aired, and they were proven to be not accurate at the end of the day.
Ujwala Ranade Sales and Marketing Account Managers
Accounts & Administration
Biju Varghese Circulation Supervisor
Ibrahim A. Hameed
The theory of winners and losers are in all sectors but all the turbulence and stormy weather should not stop us from working and planning for a better tomorrow – and to learn from our mistake. Only successful people look for an opportunity in a time of crisis and use those opportunities as a base for new successful journeys. In the tough time of 2009, we achieved: to secure and document the real estate rights of investors by issuing their title deed in the world’s fastest time; and we did manage to satisfy many investors of numerous nationalities. We did raise the standard of the service provider and succeeded to register professionals as well as developers, agents, consultants and valuers so the sector will be serviced better and professionally. By securing trust and professionalism we raised the bar of transparency by securing trusted data for the market to use; and by publishing market reports. We use the world wide web (www.rpdubai.com) to update the world of our sector transactions as they happen.
Printing Asiatic Printing Press L.L.C., PB 3522, Ajman, UAE. Tel. 06 743 4221, www.asiaticpress.com, email: firstname.lastname@example.org Distribution: Tawseel PB No 500666 Dubai, UAE. Tel: (+971 4) 342 1512 Sultanate of Oman: Al-Atta’a Distribution Est., Kuwait: The Kuwaiti Group for Publishing & Distribution Co.Bahrain: Al Hilal Corporation, Qatar: Dar Al-Thaqafah, Saudi Arabia: Saudi Distribution Company RERA neither takes responsibility nor accredits any studies, research or statistics that are not issued by it.
So 2009 wasn’t that bad after all and now, we are starting 2010 with strong beliefs that DUBAI is our hope and the place where we can make our dreams happen without fears. That is why we are set to go with our new strategic plan to achieve a sustainable sector. At the end, let’s be “optimistic” as the Japanese define it by “ having enough challenges to give life meaning” and after all 2009 made us better and wiser.
Eng. Marwan Bin Ghulaita “The future belongs to those who believe in the beauty of their dreams” E. Roosevelt
Sterling Publications FZ LLC Loft Office 2, G 01, Dubai Media City
P.O. Box 500595, Dubai, UAE. Tel. +971 4 3678061 + 971 4 367 2245, Fax +971 4 367 8613 Website: www.sterlingp.ae Email: email@example.com Overseas offices: India: Anand Vardhan, DII/89, Pandara Road, New Delhi, 110003. Tel: 0091 1 26517981 Bahrain: Sunliz Publications W.L.L, PO BOX 2114, Manama, Kingdom of Bahrain. Tel: 00973 17276682
Message from the Director General
Setting benchmarks globally The Land Departmentâ€™s vision is to bring global recognition to Dubai as a key benchmark setter in all aspects relating to real estate regulation and registration. I am happy to report that the Land Department has already taken great strides towards this goal. Land Department seeks to create a real estate sector that follows global best practices and standards to guarantee the rights of all stakeholders and contribute to the development of society. The department has been to the forefront in applying clear and transparent regulations in the real estate sector so that there are no ambiguities in the practices that govern regulation of the property sector. The idea is to minimize and eliminate uncertainties in the administration of real estate regulation and registration. We believe the provision of distinctive and efficient real estate services will help attract investment into the sector. The adoption of global best practices also instills confidence in the investor community that Dubai and its systems can meet their expectations.
DUBAI REAL TIMES
The Land Department spares no effort in encouraging professionalism in the sector, whether it is in the administration of the regulatory and registration system or by stakeholders such as buyers, sellers, property agents, consultants etc. The department is constantly striving to upgrade the skill levels of its staff so they are up-to-date with latest trends and practices in the industry.
Various progammes undertaken have, and continue to, strengthen the knowledge base of the local real estate sector and prepare everyone involved to cope with future challenges. Similarly, the Department has been a pioneer in introducing and developing a legal framework which willlead to the smooth conduct of the real estate sector and it has consistently provided leadership and guidance to the regional real estate industry. The Land Department will not be found wanting when it comes to developing a healthy and efficient real estate industry that secures the interest of every segment.
Sultan Butti Bin Mijrin Director General, Land Department
C O N T E N T S
4 Cover Story 2009 A year of achievements
13 Personality Ahmed Obaidat
14 Acheivements 15 Burj Khalifa 17
Building trust steadily
A real marketplace The snags of new property Dubai turns to professional mediation to resolve real estate disputes
26 Community 28 Focus Infrastructure
36 Dubai Real Estate Laws
DUBAI REAL TIMES
DUBAI REAL TIMES
A year of achievements Dubai has had an eventful 2009 By Linda Benbow and Ambily Vijaykumar
What are your expectations for 2010? “I thought that 2009 was tough. But 2010 is going to be a tough year too. People are going to be looking very closely at service charges as they rise. They are going to be upset at having to pay high prices for something they cannot immediately see. We have been put in the position of trying to mediate, but this is not our core business. Our core business is to protect real estate rights and to regulate the market. This is what we are here for. But people come to us with many problems, mostly of a financial kind.
Marwan Bin Ghulaita
The real estate sector will be more professional. The market will be more mature, and, I think, that the Dubai real estate market will change from individual investor to institutional investors, because the opportunity is there and the big institutions have the funds to come and buy. It will be different from the old days when a company would buy accommodation for their staff. They will, of course, still do that, but this time it will be institutions looking for an investment and people to rent their properties to. End users who live in Dubai have already bought. Now it is time for the big hedge funds to come and buy. I think 2010 will be the year of establishing real estate trust REITs. In other words, groups of people will invest their money in buying individual homes with the aim of making a profit in the long term. REITs are good as they are ruled by profesprofes sionals instead of individuals. Evaluation and professionappraisal profession
als will be completely changed in 2010 after the publication of a UAE appraisal book of rules. It has already been written and is awaiting final approval. 2010 will see the role of RERA more internationally recognised since we are members, and sometimes board members, of a variety of organisations. Sharing our knowledge will help all of us get through difficult moments. We are members of ARELLO, and two of us are members of the Board too. 2010, let us enjoy it.” Mohammad Sultan Thani, Assistant Director-General explained that Land Department has a new vision, and a new mission.
Vision : To become one of the key benchmarks worldwide for real estate regulation and registration
Mission : To create a real estate environment which applies best practice international standards to guarantee all stakeholders’ rights and contribute to the development of society by : • Developing and applying clear
and transparent real estate regulations • Providing distinctive and efficient real estate services that help attract investment into the sector • Increasing real estate knowledge “We became part of the international real estate community, have joined a lot of associations and have hosted a lot of countries who have travelled here to see our systems. I travelled to Norway recently to see their well established regulatory system and brought back a lot of information. We are also trying to visit other countries with the heading of ‘emerging markets’. Some of them emerged a number of years ago, as Dubai is doing now, and we would like to see what worked for them and what didn’t – so that we will not make the same mistakes. We have an agreement to work in Saudi Arabia towards new regulations for the city of Jeddah. We are discussing the practice of using the system and the electronic programme that is needed. We have a company, Emirates Real Estate Solutions, who are contracted to provide assistance. We are working very closely with the World Bank who are currently working on registering properties. In various market polls we have steadily gone upwards in regards to our handling of the real estate market, customer complaints, fees and more. I am part of a team who work on how government departments can improve the way they work with
DUBAI REAL TIMES
arwan Bin Ghulaita, CEO of RERA said: “In 2009 we, the whole department of RERA, put a plan in operation which we called TPT, i.e. Trust, Professionalism and Transparency. We are members of a number of international organisations, which is an important audience for us. They consist of professional people who know what is happening in Dubai and know how to distinguish the truth from talk. We are planning to publish a statement about TRT about how we are regulating the market, the professionalism of the work here, the transparency - everything is on our website, etc. This will be sent to international organisations who are professionals and will know how to check the truth of it. They will circulate it among themselves at seminars, conferences, etc.”
5 Mohamed Sultan Al Thani
DUBAI REAL TIMES
business people. It is all to do with transparency, ease of paperwork (or internet work), and suchlike. We are proud when we see how we have improved in our core businesses, especially in relation to registering a property and a completion of all paperwork within 15 minutes. We are also improving the way we deal with customers – we won the customer satisfaction award, and employee satisfaction award, last year. We put it down to the respect we give to them.”
What are your expectations for 2010? In 2010, we will be rolling out a new registration system. It will give us more opportunity to give better services to the client. E-registration will enable a lot of paperless work without the need for the client coming to us. Our system is the best in the world. We are not at the top yet, and are still hungry to improve. That is why we visit other countries to learn from them. But actually, some of them are coming to us and saying “you can adapt better than us”.
The thrust for the year 2009 at RERA’s Trust Accounts Department has been to establish a well-oiled communication channel with the investors and developers. The results are there for all to see with a database of 793 escrow accounts with 26 banks being sorted out. This has been the result of a year’s efforts by the department that entailed not only asking developers to provide them with the missing documents required for registration but also hand-holding them into finding a solution. For instance, during the course of collecting information on the accounts, the department stumbled upon the knowledge that a lot of the companies that had purchased land from the master developers here and had begun construction were off-shore companies, and hence, did not have a licence. That is when RERA offered these companies an alternative. “The solution was to ask the company to register at JAFZA. Later, we gave them a temporary licence to develop the project so that the investor money remains safe,” explains
The Trust Accounts section plans to strengthen its channel of communication for investors and developers to benefit
Ahmed Khaleid Ahmed Obeidat, Financial Controller, Trust Accounts Section. It wasn’t an instant cracking of the whip, says RERA. With the law regarding registrations already in place since 2007, it was only a matter of establishing the correct channel of communication with the investor and the developer who were largely ‘unaware of the rules’ while doing business in Dubai. “What was happening was that investors were putting in money in the place without doing proper research regarding the rules, and now they are in a tight spot. What we wish to tell everyone is that the RERA website, www.rpdubai.com, has in-depth information about the rules and regulations affecting the real estate market in Dubai, and so, those who are investing in the emirate should be aware of the rules. They should study the rules first and then take an informed decision. Relying on word of mouth is not a wise thing to do,” adds Ahmed Obeidat. As part of the 2009 exercise, the Trust Accounts section sent out reminders, legal notices and final legal notices to developers whose data entries for the registration were not complete. The positive response for this initiative can be assessed by the fact that only two final legal notices had to be sent out by the department. RERA is of the view that these
steps have gone a long way in reaffirming investor faith not only in the market but to a very large extent in the government. Continuing with their initiatives in the year 2009, 2010 will also see many more regulations being enacted in connection with managing and maintaining the various escrow accounts. Assisting the department will be the planning section that is in the process of developing the yearly programme chart for the initiatives that will see RERA further consolidating interaction with investors and updating them on their rights as well as the real estate laws. The laws, the team assures, will be made simpler “for all stakeholders to understand and adhere to”. The current global financial crisis and the impact it has had on Dubai is not being viewed as a deterrent for the real estate market by RERA. They say that this current price of real estate is the “real price” and so this is the right time for investors to put in their money into the market. “Places where infrastructure is complete are doing very well. For instance Marina, Sports City, Business Bay, Burj District and Internet City are few among them,” informs Essa Saeed Ahmed Al Mansouri, Head of Trust Accounts Section. The department says that it does not serve any purpose to look back. Underlining the need to look to the future and assist in re-building
Mohamad Khodhr Al-Dah
Essa Al Mansouri
What are your expectations for 2010? RERA says that the year 2010 will see a more stable economy and hence a more stable real estate market. The bad press Dubai got in the international market on the debt repayment issue is an “unreal assessment by the media” says RERA. “It is not Dubai as an emirate that has defaulted, it is a company and it is a part of our asset and we believe in that company. The company is not bankrupt, so the media needs to bring out the right information,” opines Al Mansoori. They say that Dubai has now become a benchmark for developing countries to follow since the “model of development in the emirate has been very successful”. “Dubai has a lot more to offer and there are a few surprises in store for the world to see how this place can bounce back. We, at the Escrow Department, plan to do our bit by spreading the right information about the laws and rights for investors and developers alike,” concludes Khaleid Ahmed Obeidat. Mohamad Al-Dah is Head of Taqyeem (Real Estate Appraisal Centre) which was founded in April 2009. Since then, the department has worked vigourously in the background, preparing to come out in 2010 with valuation and appraisal
laws, guidance documents, training programmes and more. He travelled abroad last year, making contact with Valuers Associations and applying for membership to others. “There is a movement worldwide to harmonise valuation standards. Something that is easier said than done. IVSC has gone a long way towards this. They have their own
standards which a lot of countries are adopting. In UK, the standards used are RICS, which are now IVSCcompliant.” What are your expectations for 2010? I would like to see the law issued. And I would like to see the start of registration of valuation companies and individuals. We hope to be-
come members of IVSC next year. Also, I would like to complete the things that we have started so far, although we are going slowly because we are awaiting responses from other professionals to our recommendations. We listen to people, we have to, in order to make sure that we have covered all aspects.
Taqyeem – Real Estate Appraisal Centre - Achievements in 2009 Legal: Fully drafted by-law for the registration of valuation companies and individuals, currently being reviewed with the relevant authorities. Registration: Finalising the internal procedures (with DLD/RERA) for the registration of valuation companies and valuers as per the proposed by-law. International Cooperation: Official visit to UK and Belgium to meet bodies such as: • VOA (Valuation Office Agency) – UK Government • RICS (Royal Institute of Chartered Surveyors) • TEGoVA (The European Group of Valuers’ Associations) • IRRV (Institute of Revenues Rating and Valuation) Associate Membership of TEGoVA (achieved in November 2009) Membership of WAVO (in association with RERA, achieved in Summer 2009) MOU signed with RICS in December 2008 regarding training Applied to the IVSC (International Valuation Stan-
dards Committee) for membership in Summer 2009 Launched the Arab Appraisal Foundation in October 2009 in Dubai. Valuation standards: Taqyeem is working on publishing local valuation standards by the name of the Emirates Book. This will be compatible with international standards. Guidance documents: The following documents are being written by Taqyeem to help the valuers in Dubai and to raise professional standards: • Taqyeem Code of Ethics • Taqyeem Educational Requirements • Code of Measurement Practice (in association with RICS) Training: Course and examination materials for valuers are being developed in cooperation with Dubai Real Estate Institute (DREI) and leading Dubai valuers. This is to qualify valuers for future registration with Taqyeem. CPD (Continuous Professional Development) courses are also planned. Publishing: Taqyeem contributes regularly to the Dubai Real Times (English) and Al Taboo (Arabic), both publications of RERA and DLD respectively.
DUBAI REAL TIMES
investor faith in the market is their primary target.
DUBAI REAL TIMES
Ali Abdulla Al Ali, Head of Real Estate Licensing Section, informs us that: “We are currently working on a project called Tamdeem. We are creating a website system for about four sections in our department. It will be connected both internally and externally so that it will be available to all. This will cover licensing, permits, inspections and broker registration. There was a gap between us and DED before. About 4000 licenses were issued by Economic Department while the number of registrations with our department was around 2,000. We cooperated with DED through inspections, and have reduced the number of unregistered companies from 2000 to 790. We have announced in the newspapers that we have given one month for all unregistered companies to comply. We have another project with DED regarding licensing of real estate activities, our systems share information with each other, so that the customer does not have to go from one department to another. The department has cooperated with the Ministry of Labour, to have a computer link with them so that when people come to get their licenses there is no need for them to bring their papers relating to the number of employees as we have a direct link to the information. We have worked with DMCC on the topic of issuing freehold licences for brokers. A yellow license allows you to work within a specific area of a free zone. There are four types of licenses, including one for timeshares. We check employees by looking through the newspapers and magazines, looking for unregistered offices and brokers. We cur-
rently have more than 100 cases after our inspections. We have created some new real estate activities such as Owner’s Association management and supervision management services; details of these can be found on our website www.rpdubai.com We have activated an electronic archiving system. We are working towards bringing out a publication about brokers and licensing generally. What are your expectations for 2010? I would like to see the fulfillment of the various projects that have been started such as Owners Associations, Ijari and our web site. Mahmoud Hesham Al Burai is the Director of Real Estate Sector Development Department. He explained that “We have had so many achievements during the past year. The role of this Department is to activate RERA’s role in achieving sustainable and integrated development. By that we mean that we want to create a safe market, upholding the rights of investors and others in the market. We have four sections in this Department: Research, Data, Awareness and Development & Training.
Mahmoud Al Burai
At international recognition level we have joined seven associations, and are a big player in decision making along with many other international regulators. We have been elected to be board members of ARELLO, IREFA and
IRES and we started our own MENERES under the IRES umbrella. The whole idea of these memberships is to learn from other countries experiences – we don’t want to make the mistakes they did, we want to build on what they have already reached. Also we want this to be a pro-
International groups that RERA joined during the past year
Headquartered in Colorado, in the United States, ARELLO is without doubt the most comprehensive and influential association of real estate regulators across the world. ARELLO's chief members include government regulators from the US, Latin and South America, the Caribbean, Asia, Australia, Europe, Africa, and now with Dubai as its newest member, the Middle East. It also has members from the private sector, including industry trade associations, exam providers, education content providers and training institutions, as well as affiliate organisations from real estate and allied fields. The mission of ARELLO is to foster communication between government regulators, as well as the private sector, on a very global scale to create fruitful discussions, find solutions to challenges, create licensing and legal reciprocity agreements that span international borders, and create uniform best practices for the industry that are adopted on a global scale.
International Real Estate Federation (FIABCI) With more than 50 years of experience and chapters in nearly 50 different countries, FIABCI – the International Real Estate Federation – is the world's most all-encompassing real estate organisation that brings together industry experts from all related fields on an international scale. FIABCI offers members networking opportunities with professionals in more than 60 different countries with more than 100 national real estate associations, a relationship with the United Nations Economic and Social Council to help contribute to and develop global housing standards and best practices. FIABCI has a heavy focus on education with a collection of partnerships of reputable universities around the world; as well its own in-house academic institution, the FIABCI University.
World Association of Valuation Organisations (WAVO) A global body, based in Singapore, WAVO's members are professional property valuation organisations which are active in property valuation, consulting, education, public sector policy or private practice. WAVO upholds the highest benchmark in property valuation standards and industry ethics. WAVO has developed a comprehensive series of courses for valuation professionals throughout the world to be a part of and enhance their skills.
Asian Public Real Estate Association (APREA) APREA is the trade association and representative body for the Asian real estate sector. Its membership has expanded to include neighbouring regions, including the Gulf. APREA members enjoy access to the most up-to-date data and research, reports on various aspects of real estate across the Asia Pacific region, networking opportunities among industry experts and educational and training courses.
Royal Institute of Chartered Surveyors (RICS) RICS' brand is the ‘mark of property professionalism worldwide’, and its
mission is to train, licence and certify surveyors and valuers in the property profession by maintaining the highest possible standards of excellence. RICS members work in 146 countries and work in property, construction, land and environmental sectors. RICS provides research, data, consultative services and training to its members. RICS is frequently used as the benchmark for excellence in surveying and valuation, and its chief publication The Red Book is globally accepted as the defining guide to survey and valuation. Members enjoy access to RICS resource library and database of RICS' certified experts located around the world. RERA is strategically aligned with the MENEA chapter of RICS based in Dubai.
Urban Land Institute (ULI) ULI is a US-based organisation established in 1936 that today has more than 40,000 members worldwide stemming from real estate and a collection of closely related fields. ULI is a real estate think-tank focused on providing education and research to the entire industry, from private bodies to the public sector and academic institutions. Through meetings, conferences, online webinars and trainings, regular publications and educational courses, ULI fosters communication, discussion and the sharing of knowledge and experience amongst its members. ULI's mission is, ‘to provide leadership in the responsible use of land and in creating and sustaining thriving communications worldwide’.
International Real Estate Society (IRES) / Middle East North Africa Real Estate Society (MENARES) IRES is a federation of regional real estate societies including the American Real Estate Society, European Real Estate Society, African Real Estate Society, Latin American Real Estate Society, Asian Real Estate Society, and Pacific Rim Real Estate Society. Each society acts independently, yet enjoys the international cooperation of each other through the umbrella organisation, IRES. IRES aims to encourage communication and cooperation regarding real estate education and research, encourage further development of education and training globally, facilitate academic faculty exchanges and support research projects in real estate on an international level.
Arab Appraisal Foundation RERA’s brainchild, the Arab Appraisal Foundation (AAF) will integrate property valuation standards and practices across the Arab world With the backdrop of property prices in Dubai, and the region at large, experiencing a softening as a result of the global economic crisis, an initiative was launched to integrate land and property valuation standards and practices across the Arab world. The AAF that is backed by the Arab League of 22 states has been founded to spearhead valuation reforms in Arab nations. The foundation also had inputs from the world's most influential real estate professional organisations, and is being considered to be the Arab equivalent of influential international institutions such as the US Congress-approved Appraisal Foundation and the UK's Royal Institution of Chartered Surveyors (RICS).
DUBAI REAL TIMES
Association of Real Estate Law License Officials (ARELLO)
DUBAI REAL TIMES
fessional market. In the beginning anyone could be an agent, broker or valuer. But now it is different with people having to go through training, education of current laws, obtaining a certificate, etc before they are authorized to work in a particular sector. Soon it will be compulsory for each broker to do a minimum of 10 hours per year in order to keep their certification. We also want a platform to be able to discuss topics with those who know about the market, get feedback and comments. We will encourage the set up of developer groups, broker groups, real estate agent groups and research company groups, each with their own advisory board. We want to be connected to the market and for it to stand on its own. After that the next level will be self-regulation with each group setting its own high, international level of standards. They will have their own steering groups to make sure that their members abide by the rules, or reprimand those that need it. We publish monthly reports in Dubai Real Times magazine, and on the RERA website, www.rpdubai. com, to increase transparency. Whenever we receive a call or request for data, we provide it. We are currently working on a transparency project to make data more accessible, more user-friendly for those who want to access it on the website. We have trained more than 8,500 brokers. We started our own diploma for real estate professionals. We are starting programmes for UAE nationals to help create a knowledgeable base for future job vacancies. We give 50 scholarships each year and so far approx. 65 Nationals have been trained and been given Diplomas under this scheme and in total over 1100 Nationals have been trained this year. We are now running Dubai Real Estate Institute (DREI). We have signed statistic agreements with other institutions such as DEWA to exchange data and information.
We are starting research work with experts from the industry as well as universities. We organized two international conferences – ARELLO (100 regulators came to Dubai to discuss how to formulate international and uniform laws of regulation. What standards to set for training, etc); and a valuation conference with the Arab League, with the main outcome being the creation of the Arab Appraisers Foundation. We provide the emirate’s Advisory Board with data about the market on a weekly basis: the transactions, prices, supply, demand, forecast and more. We did a benchmarking study with Singapore, Sweden, UK, USA which has resulted in initiatives which we will undertake next year. We are also working with other government agencies and with Ajman Real Estate Regulatory Agency. What are your expectations for 2010? Dubai Land Department has produced a Strategic Plan for 2010 and I would like to see all the plans completed successfully. In relation to this department, we will be assisting in implementing clear transparency connected with the release of laws and regulations. We are now working on taking the Jones Lang LaSalle’s Transparency Index from Tier3 to Tier2 level and intend to attain this next year. Next year will be a year of transparency. We will provide data and information more freely. There are five real estate groups which must be professionally functional next year, i.e. developers, brokers, valuers, etc. plus we are working on setting up a Real Estate Professional Development Centre. MENARES will be having a major conference in 2010 and we will start a membership campaign with people from all over the MENA region. We are also working on a project for data and statistics index board which will give decision makers one place to find all the real estate transaction numbers and suchlike, updated regularly. This will be on a separate website for those who sub-
scribe because they need to know the information before making important decisions. There will be more training courses. We would like to increase the number of UAE nationals in the market. We will be showing more studies, analysis, forecasting. We will be attending international conferences to discuss benchmarking in terms of regulations and standards. The market, generally, is getting mature. Investors are getting mature. Developers and stakeholders too. Now we all understand the game. Past deviations from the truth will not be repeated. Feasi-
seen as a step in the right direction to be able to reach out better to investors and developers. For the year, the department is focusing on playing the role of a ‘facilitator for the customers’ with special emphasis on online activities to carry out transactions conveniently.
Transactions and Auctions Section: The first quarter of the year 2009 began slowly for this section with daily transactions falling in the 5-10 range. But with the end of the year between September and November, with the activity in the market picking up, the number of transac-
Humaid Al Shamsi
bility studies will be done with attention given to the gaps missing from previous ones. We need to work more on the quality of living and how to make this market more sustainable. Overall I am optimistic and am expecting a promising year next year. The Dubai Land Department plans to open up a new branch in Bur Dubai in 2010 to make it easier to handle the ever increasing traffic to its office located in Deira. This is
tions has gone up to 40-45 per day. This is definitely not in line with 2008 figures but, “the figures of the years before the financial crisis were inflated,” says Humaid Al Shamsi, Head of the Transactions and Auctions section. There has been a total decline of about 15 per cent in the total number of transactions at the section in the year 2009, but now that has stopped and there are places that are picking up. Al Shamsi says that the off-plan market is virtually non-
Khalifa Ali Al Salfa
of the developers, we also established a communication line between the two of us. It is the Real Estate Registration Guarantee section that is entrusted with the responsibility of communicating with the developers and tackling each case on its own merit,” says Khalifa Al Salfa. “But then, there are cases where big developers are finding it difficult to collect information regarding all their investors and units and hence, they are being given time. There are small developers on the other hand who are delaying the registration process - and that is not acceptable. There are two channels that we are employing to ensure that the project registration activity is carried out smoothly. Firstly, it is the Registration Guarantee section that handles the case, but when developers do not show the urgency required for the process, it is the Escrow Account Section that springs into action, and apart from filing legal notices also has the option of freezing the escrow accounts for developers. There are also cases in the market where it is the investor who has opened up a case against the developer for not doing the needful to register their development. So, the onus then is put squarely on the developers to comply with the law and register their projects.
Khalifa reveals that the year 2009 has been a year of registrations. “The department has covered most of its targets for the year 2009 and all their eyes are firmly set on their plans to ensure that the market is more educated regarding all the real estate rules and regulations.” What are your expectations for 2010? “2010 will be a year when handovers will happen and where the price of these projects will reach reasonable standards. It will also be a year when speculators will be completely wiped off the market, and overall, it will be a good year for the market,” says Khalifa Ali Al Salfa. The department also plans to facilitate their customers by making their online activity active.
Real Estate Relations Regulatory Department The real estate relations regulatory department was created to serve as a diplomatic party in the marketplace that manages relations between owners, property managers, agents, tenants and landlord associations.
Mohamed bin Hammad, Head of Real Estate Relations Department
DUBAI REAL TIMES
existent now, but in places like The Arabian Ranches, Dubai Marina and Discovery Gardens where readymade property is available, transactions are going on. The section is also making the necessary “adjustments to suit the needs of all investors”. One such step has been to categorise the registration process into two ways. The first is to individually take appointments electronically and carry out the process and the next is to approach through the developer. For instance, instead of each investor with developers like Emaar or Nakheel, approaching the Land Department separately, they can now ask their developers to do the needful. So it is upon the developers shoulders to get the registration done by bringing in a list of all their investors and hence the process has become less complicated. With a single point of reference for investors, this method also becomes hassle-free for the Land Department. “A lot of our customers complain to us about the service fee and the maintenance charges, but as a department we are not responsible for deciding what the fees will be,” informs Humaid Al Shamsi. There is a separate section that handles this issue and according to them, it is up to the investor to stay informed about such issues before putting money into any real estate development. What are your expectations for 2010? The section says that they are very hopeful that there will be more transactions happening all over Dubai. Khalifa Ali Al Salfa, the head of the Project Registration Section says that 80 per cent of all projects in Dubai have been registered with the Land Department and that the remaining 20 per cent do not require registration since they never took off in the first place. All major developers in the emirate had begun registration of their off-plan projects. The onus was on them to ensure that their projects are registered with the Land Department. “For the sake of the convenience
Achievements of the Real Estate Relations Department for the year 2009 and Management objectives for the year 2010 Achievements
• Building relationships with specialists working in the leasing business, relationship management companies, and owners to determine the nature of cooperation and the study of best practices to regulate the contract between them; and determine the services and duties of each party (the initial registration of management contracts). • Registration of leases for the initial activation of Law No. (26) for the year 2007; work on the requirements for the establishment of an electronic system for the official registration of management contracts and leases. • Issuance of the first index for rent in Dubai, to be developed and updated regularly so that it is a point of reference in the resolution of disputes concerning increases in rent and, upon renewal, determine the increased rate on the lease. • Launch calculator rental linked to the index, to calculate the rates of increase on leases. • Consider the linking of assessment of real estate and rental specifications, preparation of lists of specifications for each type of real estate, and write an account of each specification (evaluation points). • Study models for management systems, landlord associations, joint ownership to compare and identify best practices for adaptation and suitability in accordance with the environment and the domestic laws of the emirate. • Listen to the complaints of property owners on the topic of common property which relate to calculating service charges, and know the reasons and elements covered by the fees and rules applied to facilities management. • Identify the basic elements in the calculation of service charges and introduce a special regime for the calculation of approved service charges to protect the owners. • Participate in the development of controls and
DUBAI REAL TIMES
Goals for 2010
• A general framework for the work of leasing, property management through the establishment of lists of companies operating in accordance with their licences, groups working in this sector and methods of current practices and ways of development (workshops and meetings). • Registered owners and associations with the launch of a programme for them. • Start activating the role of landlord associations through the application of rules and regulations.
• • • • • • • •
systems to regulate the management of landlord associations, joint ownership by examining the regulations provided. The establishment of workshops to explain the concept of joint ownership and the system of associations of owners, plus oversee the rehabilitation of real estate developers in this area. Study and processing of an electronic system dedicated to the registration and regulation of housing owner assemblies. Oversee the establishment of temporary staffing for some projects. Submit a proposal for the establishment of an active management oversight service to owner’s associations and the requirements for a licence. Launch of a standard lease to regulate the relationship between landlord and tenant and save the required data. Management contract to regulate the relationship between the owner and lessor (management companies). Building a database of companies and workers in the areas of leasing and property management Contribute to building a real estate database investing in this area through the recording of real estate data in the system prepared for the registration of leases. Control and regulate the process of leasing and property management system through the development of controls, systems and mechanisms. The development and standardisation of an electronic system for recording and preparation of all real estate management models. Develop a rental index for the preparation of studies and reports for investors, tenants and landlords in general and real estate, linked to specifications. Liaison and replacement of erroneous practices of the existing lack of orderly process. Coordinate with government agencies to take advantage of this data for mandatory registration of contracts.
• Activating the role of services companies, the administrative supervision of the owners’ associations through the granting of approvals to engage management-landlord associations. • Study of the project to establish a standard contract to manage the landlord associations; to organise the work of management companies and owners’ associations. • Establish a database of landlord associations. • Activate the electronic system designed for calculation of service charges.
uman resource is the backbone and most important resource for both country and corporate companies. Many experts are considered to be extremely valuable both to their country and their company owing to their wealth of talent or expert knowledge. Ahmed Khalid Obeidat is one such distinguished and talented expert that RERA has gained during its journey of achievements. Ahmed earned his degree in Accounting from the USA followed by a professional qualification in Auditing that led him to work in several companies as an auditor for nearly 12 years. His impressive portfolio of work took him to Jordan, Kuwait and the UAE where he gained intensive experience and knowledge. From being an auditor, Ahmed then ventured into a new path diversifying into a new powerful field that would only add to his experience – the field of real estate. Finding the offer from RERA very interesting because of his admiration for Dubai, Ahmed accepted the challenge as he believed that this place would lead him to his goal, enhance his skills and award him a high profile job in one of the most active sectors in
Ahmed Khalid Obeidat
Dubai and the whole world. In his own words, Ahmed finds RERA a good end-product of the government’s efforts in regulating the real estate market. He feels that a respectable agency like RERA can enforce real estate rules and regulations, educate the sector parties and have the ability to attract more investments to itself in a stable and safe market. His work in RERA includes auditing financial reports, projects accounts and the trustees accounting reports. He is also responsible for following up with
developers who haven’t registered with RERA; ensure that developers, trustees etc are committed to work and abide by the rules and regulations of Dubai; beside his job of revising and auditing the financial reports from trustees to ensure sound legal management for the trust accounts . Ahmed believes greatly in the philosophy of HH Sheikh Mohammed bin Rashid Al Maktoum, Ruler of Dubai and Vice President of the UAE. He considers him a real leader who influenced a lot of people by sheer example, not by force of power, and made it possible for people to dream. In his opinion a leader should be smart, passionate and patient. Any leader should have the ability to adjust himself to different circumstances. In terms of qualities in a human being, Ahmed feels that integrity and honesty are a ‘must’ beside wisdom and good manners. Ahmed is always inspired by his first role model – the manager of
the firm where he first worked. He always enshrines him in memory as, he states, he was the person who taught him the alphabet of leadership. After work, Ahmed’s family takes priority in his agenda. For him, it represents loyalty, trust and stability. “You can always count on your family in harsh times,” he says but believes that challenges make life more exciting and enhance your performance. When I ask him about what he thinks is the best and the worst quality in himself, he answers confidently that he is proud to keep his dignity and integrity alive under all kind of circumstances and being loyal to his profession - which to him means giving his best level of performance every single day. He admits that he cannot talk about the worst since he is unable to observe himself like other people can. As for inspiration? His children inspire him to be the best role model he can be. As a person who has had a good experience in life, he believes that anything is possible if someone wants it that bad. He finds his mother the most beautiful aspect of his life as she gave him the faith and the ability for being patient and that is why he looks up to her till this day.
DUBAI REAL TIMES
By Amal Abdul Rahim Al Sahlawi
Dubai is real By Mahmoud AlBurai
DUBAI REAL TIMES
nce upon a time a skyscraper as tall as the Burj Khalifa was only a thing of imagination, a manmade island shaped as a palm tree was inconceivable, and the opening of a hotel as glamorous as the Atlantis in the Arabian desert was beyond anyone’s dreams. Today, Dubai’s dreams have been realised … and these dreams continue. For those who claim “three’s a crowd” in Dubai today, and that the
Atlantis, Palm Jumeirah
city is abandoned, we show them a population of 1.7 million and growing into 2010. For those who say that Dubai projects are on hold, we point to the Burj Khalifa, Dubai Metro and Atlantis - three big projects completed in 2009 - which show that Dubai will not give up its crown of being the business, tourism and finance hub in the Middle East and North Africa. For those who say that foreigners are no longer interested in Dubai’s
real estate market, we tell them that the FDI which flooded into Dubai real estate in 2009 was equal to the same in 2007, and fifteen times the real estate FDI value of 2002. For those who say Dubai’s hotels are empty, we say we have above 60 per cent occupancy rates. For those who say that Dubai property courts are overflowing with more real estate cases than they can handle, we show them the list of only 96 ongoing cases in November 2009. For those who say
that consumers have no confidence in Dubai, we refer to the Global Consumer Confidence Index where the UAE was ranked as the 8th most optimistic country in the world as of October 2009. The point I want to get across is that Dubai’s development model is too progressive to fail. The vision and determination of Dubai’s leadership will continue to guide us to build our emirate and persevere amid adversity, regardless of criticism.
Land Department on top of Burj Khalifa
Burj Khalifa At over 800 metres (2,625 ft), Burj Khalifa has 160 storeys, the most of any building in the world. It has 37 floors with 164 suites which have been allocated to companies; and office units of up to 228 square feet have been distributed on the decks between Floors 112 to 121 and Floors125 to 154. The total built-up area in the tower is approximately six million square feet, with two million square feet of space for residential units, and more than 300 thousand square feet of luxury offices, in addition to embracing ‘the Armani Hotel Dubai’ and ‘Armani Residences’. The observation deck on level 124, At the Top, Burj Dubai, is a must-see attraction and offers breathtaking views of the city and the surrounding emirate
Handover Plan Burj Khalifa will receive its first residents in February 2010. They will be the first of over 12,000 people to live and work at Burj Dubai. The phased handover of 1,044 residences will start with the Armani Residences and will be followed by The Residences, Burj Dubai. The luxurious Armani Hotel Dubai, which runs from the tower concourse to Level 8 and occupies Levels 38 and 39, will be unveiled to guests on March 18, 2010. The Corporate Suites, a collection of high-end offices, will open from March onwards. An orientation programme is being conducted for all occupants of the tower. Land Department delegation at the top of Burj Khalifa
DUBAI REAL TIMES
delegation from the Land Department recently visited the Burj Khalifa, the world’s tallest skyscraper, which sets a new horizon of architecture and construction, providing integrated services for business and reflecting the great ambitions of Dubai. The delegation was headed by Sultan Butti bin Mijrin, Director General of Land Department and Juma bin Humaidan, Assistant Director General of Land Department; Engineer Marwan Bin Ghalita CEO of RERA; Khamis Al Muhairi, Director of Customer Service and Mohammed bin Hamad, Director of Real Estate and the Regulation of Relations. They were met by Mohammed Daha Head of the Centre of Mortgage Arrangements Registration at the tower, where he was based, who briefed them about the edifice, explaining that units had been registered earlier in their various real estate specialisations. Classifications are for four categories: residential, office, hotels and shops. Formalities will be completed by the adoption of the tower by Owners Associations who will meet under the umbrella of a chosen representative. The Chamber of Commerce confirmed that the administration and maintenance of common areas in the tower are within international standards providing the best of services.
Building trust steadily Ashok Galgotia, CEO of Triveni Group, talks to Vanit Sethi on his first real estate project in Dubai
down the cost of construction to reasonable levels in line with our reasonable selling prices. Besides, we are more into building our brand image i.e. ’La Fontana Apartments’ rather than just some buildings.
banks was very easy. However, the prices of raw materials like concrete and steel rebars were going up every week and one never knew what the right price to sell or buy was. Now, at least since prices have stabilised and the buyers are genuine, real estate is a much better industry to be in. Besides, La Fontana has been backed from day one by two leading bankers i.e. HSBC and Mashreq Bank. The CEO of Arjan liked our concept-drawings and masterplans so much that he kept a picture of the La Fontana Perspective Drawing in his top drawer to show to others as to what Mizin meant by Chicago-style community. Our architects Messrs Arkiplan Engineers & Consultants have been in the Middle East for 30 years now. Subhash Kalra, originally from New Delhi, is our chief architect. So, we had the right beginnings and a solid foundation. Of course, the recession has slowed down our work, but in a way, this has worked to everyone’s advantage as we can now concentrate on providing better quality construction to our clients, and they are happy because their construction-linked payments are more phased out. You see, after we launched on 17th February 2008, within 19 days, 80 per cent of our project was sold out. Working in these two real estate environments -- first a super-boom and then recession -- has been a great learning experience for us. We have seen and learnt in just two years what normally could take up to two decades experience. Recession has actually brought
Do you plan to continue in middle-income housing or are there plans to diversify and expand in other places? We plan to continue in middle-income low-rise housing as we think that’s the future in Dubai, and besides, we are comfortable dealing in that as we don’t want to grow too big. Our customers trust us and we have built a relationship with them. We want to continue building on that trust rather than expand too much and lose the personal touch. We’re also comfortable being in Dubai and especially within the Arjan Master Community. We want to build up a solid reputation – our clients and homeowners are happy as you can see from their comments. They trust us and we cherish that trust. Where in the Gulf do you see the best prospects for properties and why? I would say Dubai itself, despite the recession having impacted strongly here, because this is a city built on talent and enterprise and a lifestyle that most expats are comfortable living in. During the boom period, the Government of Dubai had built a solid infrastructure in the form of a road network, bridges and tunnels and captive power plants. No wonder, Dubai today is the true city of gold and the gem of the Middle East. So, I don’t see myself constructing buildings out of Dubai, even within the country, and neither in India, which is my home country. I think Dubai’s the best for us and we plan to construct more buildings within the Arjan Master Community itself.
DUBAI REAL TIMES
irst, tell us something briefly about the Triveni Group? How big is it and when did it get into real estate? We started in September 1993 in trading and packaging. In 2003, we started manufacturing cable management systems, cable trays and trunking, all in steel, for the construction Ashok Galgotia industry. In December 2006, we got into real estate. La Fontana di Trevi is Arjan stands for. Our project is a Dh81 our first real estate project, located next million project, and our payment plans to the Dubailand head office on Umm are phased, linked to the progress of Suqueim Road. We had our ground- construction. Home-owners have all breaking on the UAE National Day (De- been paying on time and they keep cember 2) in 2008. Our project will be monitoring the progress of our conready in September 2010. The plot is one struction through the RERA website acre (46,600 sq ft), having low-rise apart- www.rpdubai.ae. About 75 per cent of ments (ground + 6 floors). There are a our existing homeowners/ clients are total of 126 apartments with 21 on each end-users and about 25pc are invesfloor (3 studios, 12 one-bedroom apart- tors. Ours is a 100pc RERA-compliant ments and 6 two-bedroom ones). All project. five floors i.e. first, second third, fourth and the sixth were completely sold out Describe La Fontana project for our at the time of our launch. Our phones readers. What are the facilities on ofwere still ringing when we stopped sell- fer and what’s your target group? ing, keeping the entire fifth floor with us We have a roof-top swimming pool and a baby pool, separate male and for our own use or future sale. We want to specialise in low-rise female saunas, a modern gym, jogbuildings because we believe in lifestyle ging tracks on ground-level, a fountain, communities and open plots with plenty a party hall, offices of FM services and of greenery and very wide roads. Arjan, a covered parking lot of 136 spaces where we are located, is a Chicago-style spread between ground floor and the community with a lot of emphasis on basement. There are no commercial eswalkways and gardens. The Purple Line tablishments within this project, makof Dubai Metro (third line – due 2011/12), ing it very exclusive. Our target group is when ready, will pass through Arjan mostly middle-income. The major buyMaster Community where Dubailand ers are Indians, but there are many othHeadquarters (also known as Tatweer ers – French, Chinese, Palestinians, Pakistanis, British as well as Omani, Kuwaiti HQ) are based. and UAE nationals. A total of 18 nationIs La Fontana the only project you’re alities have invested in our project. building right now? Are there any Was getting into real estate the other projects on the anvil? Yes, this is the only project we’re build- right decision, especially at this ing right now and this is our first one. point in time? How has the recesWe do want to build other projects, but sion affected you? within Arjan Master Community itself Actually, at the time we got in, there as we believe in lifestyle projects which was a boom, and bridge financing by
MARKET TRENDS & ANALYSIS
Customer-centric e-government A comprehensive strategy for e-government will ensure a nation’s technological development - and bolster its economic growth By Ramez Shehadi and Raymond Khoury
DUBAI REAL TIMES
lectronic government capabilities - in which governments offer services online to citizens, businesses, other government entities, and employees - is a crucial part of a nation’s technological development. Although countries in the Middle East and North Africa (MENA) region have taken strides in implementing egovernment, there is still substantial ground to cover. To successfully implement e-government, MENA nations must take a customer-centric approach, and governments must create comprehensive, sustainable development plans, according to a new study by Booz & Company. Traditionally, government services or information are obtained by visiting a government office in person. “Instead, electronic government (or e-government) models leverage internet technology to make government services more efficient, reliable, expedient and customer focused” explained Ramez Shehadi, the Vice President leading the IT Strategy Practice of Booz & Company in the Middle East. Around the world, e-government empowers governments to become more customer-centric and to lead their countries in information initiatives. This is an essential issue in light of: Global competition to attract investments and foster diversity in national economic development Pressure for public sector modernisation from citizens and companies. A desire for increased efficiency and service orientation in public administration. The drive for new ways to meet citizens’ needs and offer transpar-
state reforms, thereby introducing a state-of-the-art customer-centric administrative system without the burden and complexity associated with the integration and maintenance of silo-ed legacy systems. The greatest e-government opportunity lies in national development. It will increase technological skills and computer literacy for citizens and will boost private sector initiatives.
Dr. Raymond Khoury has over 17 years of consulting experience in IT strategy, design and implementation management, particularly for large scale public sector e-government programmes. Previously, he worked for the United Nations Development Programme (UNDP) on a number of regional IT and information society initiatives, developing strategies and design requirements and has advised several governments in the Middle East on IT modernisation
ency and participation An increasing digital divide between rural and urban areas “e-government is vital for MENA countries to be competitive globally, facilitate a conducive environment for foreign investments, and constantly support national sector developments,” said Raymond Khoury, a Principal at Booz & Company. Gulf Cooperation Council (GCC) countries’ initial reluctance to information and communication technology (ICT) has changed recently, with some countries now emerging as global pioneers in e-government. In the climate of economic development, reform, and bold commercial ventures, there is a strong opportunity to develop this as part of
Ramez Shehadi leads the firm’s Information Technology practice in the region. He maintains particular expertise in e-government, e-business and IT-enabled transformation helping corporations and government organisations maximise leverage of IT, achieve operational efficiencies, and improve governance of IT services
“The widespread adoption of ICT will also bring cost savings to the state, particularly as a result of better productivity and effective decisionmaking,” stated Shehadi. A number of elements must be in place for an e-government programme to be successful - including a stable political and economic environment. In addition, governments must have an e-government
development agenda with a clearly defined timetable to allow for effective implementation. The country’s citizens must also be comfortable with the resulting new ICT services. “e-government services uptake is directly correlated to the capability of society to access the internet and effectively fulfill service inquiries or transactions online” explained Khoury. e-government provides the platform for independent government institutions to operate in a de-centralised and de-concentrated environment facilitating timely decision-making and more efficient performance. “Allowing the private sector to run certain operations additionally allows for effective delivery of services, usually at a reduced cost. Human resource development in the public sector is also key in the creation of egovernment,” commented Shehadi. “The MENA region will not reap the same overall benefits of globalisation as other regions until e-government is adopted, as it advances national and international ecommerce and hence national and global trade. It is also a key function in the development of countries’ ICT infrastructure, making them more attractive to foreign investors,” said Khoury. e-government adoption is occurring at varying rates in the region. Some GCC states’ bold leap into e-government has been fuelled by leaders’ increasing recognition of the need for ambitious modernisation. To become dynamic, customer-centric and efficient, the remainder must take a leap - but for these countries, effective e-government is still a long way off.
Islamic financing for infrastructure projects
he Dubai International Financial Centre Authority has published the latest in its series of white papers, this one entitled, ‘Islamic Financing for Infrastructure Projects’. The paper highlights the tremendous potential for Shari’ah-compliant financing of infrastructure projects in the GCC and globally, and notes that increasing the Shari’ahcompliant share of such projects would help meet an infrastructure funding demand that ranges from $535 billion over the next decade to as much as $2 trillion by 2020. DIFC has made a substantial, longterm commitment to supporting Islamic finance by providing a supportive business, legal and regulatory environment that encourages growth and innovation in the industry. These efforts include creating a unique ‘Shari’ahsystems’ model of regulation and a legislative regime that provides certainty and clarity regarding Islamic financial transactions. The white paper is another example of this commitment. “This paper is an important contribution to the policy and market discussions regarding both infrastructure finance and the broader Islamic finance industry, and reflects DIFC’s dedication to developing Islamic finance as one of its primary areas of focus,” said Farhan Al Bastaki, Executive Director Islamic Finance at the DIFC Authority. “The paper comes at a time when governments are increasingly looking to the market – through public-private partnerships and otherwise – to help fund enormous infrastructure requirements. At the same time, Islamic finance continues to grow at double-digit rates and increasingly entering the mainstream global financial sector
as an important asset class,” he said. “As well, it is important to note that encouraging a larger role for Islamic infrastructure financing provides benefits both to those seeking new sources of funding and investors hungry for larger and more liquid Islamic securities markets,” Al Bastaki added. The whitepaper highlights that infrastructure projects are ideal for Islamic financing, in part because of Islamic finance’s preference for equity-based and asset-backed projects, as well as because many infrastructure schemes benefit the wider community, which fits well with the moral underpinnings of Islamic finance. An example of this latter point is the recently listed $100 million International Finance Corporation Hilal Sukuk on NASDAQ Dubai and the Bahrain Stock Exchange, the proceeds of which will fund infrastructure and health projects in Yemen and Egypt. The potential for Shari’ahcompliant sources of infrastructure financing also is driven by its low share in overall Islamic financing.
Only 22 per cent of the $40 billion in Shari’ah-compatible financing within the GCC has gone into infrastructure projects, while 11 per cent of the $14.9 billion in sukuks issued in the GCC during 2008 was used for infrastructure. The study provides a summary of the various Shari’ah-compliant financing structures; it examines challenges to increased Islamic financing of infrastructure projects; and it offers possible solutions. The paper’s author, Habib Ahmed, Professor and Sharjah Chair in Islamic Law & Finance with the Institute of Middle Eastern & Islamic Studies, School of Government & International Affairs at Durham University in the UK, said, “The level to which Islamic finance will participate in funding future infrastructure projects will depend on its ability to develop innovative securities (including sukuk structures) and other instruments that meet the legal and Shari’ah requirements on the one hand, and can satisfy the needs of investors and issuers on the other.
Some of the Shari’ah-compliant equity and debt funding structures the paper mentions includes the mudarabah and musharakah equity instruments and the murabahah (cost-plus or markup sale), bai-muajjal (price-deferred sale), istisna/salam (object deferred sale or pre-paid sale) and ijarah (leasing) debt instruments. But the report also identifies a number of hurdles to the increased adoption of Shari’ah-compliant structures. These include a lack of regional and global standardisation, and legal regimes that don’t directly address Islamic project finance structures, thereby creating uncertainty in the case of default or other contingencies. Also, the majority of Islamic financing is debt-based, and short-term focused, therefore, making them inappropriate for long-term infrastructure financing. Some of the proposed changes to increase the Shari’ah-compliant share of total infrastructure funding include an Islamic concession law that would allow granting the use of public assets to private enterprises for a specified period of time. Also, a stable legal and regulatory environment is crucial to giving investors confidence that their rights will be protected. The paper also encourages governments to issue sukuks to raise funds for investment in infrastructure assets. The full white paper is available for download from the DIFC website.
DUBAI REAL TIMES
Shari’ah-compliant finance is a largely untapped source of infrastructure funding, whose requirements in the GCC are estimated at up to $ 2 trillion through 2020
For more information dial +9714-2221112 Or mail us at firstname.lastname@example.org
Escrow and title conveyancing UAE has one of the best in the world Escrow in the United States has been around for 150 years. The Escrow Agent is a neutral third party company that monitors and enforces the terms and conditions of an MOU or Purchase and Sale Agreement entered into by a seller and a buyer. Regulated by the local State authorities, the Escrow Agent is a bonded private company that ensures that the particulars of a transaction conform with the best practices established by the industry. He becomes the neutral intermediary that ensures a secure, balanced and timely closing for all parties.
Conveyancing in the UK In the UK, conveyancing is the legal process by which the transfer of ownership in land is effected safely between a seller
and a buyer. By law, conveyancing is the transfer of title of property from one person or entity to another, or the granting of an encumbrance such as a mortgage or a lien. Property conveyancing by UK law must be done by a solicitor or licensed conveyancer. One solicitor cannot act for both parties, as this would cause a conflict
Escrow in Dubai enTrust & Title has established necessary relationships with Dubai Land Department and RERA to be able to implement Escrow industry best practices. It acts as a neutral third party monitoring the transaction and making it’s details transparent. The company coordinates with parties involved with the property and effectuates the transfer of owner-
ship. Using its transaction management software, it grants parties secure online access to their records, offering international buyers and sellers the most up-todate method of tracking their transac-
tions from start to finish. As a result, the company incorporates the best practices of USA and UK to make UAE’s escrow and title conveyance system one of the best in the world.
Service US Verification of legal ownership and Seller Authority using Biometrics..... Joint Escrow Instructions ............................................................................................. √ Insured Escrow Accounts............................................................................................. √ Title Document Examination...................................................................................... √ Co-ordination with Government Departments, service providers and banks to ascertain outstanding property liabilities ............ √ Itemized Accounting of all funds received/disbursements .......................... √ Loan Coordination.......................................................................................................... √ Document Registration ............................................................................................... √ International Best Practices Customized to each Local Transaction.......... √ Online Account Access.................................................................................................. Transparency .................................................................................................................... √ Real Time Updates on Status...................................................................................... Perpetual Document Archive ....................................................................................
UAE √ √ √ √
√ √ √
√ √ √ √
√ √ √ √
DUBAI REAL TIMES
Escrow in the US
A real marketplace By Hashim Ahmed
DUBAI REAL TIMES
roperty agents, or brokers of real estate, are challenged to help the UAE, especially Dubai and Abu Dhabi, achieve new market growth following the global housing market collapse. Beeyoot.Com has emerged as the first service of its kind in the Gulf region, i.e online selling by owners, connecting sellers directly with buyers and vice versa. This newly established real estate marketplace is available to investors, landlords, individual home buyers and renters. The great news is property agents can now get in on the ground floor by making strategic connections with their For Sale By Owner (FSBO) marketplace. The market is big enough for both options – selling with the assistance of a property agent and selling online by owner. Here is a brief description of four more advantages of linking with this new FSBO web service for Gulf region real estate buyers and sellers:
Increased exposure to potential sellers The online marketplace allows sellers to list their properties. However, working with the web portal, the property agent can get exposure to these same sellers. The site wants to be an instrumental market force, educating property owners in making an informed choice, whether that means using the property agent or selling directly to a buyer online.
Housing market growth What matters to all stakeholders in the Gulf region real estate sector is that more sellers finding buyers for their commercial and residential properties improves the market. An increase in sales volume and median selling prices in property will restore prosperity. For example, current real estate sales will spur future invest-
The website brings buyers and sellers to the point of sale. With clear terms of service and year-round customer support, the portal will help you make this transaction successful through the online marketplace
Beeyoot.com allows property owners to sell directly to buyers. This creates room for a new momentum for the distressed UAE real estate industry ment in the region, provide new occupants for empty commercial and residential spaces, and lead to a new boom not seen since the collapse of the UAE housing market.
Economic growth As in the case of many free market economies, the growth of small businesses will bring economic benefits to all types of businesses and individuals (even if the economic mechanism is the trickledown effect). When more homes and commercial properties sell in Dubai, and the region, business growth will also create jobs for individuals and eventually growth in public services.
Harmonious competition Beeyoot understands the strategic advantages of working respectfully in the same real estate market
with local property agents. Through a professional association with the website, property agents can enhance their own personal or corporate brand. For example, the agent’s properties are now listed on its site’s ‘By Broker’ category. That means property agent information reaches a wider internet audience, especially active property buyers, renters and sellers. Our vision of new real estate growth in the UAE and wider Gulf region is in the best interest of all people who live, work, retire, or start a business in this important market. There are many advantages for businesses to do business here. We hope you are forward thinking enough to accept the invitation to join a grand internet experiment. Working together, we can create more options for property sellers and empower consumers of UAE property around the world. Highlighting the benefits of Dubai and improving transparency will help sustain the property business.
The snags of new property
ould you drive away a rental car without walking around the outside and checking for dents and marks? For sure, you would check your new fridge or dishwasher when it was delivered to your house, to see if there are any scratches or knocks; this is something that most people do without thinking. It is extraordinary that many people take handover of some of the largest investments in their lives, be they new villas or apartments, without a professional check and they accept the condition in which the developer hands them over. Even if you do not intend to live in it, but let it out, if it is not snagged before the letting, there will be scope for a considerable argument when the tenant moves out. Sometimes, serious defects are present, which could cause danger to the occupants, but more often the defects are minor but can be niggling and time consuming to have put right. Usually, the developer is liable for defects for a period of one year from the date of handover. The obligation to repair only extends beyond this under the decennial liability rule, which then only applies to major or structural defects. There have been some horror stories reported in the press, such as the person who was taking a shower and the side wall fell out of the apartment building. There was also a case where a hot water tank was incorrectly fixed and crashed through a bathroom ceiling; luckily no one was
hurt in either case. Many people think they can check the property by themselves and will see anything that is untoward, but this is not the case. You need to obtain a professional inspection for such a large investment and this professional opinion comes in the form of a snagging survey carried out by a Chartered Surveyor, who is a property expert with years of experience, so will know exactly what to look for. The comprehensive snagging survey can be sent to the developer, so they are able to rectify the defects free of charge. It is best to have the survey carried out before handover so that defects can be rectified before occupation. The snagging survey will identify both minor matters such as scuffed paintwork or chipped or marked doors or door frames, but also serious defects like window frames not properly fixed to the wall so they could potentially fall out. The defects also include leaking taps, blocked drains, poor quality workmanship, uneven plaster and damaged or poorly fitted cupboards and kitchen cabinets. In one villa, we found that they had forgotten to fit the air conditioning unit to the maidâ€™s quarters. If the property is sold furnished by the developer the surveyor may
also check that the correct items of furniture have been supplied and that these are in good condition, provided full documentation is supplied. Another major problem is the floor area delivered. There is no standard method of measuring the saleable area of villas and apartments in the UAE and many developers use different standards, meaning that a 2,000 square feet apartment may only have a useable floor area of say 1,400 square feet. Some developers include balconies, passageways, staircases and lift shafts in their calculations of built up area (BUA) for apartments and others include garages and patios in villa BUA calculations. In the case of an apartment I measured recently
using the Gross Internal Area (GIA) method of measurement as defined by the Royal Institution of Chartered Surveyors (RICS), there was a 30 per cent discrepancy between the contracted area and the GIA that I calculated. There is a further problem in that the final sale price is often calculated on the BUA, so the purchaser may have a dispute over the price and the floor area. In the case of apartments, the service charge is calculated on the floor area of each unit, so in some cases there may be scope to overcharge the occupant, if the BUA is incorrect. Often, it is possible to combine a floor area certification survey with a snagging survey for only a small additional cost. This should be undertaken by a Chartered Surveyor, who will understand the different methods of measurement which will be applicable. Even in these difficult economic times, it is worth the cost of having your new property professionally checked, it may save considerable cost and heartache in the future. Adrian Camps FRICS, ACIArb, MEWI, MEI is a Chartered Surveyor, Arbitrator and Independent Expert. He is Managing Director and CEO of Aspect Property Consultants in Dubai.
DUBAI REAL TIMES
By Adrian Camps
Dubai turns to professional mediation to resolve real estate disputes RICS launches training programme for mediators is also truly voluntary, as entering the process does not bind the parties to reach settlement. In most cases, mediation cannot take place unless all the parties agree to enter the process, and will cease if one party leaves the process, which
“Mediation is both Shari’a compliant in its philosophy and well regarded as an established international dispute resolution process,” says Andrew Goodman
they are generally free to do at any time.” A mediated settlement can only come about on the authority of the parties concerned as the mediator has no authority to make a binding determination. If a settlement is reached, the agreed terms will form part of an enforceable contract. Mediation generally provides both client and professional satisfaction in terms of speed, cost, flexibility of outcome and confidentiality.
“The role of the mediator and the confidential nature of mediation negotiations helps parties to focus on and realise their true needs and interests which may be far removed from what a court, an adjudicator or an arbitrator might ordinarily have jurisdiction to order,” adds Goodman. “Any litigation then becomes only a frame of reference, or point of departure from which to formulate a wider agreement.” The success of mediation comes with educating both professionals engaged in dispute processing – lawyers and construction profes-
sionals – and their clients, of both the process and its benefits. Alan England, RICS Director for MENEA, based in Dubai, comments: “In November 2008, the Royal Institution of Chartered Surveyors formalised a relationship with RERA and as part of our support for the establishment of the Dubai Mediation Centre, RICS Dispute Resolution Services has committed to providing high quality accredited mediation training in the Gulf, through our UK-based trainers.” RICS ran an accredited meditation training programme for mediators on December 12-17, (three modules, two days each) at Dubai Knowledge Village. For details of future training sessions, contact: Jhopkins@rics.org or visit www.rics.org/uae
Entering the process does not bind the parties to reach a settlement
If a settlement is reached, the agreed terms will form part of an enforceable contract
DUBAI REAL TIMES
conomic downturns naturally lead to an increase in commercial disputes and a surge in litigation and arbitration, and this has led to increased levels of interest and use of arbitration in the UAE, particularly in the construction sector. Several hundred new property cases were registered in the Appeals Court over the first six months of 2009. A new Dubai Mediation Centre, announced earlier this year, is a positive and proactive response to the situation by real estate regulatory bodies and will help participants settle real estate disputes. In support of this response, RICS (Royal Institution of Chartered Surveyors) has announced a new accredited Mediation Training programme in Dubai, to help meet the increasing demand for mediators in real estate related disputes. According to Andrew Goodman, Director, RICS Accredited Mediator Training, mediation is a voluntary, non-binding and private dispute resolution process in which a trained neutral person – the mediator - helps parties to a dispute, or other impasse between them, try to reach a negotiated settlement for themselves, with or without the assistance of their own professional advisers. “Mediation is both Shari’a compliant in its philosophy and well regarded as an established international dispute resolution process,” says Andrew Goodman. “Mediation
DUBAI REAL TIMES
Dubai Municipality organised a variety of events at its premises to celebrate the 38th UAE National Day last month in an environment filled with feelings of patriotism and a sense of belonging and loyalty. Eng. Hussain Nasser Lootah, Director General of Dubai Municipality, who cut the ceremonial cake to begin the celebrations, said it was only a small part of the large and joyous celebrations in the whole country by both citizens and residents of different nationalities. Celebrations were held in all departments and the Corporate Marketing & Relations Department distributed Arabic sweets, colourful flag, traditional food, colourful cup cakes, and gifts that were specially prepared for the occasion to all employees and customers. The Municipality main building and its external branch centres were decorated and held a variety of events such as traditional food making and a photography exhibition entitled ‘Images of my country’ by employees. The activities also included a stage show by one of the schools, which performed skits and folk dances. There was also a programme on Bedouin life, flag making and best Arabic coffee competitions, gifts to visitors, painting, songs and popular programmes.
The Walk at Jumeirah Beach Residence (JBR) saw Dubai Properties Group (DPG) host a Heritage Village in a three-day gala, showcasing the heritage and culture of the UAE as part of the country’s National Day celebrations. Khalid Al Malik, Group CEO of Dubai Properties Group, said: “Our association with Dubai Tourism Commerce Marketing (DTCM) and Community Development Authority (CDA) offered visitors an overview of the UAE’s rich heritage, even while allowing families and the general public to enjoy the spectacular open air ambience.” The Heritage Village recreated close to the Hilton Hotel featured 10 traditional houses, each offering a kaleidoscope of life in the desert as well as in the more urban areas. Shops for handicrafts, coffee, popular and traditional photography, henna and a special corner for children. Alongside the Heritage Village, the annually acclaimed cake donated by Bab Al Shams hotel of the Jumeirah group beckoned visitors with its attractive depiction of some of Dubai’s most iconic developments.Traditional UAE food made its impact with more than 380 chefs from 38 hotels across Dubai who collectively cooked a traditional Emirati meal.
Abdulla Bin Damithan ,Director, Account Management, Container Terminal, UAE Region, Dr. Haya Ibrahim bin Saifan, Head of Support Services, KHDA and Dirk Van Den Bosch, Chief Commercial Officer UAE Region at the school laboratories opening ceremony. DP World, UAE Region’s commitment to community welfare programmes was reaffirmed when two school laboratories it funded to be revamped and re-equipped were formally opened at Dubai’s Omar Bin Al Khattab Model School.Officials from Dubai’s Knowledge and Human Development Authority (KHDA) and DP World, UAE Region attended the recently held opening ceremony along with the school faculty and students. They later toured the chemistry and physics laboratories that have been completely refurbished and upgraded with the premier port operator’s support. The donation of the labs to Dubai’s secondary schools through KHDA was part of DP World, UAE Region’s community initiatives for 2009. The company had already donated a new biology laboratory to Al Safa School. In 2008, the company revamped, furnished and donated four libraries on Islamic Education, Arabic, Geography and History for Maria School, Dubai.
Rashid Paediatric Therapy Centre (RPTC) has opened its state-of-theart facility for children with special needs in the UAE. The facility was officially inaugurated by His Highness Sheikh Juma Bin Maktoum Bin Juma Al Maktoum, acting Chairman of RPTC along with Micky Jagtiani, Chairman, Landmark Group and Abou Ali Malik Shroff, Managing Director and Chairman Sheffield Real Estate. The newly built Motion & Drama Studio was developed with a vision to enhance the quality of services and therapies provided to children with special needs. It will provide drama, and arts therapy to help special needs children integrate more easily into the larger society. “We are indeed very grateful to Micky Jagtiani and the management and staff of Landmark Group for their generosity and support in helping to fund the construction of this facility. As a gesture of our appreciation to Landmark Group, we have named the facility ‘Landmark Auditorium’ trusting that it will be a landmark symbol of hope for thousands of children with special needs whose lives will be touched,” said Sheikh Juma. In 2007 Landmark Group organised a charity concert - ‘Lahan Al Hayat… Lyrics for Life’, at the Centrepoint Theatre in Mall of the Emirates, to raise awareness and funds towards constructing the auditorium. In addition Sheffield Real Estate sponsored some equipment for the studio.
Dubai Pearl, the world class, mixed-use luxury development, has contributed Dh2.5 million from the auctioned amount of an exquisite two-bedroom Bellagio Residence at Dubai Pearl in support of amFAR at the ‘Cinema Against AIDS Dubai 2009’ gala dinner held at the Dubai International Financial Center (DIFC) last month. Chaired by Her Royal Highness Princess Haya Bint Al Hussein, UN Ambassador for Peace, Chairperson of International Humanitarian City, and wife of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, the event was organised by amfAR for the third consecutive year as part of the Dubai International Film Festival 2009 (DIFF). The event was held in the presence of Her Royal Highness Queen Noor of Jordan and a host of celebrities such as: Matt Dillon, Christina Ricci, Mandy Moore, Mostafa Fahmi, Ragaa El Geddawi, Elham Shahine, Samir Ghanem and many more. Abdul Majeed Ismail Al Fahim, Chairman of Pearl Dubai, said: “AIDS remains a very serious, global social issue, about which most people continue to be poorly informed. We consider it our moral responsibility to further the fight against AIDS by educating the global community and extending support for medical research in this area.” The fortunate buyer of the limited edition Bellagio Residence apartment at Dubai Pearl has acquired a unique residence that combines a vibrant, romantic and charming style with exquisite finishings.
DUBAI REAL TIMES
wasl, the asset management group owned by Dubai Real Estate Corporation (DREC), donated Dh150,000 to the Dubai Centre for Special Needs, reiterating its support to local non-profit organisations and community-related events. Omer Al Haj Al Maydoor, Head of Lands of DREC and wasl, said: “Our contribution reflects our commitment to educational organisations that are critical to assist students with special needs.” With its dedicated staff and excellent amenities, the centre offers the right ambience for providing pre-vocational training and enhanced life-skills through diverse teaching techniques. The spectrum of its educational strategies continue to ensure individuals with special needs are given the appropriate attention they require. Dr. Mahshid Salehi, Director of Dubai Center for Special Needs, said: “Staff members from wasl brought cheer to the students, offering them an opportunity to interact with new members of the community. As an active torchbearer of various community-related activities, wasl has spearheaded key initiatives such as donation to Al Noor Centre for children with Special Needs and awarding sponsorships to 35 undergraduate students at Dubai Women’s College. Its support of the annual Dubai International Holy Quran Awards and the scholarship grant to UAE nationals for pursuing graduate studies at the American University in Dubai (AUD) also fall under its corporate social responsibility agenda.
New high voltage factory for Ducab Official launch of Ducab’s Special Cable Unit (SCU) to mark company’s 30th anniversary
DUBAI REAL TIMES
n November, H.H. Sheikh Hamed bin Zayed Al Nahyan, Chief of the Abu Dhabi Crown Prince’s Court and Chairman of the Higher Corporation of Specialised Economic Zones (ZonesCorp) and H.H. Sheikh Majid bin Mohammed bin Rashid Al Maktoum, Chairman of Dubai Culture and Arts Authority, broke ground for Ducab’s new High Voltage Factory, in a ceremony held at the Ducab head office and factory in Jebel Ali. The ceremony was in honour of Ducab’s 30th anniversary of operations in the UAE and was attended by H.E. Saeed Al Tayer, Managing Director & CEO of DEWA, and H.E. Eng. Ahmed Al Mureikhi, Representative from ADWEA. Ducab managers, business partners and key media representatives were also present at the event. The new factory will be the company’s sixth plant, catering to high-voltage and extra high-voltage projects already planned by ADWEA and DEWA as well as projects around the region. Along with the ground breaking of the new factory, the company also officially launched the Ducab Special Cable Unit (SCU). This new unit significantly expands Ducab’s capacity for specialised cables suitable for oil and gas projects in the region. The Dh500 million Ducab-HV factory is already underway and commercial operations will commence in late 2010. It will manufacture cable systems in the voltage range 66kV (66,000 Volts) to 400kV (400,000 Volts) covering the highest voltage currently used in the GCC. With a total built up area of 22,000m2 on a site plot of 50,000m2 at the Ducab
Ground breaking at Ducab’s High Voltage Factory
Jebel Ali site, the factory will be the first dedicated high voltage facility in the region and will have a manufacturing capability of 30,000 tonnes per year of cable in the range 66kV to 400kV and conductor sizes from 300sqmm to 2500sqmm. Ducab has come a long way in the past 30 years, originally starting from a single factory in Jebel Ali. Today, the company operates five factories across the UAE with over 900 employees. With a manufacturing capacity of 110,000 tonnes annually, Ducab’s market share is about 50 per cent locally, with substantial exports to other GCC countries The late Sheikh Rashid bin Saeed Al Maktoum, former Ruler of Dubai and grandfather of Sheikh Majid, opened Ducab 30 years ago in partnership with the UK company BICC Cables. As the years passed, the company began expanding its
product line and also entered into the cable accessories and components market. By the 1990s, it was achieving sales of over Dh200 million ($54.2m) and by 2008, these had grown to Dh3.2 billion. Ducab was also the first Gulf manufacturing company to obtain ISO 9001:1994 and ISO 14001 Environment Management Standard certifications. Last year, Ducab commissioned a major expansion of their Abu Dhabi facilities with the addition of a new factory, the UAE’s first copper rod mill. The company’s current product line includes the full range of LV and MV power cables; Fire Performance Instrumentation and Control Cables—which include single and multi-core Fire Resistant cables; Low Smoke and Fume Cables; Instrumentation and Pilot cables; and Flexible wires. Ducab’s tailor-made, advanced-
cable solutions have laid the foundation for major projects ranging from world-renowned hotels to hospitals to government utilities. Some of the landmark projects powered by Ducab include the Burj Dubai, Palm Jumeriah, Dubai Metro, Gasco Ruwais, Delhi Metro, Lulu Island Bahrain, and Ras Laffan Qatar, among others.
Completion of seven parks Engineer Hussain Nasser Lootah, Director General of Dubai Municipality, recently announced the completion of seven public parks in various areas of the Emirate of Dubai. “They include four residential parks in Al Qusais-2, Abu Hail, Garhoud-2 and the Hill Park in Hatta and three pond parks in Al Quoz-2, Al
as well as school trips. The park also includes a jogging track that surrounds the park at a length of three kilometres. The second Pond Park is located in Al Quoz-2 with a total area of about 5.27 hectares of land allocated for the pond, while 5.5 hectares was allocated for the park, with excellent facilities manifested by taking into account the requirements of people with special needs and safety elements that are the basics of park design standards by the General Projects Department. Lootah said the park that includes a 2-kilometre long jogging track around the perimeter of the pond with a width of 2.5 metres and can be used by all segments of the society including school students for competitions or training. He said that what distinguishes this track is the direct view overlooking the pond, which was provided with fountains with elements of lighting at night. In addition, there are provisions for lighting the park to have attractive night view. The sports area includes a football field, a grass court for basketball and a beach volleyball court. Al Nahda-2 is where the third pond park is located. It has separate sports venues for adults with fencing and a side entrance of its own. The park includes a 1.35 kilometre jogging track and a 1.4 kilometre bicycle track. There is an elevated picnic area for families overlooking the pond.
ing industry has been achieving excellent long-term growth prospects and is expected to further grow between five and eight cent in 2010. Leo Sterling further noted that this type of business has become a favoured gateway among entrepreneurs as recent findings from the United States Chamber of Commerce have revealed that franchised businesses have a 97 per cent success rate within five years of opening, while non-franchised businesses have a success rate of only 48 per cent in their first six years. This agreement will provide access to over 1,000 listed commercial and residential properties as well as a full range of business support facilities, including extensive training, continuous supervision and management support, and local and international advertising that is bundled with up to 92 per cent discount. Laura Martorano, CEO and Founder, Leo Sterling said: “We will provide the perfect headstart for the
New franchise programme offered
Yasser Abdulrahman Al Raee
growing number of individuals who want to venture into the real estate business and take advantage of the long-term business prospects and new exciting possibilities in the UAE property market. Aside from having access to our proven products and methods, franchisees will also benefit from a complete range of support services which are all designed to significantly increase chances of business success without the associated risks.” A key feature that is expected to help generate interest is its premium array of value-added services such as property management, interior design, finance advisory legal con-
has pushed up prices, a trend that could continue if recent predictions of a villa shortage in 2010 play out – a stark contrast to the anticipated glut of apartments in the coming year. “The fall in the price of villas seems to have bottomed out, and we are starting to see prices rise again. Since July, prices for villas in Victory Heights have risen by about 20 per cent , and we expect to see prices stay around the same figure for a while,” said Yasser Abdulrahman Al Raee General Manager at Victory Heights. In late November, Victory Heights handed over the keys of its 300th villa, signalling a significant mile-
Franchised businesses achieve 97 per cent success rate compared with 48 per cent among non-franchised enterprises Driven by strong demand from its network of close business partners, Leo Sterling, UAE’s property portfolio managers, has recently launched a new franchise programme, offering a cost-effective start-up to individuals in the Middle East, UK and Europe who are looking to operate their own business. The programme will be of particular interest in the UAE, where a Dh110 billion franchis-
sultancy and a newly opened London Office which acts as a platform for the European markets, remain superior to those from traditional agencies. The company does not require a commission split and maintains no hidden charges. In addition, it provides franchisees with in-house legal team assistance, in-house marketing and brand development support, local and international PR support, and a dedicated website and email ID.
Some villa prices rise by 20 per cent Victory Heights saw villa prices surge in Q3 after a 50 per cent fall in 2009, a surge in price of around 20 per cent in the third quarter of the year, after falling 50 per cent in the first half of the year as a result of the global economic recession, it was announced recently. Growing demand for family homes in Dubai by current residents
DUBAI REAL TIMES
Qusais-3 and Al Nahda,” he stated. Lootah said that these are part of the Municipality’s efforts aimed at providing residents with green spaces for leisure activities. The plan is to make at least eight per cent of the city green, and to undertake projects which will help the environment, making for a healthy living atmosphere. Lootah said four parks have been completed, among them is Abu Hail Residential Park, located in Hor Al Anz East, which was built at a cost of Dh7.88 million. “The park includes sports area with soccer field, basketball, volleyball and tennis courts, shaded seating areas , jogging and cycling tracks, car parking, green spaces with seasonal flowers and trees, service buildings for gymnasium and cafeteria, outer wall, sub and main entrances.” Lootah said that Al Qusais-2 Park, which was built at a cost of Dhs7.845 million, contains two areas dedicated to games for children aged between two and 12 years, sports fields for volleyball, basketball, tennis, shaded seating areas, wooden umbrellas and a jogging track. He pointed out that the Garhoud-3 Park was built at a cost of Dh6.75 million. The central courtyard of the park is surrounded by shaded seating areas. Two areas have been dedicated for games for children. There are sports fields for basketball and tennis earmarked for different ages as well as a hill park, central plaza, barbecue area, courts for handball, volleyball, basketball, jogging and walking track. As for the pond parks, Lootah said that these are a natural outlet for all and a safe place for children. He pointed out that three ponds have been built. One is at Al Qusais-3 Pond Park, which was completed within about 17 hectares, with allocation of six hectares for the establishment of the park. People with special needs were taken into account while designing as there is a wall protection for children installed on the perimeter of the lake. There is a three metre high small hill in the park with shaded seats descending towards the lake to take advantage of overlooking the beautiful area, which can be used for special events
stone in the delivery of the 961-unit development, which is part of Dubai Sports City, and surrounds the award-winning Els Club golf course. “Despite the recession, families are still looking to find spacious homes with quality finishing in developments that have a community spirit – and that’s what we offer at Victory Heights. Families are moving here from other developments because they like being away from the bustle of the city, and just a stone’s throw from the all the sporting facilities of Dubai Sports City,” Al Raee added. The potential shortage of villas on offer in Dubai in the next few years was highlighted by Landmark Properties CEO, Charles Neil who explained that the number of units coming online in 2010 will jump to 50,000 – of which 20 per cent will be villas, and the rest apartments. In 2011 the number of new villas will drop to five per cent, and to three per cent in 2012. Victory Heights’ villas are built in three different styles; authentic Spanish Andalusian, bold Mediterranean, and classic European styles, and many have views of the Els’ Club course which features gently rolling fairways, lakes, and grass swales. The developer holds regular community events, such as BBQs, which are part of its commitment to fostering a strong community spirit.
DUBAI REAL TIMES
American Hardwood gains seal of approval from leading designers, architects
Gold sponsor AHEC supports presence of two renowned keynote speakers at architectural congress American Hardwood earned overwhelming signs of approval and confidence from the region’s top interior designers and architects during the recently held ‘ifi09 Dubai’, the 24th General Assembly of the ‘International Federation of Interior Designers and Architects’ and the ‘World Interior Design Congress 2009’. Playing a significant role in the prominent display of hardwoods at the event, the American Hardwood
Export Council (AHEC) supported the presence of two renowned keynote speakers, Interior Architect Patrick Fong from Hong Kong and British Furniture Designer/Maker Luke Hughes. Both experts have worked with American hardwoods and are familiar with the benefits and advantages gained from using the material for their creations. A prominent exhibition at the AHEC stand greeted delegates during the event, including large wooden scale models of David Adjaye’s American tulipwood pavilion ‘Sclera’, which was built for the London Design Festival; and Philip Koomen’s ‘Wave and Splash’ tulipwood bench from the Hay Literary Festival. These were supplemented with graphic panels explaining their architectural credentials, and giving details of the US hardwood materials used in the illustrated projects. AHEC also distributed its newly launched ‘Guide to Species’ and ‘Hardwood References’ brochures, along with a pamphlet of the environmental facts about American hardwoods. Luke Hughes held a one-day furniture design workshop entitled ‘Furniture, A Master Class’, which appealed to the young designers who attended the congress. Luke drew particular attention to the capacity of wood to adapt to changes in humidity and not temperature, which makes kiln dried American hardwood ideal for designers in the Middle East. These sustainable species, which are ideal for making furniture, joinery, flooring and cabinetry, include red and white oak, ash, cherry, maple, tulipwood and walnut.
International steel giant moves to AG Tower Dubai Multi Commodities Centre Authority (DMCCA) welcomed Macsteel International, a subsidiary of global steel trading, distribution and shipping giant Macsteel Holdings Group, who began operations from AG Tower as a DMCC-registered company, following awarding of its licence in autumn. Macsteel International will use the DMCCA’s
DMCC and MacSteel officials
Jumeirah Lakes Towers (JLT) free zone in Dubai as its Middle East base to further develop and establish new regional business opportunities. Macsteel International is a 50:50 joint venture between Macsteel Holdings and Arcelor Mittal South Africa. With a turnover of over $10 billion and more than 140 offices and sites globally, Macsteel Holdings Group is among the largest steel trading distribution and shipping (through its affiliate MUR Shipping) companies worldwide. “The steel industry in the Middle East has witnessed significant growth in recent years, and approximately 50 million tonnes of steel is now traded and consumed in the region annually,” said Ahmed bin Sulayem, Executive Chairman, DMCC. “Driven by the region’s infrastructure projects, the GCC’s annual per capita steel consumption is, at 380 kgs, among the highest in the world. Dubai alone annually consumes in excess of 500kg of steel per capita, against the global average of 182kg.” “Dubai imports nearly six million tones of steel per annum and stands at the crossroads of the world’s two dominant long product steel trade flows. Given such abundant business opportunities and excellent infrastructure, DMCC’s free-zone facilities offer an extremely attractive value proposition for steel and base metal companies to establish their regional headquarters here,” he
added. Last year, DMCC established the DMCC Steel Club, a dedicated networking association to support of the UAE steel industry by identifying business opportunities and facilitating the development of global best practices. Purpose-built to cater to the specific needs of the commodities industry, DMCC’s JLT free zone accommodates hi-tech security systems and industry-specific infrastructure for its occupants. DMCC offers resident companies highly attractive benefits, including a 50-year guaranteed tax holiday, 100 per cent business ownership, and full ownership of business premises under a free zone status. It is currently home to over 1,800 licensed companies, ranging from commodities to legal, information technology, management consultancy, marketing, medical, tourism and architecture. In addition to being a commodities and energy hub in the region,
Burj Dubai Classic Car Show It is a celebration of timeless style: One of the world’s most fascinating architectural developments meets the much-cherished world of motorcars. The Burj Dubai Classic Car Show is back: the second edition in February 2010 has been extended to four days, from February 18 to 21, owing
to public demand and stronger participation from classic car lovers in the region. Preparations are ongoing for the show, which has already generated strong buzz among classic car lovers. In its debut in February this year, the Burj Dubai Classic Car Show held at Emaar Boulevard, brought together thousands of spectators to witness hundreds of classic car collectors from the region showcasing their prized possessions. Also featuring classic car parades and a competition, it was the first of its kind experience for Dubai, and a symbolic representation of how the timeless architectural splendour of Downtown Burj Dubai served the befitting backdrop for classic cars that stand the test of time in design elegance. The excitement generated will continue in the next edition, as Emaar prepares to create a more lavish spectacle of classic cars in the second edition with more participating cars, parades, competitions and attractive lifestyle events that will appeal to all sections of visitors. Visitors have free access to the show and can further build on a lively dayout with the various lifestyle features in Downtown Burj Dubai. Last year’s participating classic cars ranged from some turn of the century models to several from the early 1970s. It provided a glimpse on the evolution of motoring and high-
lighting humanity’s passion for cars; a distinctive insight into how modern cars evolved, the creativity associated and how even after decades, they continue to excite and enthrall onlookers. Emaar organises the event with the support of the Automobile & Touring Club of the United Arab Emirates (ATCUAE) - a member of the ‘Fédération Internationale des Véhicules Anciens’ (FIVA), the worldwide authority for historic vehicles. Classic car owners, interested in participating in the event, can email to HYPERLINK “mailto:bdccs@emaar. ae” email@example.com for more details and registrations.
Hamptons provides vocational training
Hamptons provides vocational training
Covent Garden Market Dubai is a unique retail and entertainment experience that offers something for everyone whether they are entertainers, artisans, residents and/or tourists. It is reminiscent of European street markets and in its second consecutive year, offers a vibrant ambience for shopping, dining or simply relaxing with friends and family. Open every Thursday to Saturday, the Covent Garden Market Dubai will run until May 2010 at The Walk, Jumeirah Beach Residence (in front of the Rimal Sector opposite the open air car parking between the Hilton Jumeirah Hotel and Sheraton Hotel)
Hamptons International, the global property services company regionally headquartered in Dubai, recently offered an intensive vocational training programme for university students in the UAE. The two- to four-week programme, covering finance, human resources and marketing, was open for UAE nationals and aimed at strengthening the skill-sets of students. Hamptons also offers three-month part-time positions for the students thus giving them a headstart to their career. A spokesperson for Hamptons International management said: “Hamptons has over 140 years of
global experience in property services. Through our vocational training programme for UAE national students, we aimed at sharing our knowledge base and preparing them for promising careers.” Five students from various universities in the UAE attended the programme, with experts from Hamptons offering insightful lectures and presentations as well as practical training. The work experience programme concluded with a Graduation Day held at the company’s office in Emaar Business Park. Hamptons International has an extensive portfolio of leading property projects in the UAE and across a number of international markets. Acquired by Emaar in 2006, Hamptons has over 85 offices worldwide, providing customers with a wealth of property opportunities and access to a diverse property portfolio. The company offers the entire spectrum of realty services including residential and commercial sales, leasing and property management, international sales, valuations, research studies and mortgage advisory.
DUBAI REAL TIMES
Mohammed Al Abbar and Mohammed Ben Sulayem at the Burj Dubai Classic Car Show 2009
Asphalt plants and road building equipment Long-term commitment to region pays off as Italian manufacturer celebrates 40 years in the Middle East
s the construction industry shows signs of recovery, Italian manufacturing giant Marini S.p.A, is forecasting $20 million sales in the Middle East in 2010 and $29 million in 2011. The company’s sales forecast is due to an increase in regional demand of its Ultimap 2700 200 t/h asphalt plant, which can provide an advanced dryer and dust collection system in any environment and has become the company’s flagship product in the region. Alessandro Camerini, Area Sales Manager, Middle East, said: “Marini has been present in the Middle East for almost 40 years. It is one of our most important markets, representing 15 per cent of our global sales, and we expect to further increase our market presence in the next two years.”
Marini S.p.A, part of the French Fayat Group is a leading manufacturer of asphalt plants and road building equipment, and offers a wide range of products, including transportable and mobile batch mix asphalt plants, plants for recycling of asphalt paving and plants for the production of cement mixes. The company opened its Fayat Middle East office in Dubai last year, enabling the company to provide plant erection with local technicians, reducing costs and contributing to the local economy. The Dubai office also enables the company to offer a more efficient after sales service and faster delivery of spare parts. It is also planning to launch a range of new products in the near future.
Demand for self-consolidating Online payment to Palm Utilities concrete to rise
DUBAI REAL TIMES
International Conference on Advances in Concrete Technology in the Middle East discussed developments in high-performance material
The 2nd International Conference on Advances in Concrete Technology in the Middle East highlighted advances in Self-Consolidating Concrete (SCC) and the importance of the material in sustaining the Gulf construction sector’s projected 3.5 per cent annual growth through the next five years. “On the whole, the impact of the global economic slowdown on the Middle East’s construction sector has been limited, and so there is a need to explore and enhance materials that can support the industry’s growth. The Gulf represents the Middle East’s top construction market, and almost 70 per cent of registered projects in the Gulf alone are still under construction. SCC can help boost the speed and quality of completion of these projects. The conference was an excellent platform to learn more about the developments, best practices and trends in this and other concrete technologies,” said Rabih el Fakih, Conference Secretary. Introduced in the 1980s, Self-Consolidating Concrete (SCC), also known as Self-Compacting Concrete, is a concrete mix that can be poured by its own weight with minimal or no vibration. Its use has grown significantly because of its ability to support flow without compromising durability, cohesiveness or compressive strength. SCC allows contractors to optimise manpower, reduce noise levels and establish a safer working environment. The conference featured papers on material selection and mix design; production and quality control; fibre-reinforced SCC; economic and environmental benefits; workability and rheology; test methods and processing; structural performance and design; experience and case studies; plus specifications. The conference also featured a full-scale demonstration where self-consolidating Concrete was cast alongside Conventional Concrete and Flowable Concrete in order to highlight its characteristics and benefits. The conference was supported by 18 key sponsors.
Dubai Trade, the innovative online facilitator of Dubai World, announced partnership with Palm Utilities (PU), leading utility solutions provider, on its integrated Rosoom services. An agreement signed by Mahmood Al Bastaki, Director Dubai Trade, and Yousuf Kazim, Chief Executive Officer, Palm Utilities, enables PU clients comprehensive online payment services available on the Rosoom platform. The payments can be made through direct debit, e-dirham, and credit cards. This centralised e-payment gateway provides a wide range of services for customers to make online payment transactions with leading commercial establishments such as DP World, Economic Zones World, Dubai Multi Commodities Centre, Leisure Corp and now Palm Utilities. Dubai Trade’s innovative concepts have grown to become a powerful trade mover in Dubai. Constant upgrading keeps its services at pace with the changes in technology. Palm Utilities, through Palm Water and Palm District Cooling, provides services to many of Dubai’s landmark developments including Palm Jumeirah Trunk & Crescent, JAFZA, Jumeirah Islands, Jumeirah Lake Towers, Jumeirah Village, Discovery Gardens, Dubai Multi Commodities Centre and Ibn Battuta Shopping Mall. The company provides environment friendly water solutions for cooling requirements as well as building and operating strategically placed district cooling plant and networks.
DUBAI REAL TIMES
The evolution of property registration in Dubai A review of the origins of property registration in Dubai; its present status; and its prospects for the future By Shahram Safai
DUBAI REAL TIMES
n the 1960s a land settlement committee was commissioned in accordance with the direction of His Highness Sheikh Rashid Al Maktoum in order to register property in Dubai. The committee was empowered with full authority to examine, check and survey properties in Dubai in order to prepare final maps of plot ownership. The committee followed a similar land settlement system to that used in Sudan at that time. The committee would follow a standard procedure with respect to the registration of property: it would accept an application for registration submitted to it; it would issue a receipt to the applicant; the committee, along with the owner and his neighbours, would then visit the land to agree boundaries; thereafter a survey and property map were prepared by the committee and a file opened. The file also noted how the land was acquired by the owner i.e. grant, purchase, inheritance etc. This committee was the precursor to, and laid the foundation for, the later formation of the Land Department. In 2006, many years after the formation of the Land Department, His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the United Arab Emirates and Ruler of Dubai, signed the Dubai Real Property Registration Law (Number 7 of 2006) (the “Property Law”). Certain articles in such Property Law enunciate the general legal principles related to property registration. Article 6 of the Property Law states that “the Dubai Land Depart-
ment shall solely, to the exclusion of others, be authorised to register Real Property Rights and the long term lease contracts” including establishing rules of survey, inspection and issuance of maps relating to the Real Property Units. This Article confirms the primary role of the Land Department as had been contemplated in the 1960s. Article 7 of the Property Law states that “A Real Property Register shall be established at the Department. All Real Property Rights and any amendments thereon shall be registered in the Register, which shall have absolute power of evidence against all parties. No objections against the data of the Register may be made other than on the grounds of fraud or forgery.” This basic principle is the underlying legal foundation of the registra-
tion system at the Land Department. The Article confirms that registration of ownership of property at the Land Department is conclusive evidence of ownership subject to fraud or forgery. In other words, except in the case of fraud or forgery, a title registered in the register is indefeasible (i.e. cannot be defeated) and, on the face of it, the registration record of the Dubai Land Department is final in proving ownership of property rights by a certain person. This allows property transactions to be conducted by the public with legal certainty therefore facilitating commerce. Moreover, Article 9 reinforces this principle by stating that “all dispositions which may create, transfer, vary or terminate a Real Property Right, and all final judgments confirming any such dispositions shall be entered into the Real Property Register. Such dispositions shall not be valid unless they are registered in the Real Property Register.” As a result, any agreement or instrument purporting to transfer land is invalid unless in compliance with the Property Law (which requires registration). This means that, certain so-called ‘MOU’ type real estate transactions which have been entered into in Dubai with the purpose of avoiding or materially delaying registration of a property sale, would arguably be invalid based
on the Property Law. The Emirate of Dubai is fortunate to have a modern property registration system under the auspices of the Land Department. The future holds many opportunities which, if capitalised upon, can assist in increasing sale/purchase transactions as well as facilitating commerce by: • providing the ability to be able to freely search the ownership of, the boundaries of, and the registered restrictions against a property. Such an opportunity may be maximized by allowing for electronic searching via the internet. • providing the ability to register multiple mortgages against a property. Presently, the common practice is to allow only one mortgage to be registered against a property even though multiple mortgage registration is permitted under the Pledge Law. • being able to pledge property to a private party (not a financial institution) and register such pledge in the register. This is a method of private financing that is used in some other jurisdictions by treating property as just another asset that may be pledged. • requiring purchasers to obtain title insurance which will insure against fraud, forgery or defects in title. Alternatively, the Land Department may create a reserve fund to be funded partially by fees which would serve as an insurance pool to address such issues. Shahram Safai is a lawyer, a professional engineer and a partner at the law firm of Afridi & Angell in Dubai.
With over 35 years of unrivalled experience in the United Arab Emirates Afridi & Angell is a premier, high quality law firm with a diversified regional and international practice based on conventional and Islamic banking and financial services, infrastructure and project finance, private equity, maritime and transport law, insurance, litigation support and arbitration, capital markets, real estate and construction.
2 Legal Business February 2009
DUBAI REAL ESTATE LAWS
Law No. (3) of 2006
We, Mohammed Bin Rashid Al-Maktoum, Ruler of Dubai,
Areas of properties that can be owned by Non-UAE Nationals Upon reviewing of Law No. (7) of 2006 concerning real property registration in the Emirate of Dubai Have issued the following regulation:
The Non-UAE Nationals may be granted usufruct right or leasehold right over a real property for a period not exceeding 99 years in Nad Al Shiba plot no. (224) pursuant to site plan enclosed with this regulation signed by the Department This regulation shall be published in the Official Gazette and shall come in force as of the date of its publication
(Signed) Mohammed bin Rashid Al Maktoum Ruler of Dubai
This regulation shall be called the “regulation no. (3) of 2006 concerning identifying areas of properties that can be owned by Non-UAE Nationals in the Emirate of Dubai”
Unless the context requires otherwise, the following terms and expressions in this regulation shall have the meanings as shown against them respectively: “The Ruler” means H.H. The Ruler of the Emirate of Dubai “The Department” means The Land Department “The Real Property” means anything immovable fixed within its boundaries which cannot be moved without damaging or changing its features.
DUBAI REAL TIMES
The Non-UAE Nationals may be granted a freehold property, or usufruct right, or leasehold right over a real property for a period not exceeding 99 years, in plot/s which mentioned below, pursuant to site plans issued by the Department and enclosed with this regulation: Umm Hurair Second Plot No. (013) Al Barsha West Second, Plot No. (002) Al Barsha West Third, Plot No. (002) Emirates Hills First, Plots No. (004) & (814) Emirates Hills Second, Plots No. (001) & (049) Emirates Hills Third, Plot No. (001) Jebel Ali Plots No. (051), (074), (081), (082), (083), (084), (142), (143) & (391) Al Jadaf Plots No. (003), (007) & (008) World Islands Plot No. (001) Ras Al Khor Plot No. (165) Al Rawiya Plots No. (063) & (065) Sheikh Zayed Road Plots No. (118) & (147) Al Sufouh First Plot No. (069) Al Sufouh Second Plot No. (005) Al Quoz Third Plots No. (005) & (006) Al Quoz Industrial Second Plots No. (010) & (030) Al Quoz Industrial Third Plot No. (028) Mirdif Plots No. (143) & (144) Dubai Marina Plots No. (007), (014), (015) & (033)
Land Registration in the Emirate of Dubai We, Mohammed bin Rashid Al Maktoum, Ruler of Dubai Having considered the Federal Law No. 5/1985 promulgating the Civil Transactions Law and its amendments; the Federal Law No 11/1992 promulgating the Civil Procedure Law and its amendments; the Local Law No 7/1997 concerning Land Registration Fees; and the Local Decree concerning the Formation of Land Affairs Committee of the year 1960; do hereby promulgate the following Law:
Chapter One Title and Definitions
This Law shall be cited as “The Land Registration Law of the Emirate of Dubai (No 7/2006)”.
In this Law, the following words and terms shall have the respective meanings assigned to each of them, unless the context requires otherwise: The United Arab Emirates. The Emirate of Dubai. The Government of Dubai including any of its Departments, Authorities or Public Corporations. His Highness The Ruler of the Emirate of Dubai. The Department of Lands and Properties. The Head of the Department. The Director General of the Department. Anything of a permanently fixed nature which cannot be removed without
The UAE: The Emirate: The Government: The Ruler: The Department: The Head: The Director: Land:
Chapter Two Scope of Application and Right of Ownership
Chapter Four Jurisdiction of the Department
The Department shall have exclusive jurisdiction to register the rights over Land and the leaseholds mentioned in Article 4 of this Law. For this purpose, the Department may do any of the following: (1) determine the areas to be surveyed or re-surveyed and certify the maps drawn therefor (2) prescribe rules in relation to surveying and inspection, as well as in relation to issuance of maps relating to Land Units; (3) prepare model forms of contract relating to real estate transactions; (4) prescribe rules concerning organizing, archiving and destruction of documents; (5) prescribe rules in relation to using computers in storing and recordin data; (6) lay down rules in relation to regulating and keeping a register of real estate brokers; (7) prescribe rules in relation to evaluating Land; (8) lay down rules in relation to voluntary sales of Land by public auction and supervision of such sales; (9) determine the fees payable for services rendered by the Department; And (10) establish branches of the Department as the Director may deem appropriate.
The Land Register
A Land Register shall be maintained in the Department to record all rights over Land and any changes that might take place in respect of them. This Register shall be conclusive evidence against all and everyone unless it is proved to be the result of fraud or forgery.
This Law shall apply to Land situated in the Emirate. The right to own Land in the Emirate shall be restricted to citizens of the United Arab Emirates, citizens of the Cooperation Council for the Arab States of the Gulf, the companies totally owned by any of the foregoing, and public joint stock companies. Foreign Persons may, subject to the approval of the Ruler, be granted in certain areas the following rights: (a) The right to acquire absolute ownership of Land without restrictions as to time. (b) The right to acquire usufruct or leasehold of Land for a period not exceeding 99 years.
Chapter Three General Provisions
The originals of documents and judicial decisions in pursuance of which registration is made shall be kept in the Department, and shall not be moved outside its premises. Interested parties, judicial authorities or experts appointed by them, as well as competent committees may have access to such originals and obtain a certified copy thereof in accordance with the provisions of this Law.
Subject to the provisions of Article (7) of this Law, all electronic records shall have the same weight of evidence as that of their hard copy written originals.
Chapter Six Registration
All transactions that create, transfer, change or cancel rights over Land shall be recorded in the Land Register and final judgments confirming those transactions shall also be likewise registered. No transaction shall have any effect unless registered in the Land Register.
Any undertaking to transfer a Right over Land shall be limited to an obligation to pay compensation if the obligor is in breach of his undertaking, whether the undertaking contains a provision to pay compensation or not.
DUBAI REAL TIMES
damaging or altering its form.1 Rights over Land: Any principal or accessory rights over Land. Land Register: A collection of records kept by the Department in written or electronic form in an electronic register, detailing the description of the registered Land, its ocation and the rights over it. Land Unit: Any plot of Land and all that is located thereon such as buildings, plants or otherwise, situated in one Land Area: Without being separated from its other parts by any public or private property and without any part of it having a right or an encum brance which its other parts do not have. Land Area: A group of land units demarcated by principal roads or fixed and clear signs with an accredited name and a distinctive number in accordance with the practice of the Department. Person: A natural or a legal person. 1 The original Arabic word is “aqar” which literally means immovable, the equivalent of French immeuble. The underlying concept of “landed property” may also be expressed by the term “real estate”.
If the estate of a deceased contains Rights over Land then the certificate of inheritance shall be registered in the Land Register and disposals by any heir of any of these Rights shall not be effective or recognized against third parties unless registered in the Land Register.
The Department may for the purpose of settlement entertain applications for registration submitted by persons in possession of Land that is not registered in their names.
Chapter Seven Alterations or Corrections of Records in the Register of Land
The Department may, on the application of an interested party or on its own initiative with notification to those concerned, correct clerical errors in the records of the Land Register.
In co ordination with the relevant authorities, the Department shall update its records of Land Units and of what is located thereon such as buildings, plants or otherwise.
Chapter Eight The Maps
Article (15) (1) For the purpose of the registration of Land Units and Land Areas, the following maps shall be relied upon: (a) typographic master map; (b) map of Land Unit; and (c) map of Land Area. (2) Each Land Area shall have its own separate map indicating the Land Units located on it and the numbers thereof. (3) Each Land Unit shall have its own separate map indicating its site, boundaries, width and length, area, its features, constructions located on it and the numbers given for its neigh buring units.
Chapter Nine Dividing and Merging
DUBAI REAL TIMES
If the dominant Land Unit is divided up, the right of easement shall remain in existence in favour of each part of it, provided that that does not increase the burden to the servient Land Unit. However, if the right benefits only some of such parts, the owner of the servient Land Unit may apply to the Department for the termination of the right in respect of the other parts.
If the servient Land Unit is divided up, the right of easement shall remain in existence over each part of it. However, if the right is not in fact used over some of such parts, and it is not possible to use it over those parts, the owner of each part thereof may apply to the Department, in accordance with the provisions of this Law, for the termination of the right in
respect of his part.
Easement rights cease to exist by the acquisition of the dominant and servient Land Units by the same owner.
If a Land Unit which is encumbered by an accessory Right over Land is divided into two or more Land Units, then each such new Land Unit will be encumbered by the whole accessory Right over Land. The new owners may agree with the beneficiary of the accessory Right over Land for the division of it in such way so that each new Land Unit will be encumbered by only part of it, to be determined by mutual consent.
If two Land Units merge and one of them is encumbered by an accessory Right over Land while the other is not, then the accessory Right over Land shall extend on the whole of the new Land Unit without the approval of the merger by the beneficiary of the accessory Right over Land. However, if each of the two Land Units is encumbered by an independent accessory Right over Land, then the beneficiary of each such accessory Right over Land must approve the merger.
Any alteration in the Land Unit by dividing or merging shall be registered in the Land Register.
Chapter Ten Ownership Documents
The Department shall issue documents relating to Rights over Land on the basis of the actual records of the Land Register.
Without prejudice to the provisions of any other law, apartment buildings and multi-storey buildings shall be treated as a single Land Unit and shall have one record in the Land Register to be supplemented by records stating the names of the owners of the apartments, storeys and common parts.
(1) Ownership documents mentioned in Article (22) of this Law are conclusive evidence of the Rights over Land contained therein. (2) In the Land Unit record shall be set out any conditions, promises or restrictions concerning Rights over Land and other obligations.
Chapter Eleven Final Provisions
Provisions of the Federal Civil Transactions Law No. 5/1985 and its amendments shall apply to all matters not provided for by this Law.
(1) Any agreement or transaction made contrary to the
The Competent Licensing Governmental and Semi Governmental Authorities
Anything immovable fixed within its boundaries which cannot be moved without damaging or changing its features.
The Electronic or Documentary Register of the Real Estate Brokers
The list of the certified Brokers from Class (A) prepared by the Committee
It also means (bidder), the person who carrieson the Brokerage activities as per the provisions of this by- law.
A contract by which the Broker undertakes to another person to lookfor a second party to enter into acertain contract through mediation in the contracting negotiations in consideration of a fee.
The natural or legal person.
Ruler of Dubai
Law No. (85)/of 2006
A person may not carry on the Brokerage activity in the Emirate unless he is licensed by the competent authorities and registered in the Registry.
(Signed) Mohammed bin Rashid Al Maktoum
Regulation of Real Estate Brokers’ Register After perusal of Law No. (7)/ of 2006 Regarding Real Estate Register in the Emirate of Dubai, pursuant to Articles (6) paragraph (6), and (28) of the said law and according to the proposal by the Department’s General Director, We issued the following by- law:
Chapter 1 Definitions & General Provisions First: Definitions
This by- law is called (by- Law No. (85) of 2006 Regarding the Regulation of Real Estate Brokers’ Register in the Emirate of Dubai)
The words and phrases contained in this By- Law shall have the meanings shown against each of them unless the context requires otherwise: Country: Emirate:
United Arab Emirates
Emirate of Dubai
Lands & Property Department
Chairman of the Department
Department’s General Director
Permanent Committee of the Real Estate Brokerage
The Competent Arbitration Council to consider Brokers’ disputes.
Division of the Real Estate Brokerage in the
Article (3) Article (4)
A record to register the Brokers, who are licensed to carry on the Brokerage activity in the Emirate, shall be established and every change or amendment made on this information shall be recorded therein.
Article (5) The Brokers shall be from two classes: Class (A): The people of expertise who are registered in the list, unlicensed by the competent authorities and are exempted from the registration conditions. Class (B): The people who carry on the Brokerage activity under a license issued by the competent authorities.
Chapter 2 Conditions of Registration in the Brokers’ Register
Subject to what was stated in Article (5-A) the people from Class (B) who wish to carry on the Brokerage activity in the Emirate shall submit an application on the form to be registered in the Registry. The application shall include the following documents: A valid trade license issued by the competent authorities z z A membership certificate in Dubai Chamber of Commerce & Industry A copy of the license applicant’s/applicants’ passport z with regard to the sole proprietorships or companies An identical copy of the ownership certificate of the z Brokerage shop or its lease contract A Certificate of Good Conduct for the establishment’s z
DUBAI REAL TIMES
provisions of this Law shall be null and void, as shall also be null and void any agreement or disposal made with the intention to contravene the provisions of this Law. (2) The nullity of such agreement or disposal may be invoked before the Court by every Person having an interest, as well as by the Department, or the Public Prosecution, and such nullity may also be ordered by the Court on its own initiative. The Decree dated 6 November 1977 concerning Civil and Criminal Cases in Respect of Transactions Relating to Disposals of Lands in the Emirate of Dubai shall be repealed. Article (28) The Head of the Department shall issue all the necessary regulations, decisions, orders and instructions for the implementation of the provisions of this Law. Article (29) This Law shall be published in the Official Gazette and come into force as of the date of its publicatio
owner and the senior manager or senior managers of the company None of the company’s Directors or the partners authorized to run the company shall be from those who have previously declared bankruptcy or were convicted with a crime violating honor or trust Obtaining certificates in courses specialized in the real estate field from educational institutions accredited by the Department Passing the Brokerage profession test prepared by the Department
The Broker must prove in his special register all the transactions made by him and keep the relevant documents and papers. He shall also submit an identical copy of the same to any of the contracting parties who asks for it. In case of selling by map or form, he must keep the map or form until the transaction is completed.
The Broker shall submit all the information, data and statistics related to the Brokerage activity which are required by the Department.
The Broker must inform his client with all the details of negotiations, stages of mediation he is conducting and any information that is considered necessary to enable him to take the decision to enter into an agreement with the other contracting party. The Broker must also inform the other contracting party with all the substantial issues that are related to the subject of agreement and which are necessary in order be fully aware of it.
The Department shall present the registration application to the Committee within 7 business days from the date of submitting the application or completing the documents and information required by the Department, as the case may be.
The Committee shall have the right to approve the registration or reject the same. The issued decision in this regard shall be informed to the applicant. The decision to reject the registration shall be justified.
If the Committee rejects an application of registration, updating or cancellation, the concerned party shall file a grievance against the decision of rejection with the Director, within 7 days of being informed of the decision. The Director’s decision in this regard shall be final.
The Department shall issue a Broker card bearing his name and address, in addition to his registration No.. The Broker shall enclose his name with his registration No. in the Registry in all the correspondence and reports issued by him.
DUBAI REAL TIMES
The Department shall examine the application. Within seven days from submitting the application, the Department shall request the applicant in writing to complete the documents or information it deems necessary. The Department shall take all the procedures to verify that the registration application, updating or cancelling the requirements of the by- law provisions and decisions issued in accordance therewith, are fulfilled.
according to the Code of Ethical Conduct prepared by the Committee in consultation with Brokers with expertise and opinion.
Every Broker registered in the Registry shall come to the Department for annual renewal of his registration in the Registry. The renewal application shall be submitted to the Department on the form assigned for this, at least (30) days prior to the expiry date of the registration certificate. The Department shall renew the Broker’s registration in the Registry after verifying the availability of the renewal conditions.
Chapter 3 Broker’s Obligations
All registered Brokers must comply with the profession ethics
The Broker shall not mediate to enter a transaction in violation of the laws and regulations applicable in the Emirate.
The Broker shall, even if he is only authorized by one party of the transaction, give them a faithful offer and inform them with all the circumstances he knows. He shall be responsible before them for any deception or mistake he makes.
The Broker may not establish himself as a second party in the contract in which he mediates to sign unless the contracting party allows him to do so and in this case the Broker shall not be entitled to a fee.
The Broker shall be a guardian on any amounts, securities, debentures or things given to him by any of the parties to keep or to deliver to one of the parties. He must give or deliver the same according to what is agreed upon. Trust Rules shall apply to the Broker with regard to these matters.
The Broker shall be responsible for any losses or damages inflicted on any of the contracting parties as a result of his acts through deception, fraud or non-observance of the principles to be followed as per the provisions of this statement or in accordance with the requirements of the Code of Ethical Conduct.
The Broker’s right in remuneration or claim to be reimbursed for the expenses he spent, shall drop if he works in favour of the other contracting party violating by this his obligations towards the party he is representing, or if he accepts from the other party a promise to obtain a benefit when such
If many Brokers were authorized to work on one contract, they shall be jointly responsible for the work delegated to them, unless they were licensed to work severally.
If many persons authorize one Broker in a joint act, they shall be jointly responsible before him for carrying out this authorization, unless they agree on otherwise.
Chapter 4 Broker’s remuneration
The Brokerage contract shall be in writing and stating the names of the contracting parties, specifications of the Real Property and the Brokerage conditions. The contract shall be registered in the real estate Registry.
The Broker’s fee shall be determined by agreement. If there is no agreement the remuneration shall be determined according to the prevailing practice.
The broker shall not be entitled to a fee for his Brokerage unless this Brokerage caused a contract to be signed between the two parties. This contract shall be considered as entered when the parties agree on all the substantial issues therein. What is important is the Broker’s entitlement to his fee in signing the contract even if it was not executed unless the agreement or the practice stipulates otherwise. If the contract was dependent on a pending condition, the Broker shall not be entitled to the fee unless this condition is met. If signing the contract is impracticable for a reason related to the customer, then the Broker shall be entitled to a compensation for the effort he spent.
If the Brokerage contract is revoked, the Broker may claim his fees or keep the same if he received it, unless deception or grave mistake was proved on his part.
If the Broker’s instructions or negotiations did not lead to signing a contract between the two parties, the Broker shall not be entitled, in consideration of his endeavor, to claim any compensations, expenses or costs he incurred unless there was a prior condition or this was done in the special practice.
If more than one Broker participated in the mediation or negotiation for one party in order to reach an agreement and this led to the completion of the agreement, all of them will be entitled to the remuneration as if they were one Broker and the remuneration shall be divided between them as per the conditions of the contract entered between them.
Subject to Article (30), if a party contracted with many Brokers
independently and with regard to one subject in order to mediate for him and negotiate on his behalf in an agreement and one of them succeeded in completing the transaction, he alone shall be entitled to the full compensation.
The Broker shall be entitled to compensation only from the party of transaction who authorizes him to mediate to sign the transaction. If the authorization was issued by both parties, each one shall be severally responsible before the Broker for paying the fee due from him, even if they agreed that one of them shall pay the full fee to the Broker.
Chapter (5) Settlement of Disputes
The Department shall have a Council composed of three persons, in addition to the legal consultant of the Department. They shall be appointed by a decision issued by the Director. The Council shall have competency to settle disputes related to mediation through arbitration.
The Council shall not consider disputes of real estate Brokerage, unless the Brokerage contract contains the arbitration condition, or the adversaries agree subsequently to refer their disputes to the Council for arbitration. The agreement on arbitration shall only be established in writing and it shall specify the subject of the dispute in the arbitration document.
The Council shall commence its duties according to simplified procedures that seek to resolve the disputes and establish justice between adversaries, by following the general principles of the law. The Council’s decision shall be in accordance with the rules of the law, unless the Council was authorized to reconcile. In this case the Council shall not comply with these rules except with the rules related to the public order.
The Council shall have a secretariat to be in charge of receiving the applications, opening files, writing proceedings and correspondence, servicing the adversaries, maintaining the files and generally to do all the administrative tasks assisting the Council. The secretariat shall be appointed by a decision from the Director.
The arbitration application shall be submitted to the Committee by the party requesting arbitration according to the form prepared for this purpose. Supporting documents and sufficient copies according to the number of the disputing parties shall be enclosed with the application. The Chairman shall order that the application is registered after the determined fee is paid. The secretariat shall announce the adversary (the respondent) in the application. The respondent shall respond in writing to the application statement and the incidents and requests therein. He shall lodge this response and any supporting documents thereof
DUBAI REAL TIMES
promise is prohibited by the rules of good faith and Code of Ethical Conduct.
with the secretariat within a week from announcing him. The Council shall decide in the dispute within a maximum period of (30 days) from the date of referring the case. This period may not be extended unless there are reasons justifying this.
Chapter (6) Disciplinary Penalties and the Expiration of the Brokerage Capacity
Without prejudice to any penalty set by the applicable laws, the Committee shall have the right to impose any of the following measures on the Broker who violates any of the provisions of this statement, the decisions or instruction issued thereunder:
Suspension from work for a period not exceeding 6 months Putting the Broker’s name on the black list
The Broker’s registration shall be cancelled if he breaches the Code of Ethical Conduct or if he commits a substantial violation of the applicable laws, regulations and instructions in the Emirate. The cancellation shall be based on a decision issued by the Director according to a recommendation from the Committee, stating the reasons for cancellation. The Broker may file a grievance against the decision of cancellation with the Chairman within 15 days of being informed with it. The decision of the Chairman shall be final.
The Brokerage capacity shall drop from the Broker and his registration with the Department shall be cancelled in the following cases: The Broker leaves the Brokerage business permanently, and informing the department about that. The Broker leaves the Brokerage business for a period exceeding twelve consecutive months without a legitimate excuse acceptable to the Committee. He loses any of the conditions which should be met as per the provisions of this by- law, any regulations or instructions issued thereunder. If it becomes clear that his registration was based on false information that he submitted to the Department. The Chairman issues a decision cancelling the registration as per the provisions of Article (40) of this statement.
DUBAI REAL TIMES
The Department shall notify the competent authorities with the decision issued to discontinue the Broker’s activity or cancel his registration.
period not exceeding another 3 months, if there were reasons justifying this.
The Committee shall be entitled, through consultation with the competent authorities, to classify the Brokers according to their area of specialization and to determine their number according to the need.
The Department shall receive the arbitration fees which shall be determined by a decision issued by the Chairman.
The Chairman shall issue the orders, decisions and instructions necessary to implement the provisions of this by- law.
The provisions of this by- law shall be valid from the date it is signed.
Mohammad Bin Khalifa Al Maktoum
Head of the Land Department Dubai 10 13385 22-05-06 Issued by 30 / 5 /2006
Law No. 8 of 2007 Concerning
Real Estate Development Trust Accounts
We, Mohammed bin Rashid Al Maktoum, the Ruler of Dubai, After perusal of Federal Law No. 5 of 1985 in respect of Civil Transactions, as amended; Law No. 7 of 2006 in respect of real property registration in the Emirate of Dubai; and Law No. 3 of 2006 specifying the areas where non-UAE nationals may own real properties in Dubai, Do hereby issue the following Law:
Chapter One Definitions and General Provisions
This Law shall be named “Law No. 8 of 2007 concerning Real Estate Development Trust Accounts in the Emirate of Dubai Definitions
In the application of this Law, unless the context requires otherwise, the following terms and expressions shall have the meanings as set out opposite each of them: The Emirate:
The Emirate of Dubai
The Land Department
The President of the Department
The General Director of the Department
The Register prepared at the Department to register developers
The acting Brokers shall, when this statement is issued, accord their status with its provisions within 3 months from the day it was issued. The Chairman may extend this period for a
The bank account of the real estate project in which the amounts received from off- plan units buyers or the project financiers will be deposited.
The financial institution or bank approved by the Department to manage a trust account.
The government authorities which grant licenses to developers.
A natural or corporate person licensed to buy and sell real properties for development purposes. The term shall include the master developer and sub-developer.
Real Estate Development:
The construction of multi-storey buildings or complexes for residential or commercial purposes.
An allocated part of the property sold by the developer to third parties.
The provisions of this Law shall apply to developers who sell off-plan units in real estate development projects in the Emirate and, in consideration, receive payments from buyers or financiers.
A special register to be named â€œThe Developers Registerâ€? shall be prepared at the Department. The names and particulars of developers licensed to carry out real estate development activities in the Emirate shall be recorded in the said register. No developer may carry out the said activities unless it is registered in the said register and licensed by the competent authorities pursuant to regulations issued in this regard.
After obtaining a written permit from the Department, a developer may advertise in local or foreign media or participate in local or foreign exhibitions to promote selling off-plan units in the Emirate. The Director shall issue the resolutions as required to regulate the requirements for advertising in the media or participating in exhibitions.
Chapter Two Creating a Trust Account
A developer wishing to sell off-plan units must apply to the Department to open a trust account. The application should be accompanied with the following: 1 Trade license and Dubai Chamber of Commerce and Industry membership certificate; 2 Title deed of the plot to be developed, if any; 3 A copy of the contract between the master developer and the sub-developer; 4 Architectural designs and preliminary engineering plans approved by the competent authorities and the master developer; 5 A financial statement of the costs, revenues and expenditure of the project certified by a chartered auditor; 6 An undertaking by the developer to commence the project construction works after obtaining the master developerâ€™s approval to sell off-plan units; 7 The sale contract form between the developer and the buyer. The Department shall issue its approval to the developer to open a trust account if the above documents are provided, otherwise the Department shall require the developer in writing to complete the documents or provide the required information.
The trust account shall be created under a written agreement between the developer and the trustee. Under the said agreement, the amounts paid by buyers of off-plan units or received from the financiers shall be deposited in a special account to be opened in the name of the real estate project. The said agreement shall set out the terms for managing the account, the rights and obligations of the contracting parties and other terms and conditions. A copy of the contract shall be lodged with the Department.
The Department may add a note regarding the purchase agreement between the master developer and the subdeveloper in the record of the plot owned by the master developer. Further, the buyer of an off-plan unit may apply to the Department to add a note regarding the purchase agreement entered into with the sub-developer in the record of the plot on which the project is to be constructed.
Subject to Article 4 of Law No. 7 of 2006 concerning real property registration in the Emirate of Dubai, sole proprietorships or companies may obtain a license from the
DUBAI REAL TIMES
competent authorities to carry out real estate development in the Emirate in accordance with the requirements and regulations in this regard.
Management of the Trust Account
A trust account shall be opened in the name of the project and shall be used only for the purposes of developing the real estate project. The amounts deposited in the said account may not be attached in favor of creditors of the developer. A developer carrying out several projects should open an independent trust account for each such project.
The Department shall prepare a register that includes names of financial institutions and banks who act as trustees. A trustee should be proficient in managing trust accounts. The agreement between the Department and the trustee shall set out the duties of the trustee and the terms under which the trust account is managed.
The trustee should provide the Department with periodical statements of the revenues and expenditure of the trust account. The Department may assign an auditor to audit the statement and data. Further, the Department may at any time require the trustee to provide it with such information or data as it may deem necessary. If the Department finds any violation of the provisions hereof or the executive regulations issued hereunder, it shall advise the trustee of such violation in writing and request it to rectify the same within a specific period of time and advise the Department in writing of such rectification.
The depositors or their representatives may inspect the accounting records related to them and request copies thereof. Representatives of the official authorities may also inspect the records and obtain copies thereof.
If the developer mortgages the project in order to obtain a loan from financing institutions or companies, the developer should deposit the mortgage amount in the trust account, and such amount shall be disposed of in accordance with the provisions of this law.
DUBAI REAL TIMES
1 A trustee should withhold at least 5% of the trust account deposits after the developer obtains the completion certificate. Such withheld amounts shall be paid to the developer only one year after the units are registered in the names of the buyers and title deeds are issued in their names. 2 In the events of unforeseen circumstances resulting in the non-completion of the project, the trustee should, after consultations with the Department, take measures as required to maintain the interests of depositors.
Penalties Any person who: 1 deliberately provides the competent authorities with inaccurate documents or data in order to obtain a license to carry out real estate development activities; 2 knowingly offers for sale units in unreal real estate projects; 3 embezzles, illegitimately uses or spends payments made to him for real estate development purposes; 4 an auditor who deliberately prepares false report regarding the result of auditing the financial position of the developer, or deliberately hides material information in such report; 5 a consultant who knowingly certifies false documents in relation to the real estate project; or 6 a developer who deals with a broker who is not registered in the real estate developers register in accordance with the provision of regulation 85/2006 concerning real estate brokers in the Emirate of Dubai shall be punished by imprisonment for no less than one month and a fine, or either punishment.
A developer shall be de-registered in the following events: 1 if it is declared bankrupt; 2 if it fails to commence the construction works within 6 months from the date of the approval granted to it to sell off-plan units without having an acceptable excuse; 3 if the license granted to it by the competent authorities is cancelled; 4 if it commits a violation under Article 16.2, 3 or 4 hereof; or 5 if it commits a violation of the laws and regulations regulating the real estate activity in the Emirate.
Chapter Five Final Provisions
Existing developers at the time the provisions of this Law become effective should adjust their positions to comply with the provisions hereof within 6 months from the date this Law is published in the Official Gazette. The Department may extend the said period as it may deem fit.
The Department may charge administrative fees against the services provided under this Law.
Any provision or procedure in any law or regulation shall be cancelled to the extent the same is in conflict with the provisions hereof.
The President shall issue the resolutions required to implement the provisions hereof.
This Law shall be published in the Official Gazette and come into force from the date of its publications.
(Signed) Mohammed bin Rashid Al Maktoum
Ruler of Dubai
trustworthy and clear information. We further undertake to deal transparently with all parties concerned, including transparency of systems and procedures related to our operations.
8. Obligation towards the Society
Issued in Dubai on 6 May 2007 19 Rabi’ll 1428 H
We undertake to be active members of the society and to work to respect the values and principles of our society. We shall also strive so that our services will support the growth of real estate development in the Emirate.
9 Observance of the Interests of Contracting Party
The Code of Ethics
WE, Real Estate Brokers licensed to practice in the Emirate of Dubai, hereby undertake to adhere to the following principles and rules:
10 Obligation to Preserve Document
1 Fair Treatment
11 Respect of the Regulations and Procedures of the Lands & Property Department
We undertake to treat all contracting parties equally and to achieve justice between them without prejudice or differentiation.
2 Respectful Treatment
We undertake to respect the contracting and concerned parties and to respect the privacy of parties and we reject any conduct that would belittle them.
3 Preservation of Privacy
We undertake to preserve the privacy of the parties and the confidentiality of their information and undertake not to reveal any information which is confidential or considered as such to any party whether such information relates to the buyer, the seller or any parties related to real estate brokerage. We further undertake to keep this information from reaching any party that would expose it for contractual or personal purposes.
4 Trust and Integrity
We undertake to present the deal to both parties honestly and to inform the parties of all the facts and circumstances known to us regarding the real estate and to conduct our business with trust and integrity without harming the reputation of the real estate brokerage profession.
5 Quality Observance
We undertake to provide brokerage services of practical value to parties related to the real estate brokerage activity and to continuously seek to develop such services in terms of precision and quality.
6 Observance of Regulations and Laws
We undertake to observe the regulations and laws applied in the country and to honour our contractual obligations. We further undertake not to allow individuals who are not brokers to operate through our office or to exploit the name or licence of our office. We realize that forgery, intentional or negligent presentation of false information or data or any attempt to do so shall subject its perpetrators to questioning and investigation in addition to taking necessary disciplinary action against them.
We are diligent in dealing with all parties with integrity and trust and undertake that our efforts will be based on
We undertake to preserve all documents, instruments and things related to the deal.
We undertake to respect the regulations and procedures followed by the Department. We are further bound by the rules of good behaviour when visiting the Department and to respect the instructions issued to us by the Department officials. We undertake not to establish special relations with the Department employees for personal gain. By signing this Code of Ethics, it is hereby acknowledged that we have read and understood the Code of Ethics, we submit this undertaking willingly and promise to abide by these principles and rules within all aspects of the practice of real estate at all times. By signing this undertaking, it is hereby agreed by the signor, to routinely every week log on to RERA’s website, check new announcements, read and learn new laws introduced, including any amendments to the new or existing laws and apply them and abide by them immediately or as and when required. By signing this undertaking, the signor makes a promise to wear my Brokers Card on me at ALL times when I am working in or out of my office or to any party when asked.
Definition of Broker
n Emirate-Licensed Agent who, for a fee, acts for property owners in a real estate transaction. The Broker / Agent can also act as a Buyer’s Agent to locate a suitable property for a property purchaser or a tenant of a property’.
Registration Requirements The registration requirements for the RERA Broker’s Register is as follows;
Office/Establishment (Application to be made on the prescribed form only with all original documents plus one clear set of copies of the originals.) 1 A valid trade licencse issued by the competent authorities. (This shall include Department of Economic Devel-
DUBAI REAL TIMES
We undertake to protect the interests of the contracting parties and to abstain from doing anything that might harm the interest of one party.
2 3 4 5 6
opment activity codes 7101-01, 7010-02, 7010-03, 7414-04 or property developers registration licence upon decision and/or as directed at sole discretion of RERA Executive under Article (5) A) A membership certificate in the Dubai Chamber of Commerce & Industry. A copy of the applicant’s licence/ passport with regard to the sole proprietorships or companies. An exact copy of the ownership certificate of the brokerage firm or its lease contract. A Certificate of Good Conduct for the establishment’s owner and the senior manager or senior managers of the company. None of the company’s directors or the partners authorised to run the company shall previously have been declared bankrupt or convicted of a crime violating honour or trust. Obtaining certificates in courses specialized in the real estate field from educational institutions accredited by the Department.
Definitions And General Provisions
Article (1) This Law shall be called “Law No. (27) of 2007 regarding Ownership of Jointly Owned Property in the Emirate of Dubai”.
Article (2) The following words and expressions unless the context otherwise dictates shall have the following meanings: Emirate : Emirate of Dubai Department : Land Department Chairman : Chairman of the Department Registry : The property registry maintained at the Department
(Applications to be made on the prescribed form only with all original documents plus one clear set of copies of the originals. The individual’s registration shall be only under the Broker’s Register-registered Establishment and shall provide 1 Passport Copy 2 Residency Visa (occupation must be the same as on the Labour Card) 3 Valid Labour Card 4 Certificate of Good Conduct 5 Two passport size passports The occupation on the residency visa must be the same as the occupation on the labour permit. For those without 6 months residency permit in the UAE, the establishment owner may have to sign an undertaking with RERA as each case will be reviewed individually and a ‘Special Arrangement’ may be permitted in these instances.
Master Developer: Whoever is licensed to engage in the property development and sale of Units in the Emirate under the terms of a Master Commu nity Declaration.
GOVERNMENT OF DUBAI LAW NO. (27) OF 2007
Ownership of Jointly Owned Properties in the Emirate of Dubai We, Mohamed bin Rashid Al Maktoum, Ruler of the Emirate of Dubai DUBAI REAL TIMES
H. H. THE RULER’S COURT
of Dubai, issue the following Law:
Taking cognizance of:– Federal Law No. 5 of 1985 regarding civil transactions and its amendments; And Law No. 7 of 2006 regarding property registration in the Emirate of Dubai; And Regulation No. 3 of 2006 regarding determining designated areas where non-citizens can own property in the Emirate
Sub-Developer: Whoever is licensed to engage in the property development and sale of Units and acquired the right from a Master Developer to develop part of a development project in accordance with the terms of the Master Community Declaration applying to that project. Jointly Owned Property: The whole or part of a building or land, or both, divided into Units intended for separate ownership where part of such building or land has been designated as Common Areas. Unit: Any flat, floor, a part of land or house (villa) connected or not connected with another house being part of Jointly Owned Property. Common Areas: Those common parts of property designated for common use by Unit Owners and Occupiers and shown on the Site Plan. Site Plan: A plan registered in the Register showing the Units and the Common Areas. Owner: Whoever is registered as an owner of a Unit in the Register, including persons with a long term lease or usufruct right for limited period and also the Master Developer or the Sub-Developer in regard to unsold Units. Master Community Declaration: The terms and conditions governing the development and operation of Jointly Owned Property. Building Management Statement: A document complying with relevant regulations and registered on the Register that sets out arrangements for maintenance and cost sharing relating to Common Areas and facilities, and including equipment and services in any part of
Owners’ Association: An association constituted in accordance with article 17 of this Law.
Each Occupier has an obligation in favour of other Unit Owners, Occupiers and the Owners’ Association to comply with the Master Community Declaration and the Association Constitution, to the extent to which their provisions apply to an Occupier.
Association Constitution: The rules and regulations that govern the Owners’ Association, which shall be issued in accordance with this Law.
Occupier: Whoever leases a Unit (other than a long term lease) and any visitor of a Unit Owner.
1) Unless otherwise indicated on the Site Plan, the Common Areas of Jointly Owned Property include, without limitation:
Utility Service: Any of the following services: –
a) Structural elements of Jointly Owned Property including the main supports, foundations, columns, beams, structural walls, steps, ceilings, ceiling joists, hallways, staircases, stairwells, emergency exits, entrances, windows located on exterior walls, facades and roofs;
water reticulation or supply; gas reticulation or supply; electricity supply; air conditioning; telephone service; computer data or television service; a sewer system; drainage; a system for the removal or disposal of garbage or waste; a system for the delivery of mail, parcels or goods; any other system or service designed to enhance the Utilities of Units or Common Areas.
Article (3) Lands owned by Developers and used as Jointly Owned Properties (and the Units sold by said Developers) shall be registered with the Department. Where a Unit in an existing Jointly Owned Property is used by the Owners of another Jointly Owned Property, the Owners Association for the second Jointly Owned Property becomes a member of the Owners Association for the first Jointly Owned Property.
Article (4) The Department shall prepare and maintain special registers for the Jointly Owned Properties and their Owners and shall issue appropriate title deeds and regulate the sale, mortgage (or any other disposal) of said Jointly Owned Properties and the registration of long term lease contracts and usufruct rights related to these Jointly Owned Properties. Access to those registers shall be provided to all interested parties.
Article (5) Article (4) of Law No (7) of 2006 concerning property registration in the Emirate of Dubai shall apply to ownership of Jointly Owned Property.
Chapter Two Ownership Of Jointly Owned Properties
Article (6) The Site Plan and the Master Community Declaration and the Association Constitution form part of the title deed of Jointly Owned Property and shall be attached thereto, and the Department shall keep an original copy of the Master Community Declaration at all times. Each Unit Owner has an obligation in favour of other Unit Owners, Occupiers and the Owners’ Association to comply with the Master Community Declaration and the Association Constitution.
b) Parking areas, watchman rooms, recreational facilities and equipment, swimming pools, gardens, storage facilities, places designated for use by the Owners’ Association or whomever it assigns or contracts to manage the Jointly Owned Property; c) Main utility equipment and systems including electricity generators, lighting systems, gas systems and equipment, water systems, heating and cooling systems, air conditioning systems and waste storage and treatment facilities; d) Lifts, tanks, pipes, generators, suction fans, air compressor units, mechanical ventilation systems; e) Water mains, sewer pipes, ventilation shafts, gas pipes and flues and electrical wiring and conduits serving more than one Unit; f) All fittings, connections, equipment and facilities used by more than one Unit Owner; g) Any device for measuring the reticulation or supply of utilities; h) All other parts which are not located within the boundaries of a Unit, that are necessary and required for the existence, maintenance or safety of the property. 2) Unless otherwise indicated on the Site Plan, the Common Areas of Jointly Owned Property comprising land, other than a building or part of a building, include, without limitation: a) roads, roundabouts, intersections, pathways, pavement sides, drainage ways curbs, gutters, median strips, bridges, viaducts, b) lakes, ponds, canals, promenades, fountains, water features and other waterways, including all equipment associated with them; c) Landscaping, open space areas and playgrounds.; d) wires, cables, pipes, sewers, drains, ducts, devices and equipment by which Units or Common Areas are supplied with Utility Services; and e) measuring or Utility Service supply devices designated for common use by the Owners and Occupiers of the Units.
DUBAI REAL TIMES
another building which is subject to this Law.
1) Unless otherwise indicated on the Site Plan, each Unit situated in a building or part of a building shall include, without limitation, the following: a) Floors, floor materials and components down to the base of the joists and other structures supporting the floor of the Unit; b) Plaster ceilings and all other types of ceilings, additions that form part of the internal area of the Unit and spaces between the ceilings, ceilings above the support walls and structures inside the Unit and walls separating the Unit from the rest of the Jointly Owned Property and any adjacent Units or Common Areas; c) All non-load bearing walls and non-support walls inside the Unit; d) Windows, glass and fixtures that form part of the interior windows, lighting systems for the Unit, doors, door frames and all equipment and fixtures serving the Unit; e) All internal connections serving the Unit; f) All fixtures and fittings installed by the Unit Owner or Occupier;
A Unit co-owned by two or more persons may not be divided among the co-owners unless the Departmentâ€™s approval is obtained.
Article (12) 1) Each co-owner of a Unit has a right of first refusal to purchase another co-ownerâ€™s share in a Unit offered for sale to a non owner. If more than one co-owner possesses this right, then they shall be entitled to purchase proportionally to their existing interests. 2) The right of first refusal does not apply to any sale between spouses, lineal ascendants, lineal descendants, brothers or sisters or their descendants.
Article (13) 1) The right of first refusal cannot be divided, so it cannot be used or abandoned unless in whole, and in case of multiple owners of this right each shall use his right according to his share, and if one or some of them abandon his right then this right shall be transferred proportionally to their existing interest.
2) Unless otherwise indicated on the Site Plan, each Unit associated with Jointly Owned Property comprising of land, other than a building or part of a building, shall include, without limitation, everything situated within the boundaries of the Unit, other than the Utility Service that services the Common Areas or another Unit.
The right of first refusal shall lapse should the selling co-owner notify the other co-owners, through a Notary Public, of the name and address of the third party purchaser and the conditions of sale, and the co-owners fail to agree to said conditions within a period of 1 month after receiving said notice.
4) Dividing walls between adjoining Units shall be shared by both Owners if they are part of the Common Areas.
Article (9) Unit Owners and Developers with respect to unsold Units own an undivided share of the Common Areas in the proportions indicated in the Master Community Declaration unless agreed otherwise. For the purpose of this paragraph the proportions are to be determined on the basis of the Unit area out of the total area of the Jointly Owned Property.
Chapter Three DUBAI REAL TIMES
h) All additions, modifications and improvements made to the Unit from time to time, and for the purpose of this paragraph the Unit does not include the Utility Service situated in the Unit that services the Common Areas or another Unit.
3) Each Unit is entitled to appropriate support and shelter from the other Units and the Common Areas.
Disposal Of Units Of Jointly Owned Property
Article (10) A Unit Owner may sell or dispose of his Unit by any kind of disposal and also is entitled to mortgage his Unit in favour of a bank or financial institution provided that the disposition conveys the whole of his interest in the Unit and Common
2)In the event a co-owner agrees to buy, he must notify the selling co-owner through the Notary Public of said intention within 15 days of receiving notice of the sale and complete the sale procedures at the Department within 10 working days from the end of this period. If it is proved that the sale to the purchaser was completed on better terms than the terms in the notification sent to the coowners; they have the right to claim for compensation for the damage suffered to them before the competent court.
Article (14) Jointly Owned Properties registered according to this Law are not subject to the provisions of Preemption mentioned in the Federal Law No. (5) of 1985 regarding civil transactions.
Article (15) A Unit Owner may lease his Unit on condition that the Unit Owner and tenant remain obliged to comply with the Association Constitution and the Master Community Declaration towards the other Unit Owners, Occupiers and the Ownersâ€™ Association.
Article (16) Under no circumstances can Common Areas be divided.
Chapter Four Owners’ Association
Article (17) 1) An Owners’ Association shall be legally formed upon the registration of the first sale of a Unit in a Jointly Owned Property in the Register. 2) The Association shall comprise the Unit Owners of the Jointly Owned Property and the Master or Sub Developer with respect to unsold Units. 3) A Unit Owner’s membership in the Association shall commence upon registration as the Owner of the Unit and shall lapse upon the expiry of his registration as the Owner of the Unit.
Article (18) 1) The Owners’ Association is a legal entity not for profit and has a separate legal existence from its members, has the right to sue in this capacity and to own movable assets. 2) The Owners’ Association shall be subject to the provisions and terms of this Law, the provisions of the Master Community Declaration and the Association Constitution and shall be represented before the Courts or other authorities by its Manager.
Article (19) 1) Each Unit Owner and the Developer with respect to unsold Units have the right to attend and vote at meetings of the general assembly of the Owners’ Association in accordance with the Association Constitution. 2) Each Unit Owner has a number of votes in proportion to his share of ownership in the Jointly Owned Property as indicated in the Master Community Declaration.
Article (20) Each Owners’ Association must mention “Owners Association” in its name, and number and name of the Jointly Owned Property, if any.
Article (21) 1) The Owners’ Association is responsible for the management, operation and maintenance of the Common Areas and for that purpose must obtain an appropriate license from the Department. 2) The Owners’ Association may delegate all or some of its powers to a person or company it appoints at such remuneration and on such terms as agreed by the parties.
Article (22) 1) Each Unit Owner shall pay the Owners’ Association his share of the annual service fee to cover the cost of management, operation, maintenance and repair of the Common Areas. Such fee must be calculated in proportion to the Unit area out of the total area of the Jointly Owned Property. The Master or Sub Developer shall pay his share of the fee with respect to unsold Units. 2) A Unit Owner may not relinquish his share in the Common Areas in order to avoid paying his share of the annual service fee.
Article (23) 1) Save as authorized by the Owners’ Association or permitted by the Master Community Declaration, a Unit Owner may not make any alterations or modifications to the structure or external appearance of his Unit or any part of the Jointly Owned Property that would materially affect the Unit or Jointly Owned Property or its external appearance. 2) A Unit Owner who contravenes any of the provisions of paragraph (1) shall be liable to repair the resulting damage at his own expense and in the manner requested by the Owners’ Association. If the Unit Owner fails to comply with this requirement, the Owners’ Association shall repair the damage and recover the repair costs from the Owner.
Chapter Five Common Areas
Article (24) Subject to the Association Constitution, Unit Owners and Occupiers and their guests must use the Common Areas as designated for and in a way that does not compromise the rights of others to use those areas or disturb others or put their safety or the safety of the Jointly Owned Property at risk.
Article (25) 1) The Owners’ Association shall have a lien on every Unit for unpaid service fees and any other obligations levied against the Unit Owner in accordance with the provisions of this Law or the Association Constitution. This right shall exist even when ownership of the Unit has been transferred to a new Owner. 2) If the Unit Owner does not pay his share of service fees or defaults on any of his obligations, the decision the Manager of the Association takes against the Unit Owner shall be, after 3 months of being notified to him through the Notary Public, enforceable by the Execution Judge at any Competent Court, and in all cases the affected person may object to this decision within that period at the Competent Court, and the execution must be withheld until a decision in the subject of the objection is made.
Chapter Six Obligations Of The Property Developer
DUBAI REAL TIMES
Common Areas may not be disposed of, in whole or in part, separately from the Units to which they appertain.
Article (26) 1) In compliance with the construction contract provisions in Federal Law No. (5) of 1985 regarding civil transactions the Developer remains liable for 10 years from the date of completion certificate of the building to repair and cure any defects in the structural elements of the Jointly Owned Property notified to him by the Owners’ Association or a Unit Owner.
2) The Developer, in respect of a development or part of a development undertaken by him, remains liable for 1 year from the date of completion certificate of the building to repair or replace defective installations in the Jointly Owned Property which, for the purpose of this Article, include mechanical and electrical works, sanitary and plumbing installations and the like. 3) Subject to the provisions of paragraphs (1) and (2) above, nothing in this Law shall in any way affect or impair any rights or warranties which a Unit Owner may be entitled to assert against the Master Developer or the Sub-Developer under any other law. 4) The provisions of any agreement entered into after this Law takes effect and inconsistent with this Article shall be absolutely null and void.
Article (27) 1) If a project involving Jointly Owned Property is to be developed in stages, the Master Community Declaration must disclose the arrangements for staging the project 2) If the Jointly Owned Property is only part of any other property project and the Building Management Statement did not explain the way of managing this building then the Building Management Statement must be registered at the Register.
Chapter Seven Jointly Owned Property Insurance
Article (28) An Owners’ Association must maintain comprehensive insurance in an amount equal to the repair or replacement value of the Jointly Owned Property in the event of its destruction for any reason and the Owners’ Association shall be the beneficiary of said insurance.
Article (29) The Owners’ Association shall procure insurance against liability for damage to property or bodily injury to Owners and Occupiers.
DUBAI REAL TIMES
The insurance premiums payable by each Unit Owner shall be covered by the annual service fees paid to the Owners’ Association according to the provisions of Article (22) of this Law.
Chapter Eight Closing Provisions
Article (31) In accordance with Article (18) of this Law, the Owners’ Association may, in its own name and on behalf of its members, sue others including other Unit Owners, Occupiers and any other person occupying the Jointly Owned Property for breach of this Law or the Association Constitution.
Article (32) The Chairman shall issue regulations and decisions required to enforce this Law.
Article (33) This Law shall be published in the Official Gazette and shall take effect three months from the date of publication.
Mohamed bin Rashid Al Maktoum
Ruler of Dubai
Issued in Dubai on: 10 December 2007 Corresponding to: 30 Thu Al Qeada 1428 AH
Law No. 16 of 2007 Establishing the Real Estate Regulatory Institute We, Mohammed bin Rashid Al Maktoum, Ruler of Dubai After taking cognisance of Law No. 7 of 2006 regarding real estate registration in the Emirate of Dubai; and The Decree concerning the formation of the Land Affairs Committee 1960 Issue the following Law:
Article (1) This Law shall be called “Law No. 16 of 2007 Establishing the Real Estate Regulatory Institute.”
Article (2) The following words and expressions shall have the meanings set out opposite unless the context shall require otherwise: Ruler: HH The Ruler of Dubai Emirate: Emirate of Dubai Government: Government of Dubai Executive Council: The Executive Council of the Emirate Institute: The Real Estate Regulatory Institute Executive Director: The Executive Director of the Institute Department: The Lands & Property Department Owners Association: A membership organisation for owners of real estate units whether flats, floors or parts of land, in a joint property
Article (3) There shall be set up under this Law a public corporation called the “Real Estate Regulatory Institute” with legal personality and an independent financial and administrative structure. The Institute have full authority to perform legal acts in accordance with its stated objectives including the capacity to contract and
Article (4) The head office of the Institute is to be situated in Dubai. The Institute may open branches in the Emirate and elsewhere
Article (5) The objective of the Institute is to regulate the real estate sector in the Emirate by participating in devising strategies for this sector and developing and executing the necessary work plans, including: 1. Proposing the necessary legislation to regulate the work of real estate brokerage offices and owners associations 2. Issuing regulations for the training and certification of real estate brokerage offices 3. Licencing all activities relating to the work of the Institute including activities relating to real estate development in the Emirate 4. Accrediting banking and financial institutions which are certified to manage guarantee accounts of real estate developments on behalf of real estate developers in accordance with applicable legislation 5. Licencing and regulating real estate brokerage offices and monitoring and overseeing their activities 6. Licencing and regulating companies and establishments that manage real estate and residential developments and monitoring and overseeing their activities 7. Registering and attesting leases for the various kinds of real estate units in the Emirate in accordance with such legislation as may be issued in this regard 8. Monitoring and overseeing the activities of owners associations and auditing their accounts and records 9. Keeping track of property advertisements that are published in the various media operating in the Emirate including those operating in free zones 10. Providing support and advice on property valuation in accordance with the latest accredited standards 11. Issuing statistical reports and specialised research and studies on the property market including any publications and information that aid such studies and offer insight into the property market in the Emirate
12. Preparing and executing programs and projects that enhance the role of nationals in the real estate sector and encourage their involvement in that sector 13. Developing and implementing education and awareness programs on the rights and obligations of parties involved in the real estate sector
Article (6) The Executive Board of the Institute comprises an Executive Director appointed by decision of the Chairman of the Executive Council and a number of staff in respect of whom Dubai Law No. 27 of 2006 on human resource management will apply
Article (7) The Executive Director of the Institute shall oversee the work and activities of the Institute and shall represent the Institute in relation to third parties including but not limited to: 1. Adopting the strategic plan and work plans of the Institute and submitting them to the Executive Council for approval 2. Implementing the general policy that is approved by the Executive Council and its decisions in this regard 3. Proposing initiatives, programs and projects concerning the work and activities of the Institute 4. Proposing an organisational structure and financial, administrative and technical regulations for the Institute and submitting them to the Executive Council for approval 5. Overseeing the work of the Executive Board of the Institute and hiring staff for the Institute 6. Preparing the Instituteâ€™s annual budget and submitting same to the Executive Council for approval 7. Exercising any other powers conferred on him by the Executive Council or under a decision issued pursuant to this Law
Article (8) There are hereby transferred to the Institute the following functions of the Department: Regulating the work of real estate offices and real estate brokers Preparing studies and research on real estate Managing and regulating guarantee accounts of real estate developments
DUBAI REAL TIMES
may, in its own name, sue and be sued and appoint others to represent it for this purpose. The Institute shall be attached to the Lands and Property Department
Regulating and overseeing owners associations
Article (9) Subject to the Article 6 of this Law, the Institute may, in its discretion, transfer staff engaged in the regulation of real estate at the Department to the Institute
Article (10) The Institute shall keep regular accounts and records that conform to commercial accounting standards. The financial year of the Institute shall run from 1st January until 31st December. The first financial year shall begin on the date on which this Law comes into effect and end on 31st December of the next following financial year
Application: According to Article 3, the Tenancy Law applies to all property in the Emirate of Dubai including open and agricultural lands, but excluding hotel establishments and property which individuals and companies provide to their employees as free housing.
2 Written Tenancy Contracts: Article 4 of the Tenancy Law requires tenancy contracts to be drawn up in writing and registered with the Real Estate Regulatory Agency (“RERA”). The Tenancy Law forbids the Rent Committee and other government entities from considering any matter arising from a tenancy contract that has not been registered with RERA. 3
4 No Amendment to Tenancy Contract during first Two Years: Article 9 of the Tenancy Law states that no
Article (13) Any contrary provision of any other law or legislation is hereby repealed
Article (14) This Law shall be published in the Official Gazette and shall come into effect on the date of publication
MOHAMMED BIN RASHID AL MAKTOUM RULER OF DUBAI Issued in Dubai on 30th July 2007 Corresponding to 16 Rajab 1428 AH
New Dubai Landlord & Tenant Law (Law No. 26 of 2007) Introduction DUBAI REAL TIMES
Summary of the Main Provisions of the Tenancy Law
The financial resources of the Institute consist of the following: Subsidy allocated to the Institute in the Emirate’s budget Fees the Institute charges for its services to the public Any other resources approved by the Executive Council
The Chairman of the Executive Council shall issue the regulations and decisions necessary to implement this Law
Below is a summary of the key provisions of the new Tenancy Law, followed by an unofficial translation of the Tenancy Law prepared by Al Tamimi & Company.
On 26th November 2007, HH Sheikh Mohammed bin Rashid Al Maktoum, Ruler of Dubai, signed Dubai’s first landlord and tenant law, namely the “Law Regulating the Relationship between Landlords and Tenants in the Emirate of Dubai No. 26 of 2007” (the “Tenancy Law”). The Tenancy Law was published in the Official Gazette on 31st December 2007 and came into effect 60 days after its date of publication, namely on 29th February 2008.
Termination: According to Article 7, a valid tenancy contract may not be terminated unilaterally during its currency and may only be terminated by the agreement of both parties or under the conditions specified by law.
increase in rent or other amendment to a tenancy contract may be made during the first two (2) years of the tenancy relationship.
Determination of Rent Increase: Subject to Article 9, Article 13 allows landlords and tenants to agree a revised rent on renewal of the tenancy contract and states that, in the event of a dispute over the revised rent, the Rent Committee shall determine a rent in line with comparable properties in accordance with the rules and standards issued by RERA.
6 Notice of Non-Renewal or Revision of Tenancy Contract: According to Article 14, if either party does not wish to renew the tenancy contract or wishes to revise any of its terms, that party must so notify the other party at least 90 days before the end of the tenancy contract unless the parties agree otherwise. 7 Tenant’s Eviction from the Tenanted Premises: Article 25 (1) lists the circumstances in which a landlord may request a tenant to vacate the premises before the end of the tenancy term. Article 25 (2) lists the circumstances in which a landlord may request a tenant to vacate the premises at the end of the tenancy term by providing at least 90 days’ prior notice. In circumstances in which a landlord has evicted a tenant from premises due to demolition and reconstruction works or renovation works, according to Article 29, the tenant has a prior right to re-rent the premises at the rental rate for comparable property within 30 days of being notified by the landlord. 8 Dispute Resolution: Article 32 of the Tenancy Law provides the option of referring a dispute to arbitration rather than the Rent Committee. The procedure for the appointment of arbitrators is described in Article 33.
Regulating Relationship between Landlords and Tenants in the Emirate of Dubai We Mohamad Bin Rashid Al-Maktoum, Ruler of Dubai z After perusal of Federal Law No. 5 of 1985, regarding Civil Transactions and its amendments, z And Federal Law No. 10 of 1992 Promulgating Law of Evidence in Civil and Commercial Transactions, z And Decree No. 2 of 1993, establishing the Special Judicial Committee to settle Disputes between landlords and tenants, And Law No. 16 of 2007, establishing the Real Estate Regulatory Agency Issue the following Law:
Name Article (1) This law shall be called the “Law Regulating the Relationship between Landlords and Tenants in the Emirate of Dubai No. 26 of 2007”.
Definition – Scope of Implementation
Committee: The Judicial Committee authorised to settle deputes between landlords and tenants. Notification: Written notification sent by either of the tenancy contract to the other party through notary public, registered mail, personal delivery or by any technological means approved by law.
Article (3) This law shall be applicable to leased properties in the Emirate including open and agricultural lands, excluding hotels and free accommodation provided by natural or judicial persons to their employees.
Tenancy Contract Article (4) 1 The tenancy relationship between a landlord and tenant shall be governed by a written tenancy contract signed by them describing the property in detail, the purpose of the tenancy, name of landlord, No. and type of land, name of the area, period and rent value and method of payment. 2 All properties subject to this law, or its amendments, are to be registered with the Agency. However, judicial bodies and governmental departments and authorities should not consider any claim, case or execution based on a tenancy contract unless the same is registered with the Agency in accordance with rules and conditions set for this purpose.
Period of Tenancy
In implementing provisions of this law, the following words and terms shall have the meaning assigned to them, unless the text otherwise requires: Emirate :
Emirate of Dubai.
Real Estate Regulatory Agency.
Real Estate: Immovable property and its annexures rented for residential, commercial or professional purposes or any other legal activity. Tenancy Contract: The contract by which landlord is committed to enable tenant to benefit from the property for specified purpose and period against specified consideration. Landlord: Natural or Judicial person who has, by law or consent, the right of disposal of the property and to whom the title of the property is transferred during tenancy period or to his representative or legal attorney, including the tenant authorized by the landlord to sublease the property. Tenant: Natural or judicial person who benefits from the property, or part thereof, pursuant to a tenancy contract and any person who receives the tenancy legally from the tenant. Subtenant: Natural or judicial person who benefits from the property, or part thereof, in accordance with a tenancy contract signed with the tenant. Rent: Specified consideration which the tenant is bound to pay according to the tenancy contract.
Article (5) The period of tenancy must be specific, otherwise the tenancy contract shall be deemed as valid for the period specified for payment of the rent value.
Article (6) If the tenant continues to occupy property after expiry of the contract period without any objection by the landlord, then the contract shall be renewed for similar period or for one year, whichever is less, with the same terms and conditions.
Article (7) If the tenancy contract is due and valid, it cannot be unilaterally terminated by the landlord or the tenant, unless both parties agree on such termination or in accordance with the provisions of this law.
Article (8) A sublease contract between a tenant and a subtenant shall expire by expiry of the tenancy contract between the landlord and the tenant, unless the landlord expressly agrees to an extension of the sublease contract period.
DUBAI REAL TIMES
caused to the property for reasons not relating to the tenant.
Landlord and tenant mush specify rent value in the tenancy contract, and should not increase such rent value or amend any of tenancy contract conditions until the elapse of two years from date of inception of the original tenancy relationship.
Article (10) The Agency shall have the exclusive authority to specify percentage of rent increase in the Emirate, with regard to of economic circumstances.
Article (11) Rent value includes the enjoyment of property utilities, like summing pools, playgrounds, sports halls, health club, car parking….etc. unless agreed otherwise.
Article (12) Tenant shall pay rent value on agreed dates. However, if such agreement is absent or cannot be proved, then rent value must be paid in annual four equal instalments to be paid in advance.
Article (13) 1 Subject to article (9) herein and for tenancy contract renewal purposes, landlord and tenant may review rent value and if no agreement is reached and necessity for extension of tenancy period is proved, then the Committee shall decide extension of tenancy period and determine rent value according to similar properties in the same area. 2 The Committee shall decide rent value of similar properties in accordance with rules and standards proposed by the Agency on the basis of property condition and rent value of similar property in the same area.
Article (14) If either party opts not to renew the tenancy contract or wishes to amend any of its conditions, then he must notify the same to the other party not less than 90 days prior to expiry date, unless both parties agreed otherwise.
DUBAI REAL TIMES
Landlord shall be committed to hand over the property in good condition that enables tenant to obtain the benefit subject of the tenancy contract.
Landlord must provide tenant with all approvals required by competent authorities in the Emirate if he wishes to execute decoration works, or other works, that require such approvals, provided that such works shall not affect the construction of the property and provided that tenant has necessary documents evidencing applying for such approvals.
Obligations of the Tenant Article (19) Tenant must pay rent value on due dates and preserve the property as his own property. He also shall not make any changes, renovations or maintenance works without landlord’s permission, after obtaining necessary approvals from competent authorities. This shall not violate tenant’s obligation to execute agreed upon maintenance or that which is ordinarily done by tenants.
Article (20) Landlord may obtain a maintenance deposit amount from tenants to guarantee maintenance of the property at the expiry of tenancy contract, provided that landlord shall undertake to refund this deposit, or any remaining amount, upon expiry of the tenancy contract.
Article (21) Tenant shall be obliged, upon expiry of tenancy, to return the property to landlord in the same condition as handed over to him at the time of contracting except for normal wear and tear or for reasons beyond his control. However, in case of any dispute, the matter shall be referred to the Committee for decision.
Article (22) Unless the tenancy contract otherwise provides, the tenant shall pay all fees and taxes due to government authorities for benefiting from the property, in addition to any other fees or taxes due for subleasing.
Article (23) The tenant shall not, upon vacating the property, remove any fixed improvements unless agreed otherwise by both parties.
Landlord shall, during validity of the tenancy contract, be liable for undertaking maintenance of the property and shall rectify any defects or faults that affect tenant’s intended benefit from the property, unless the two parties agree otherwise.
Unless otherwise agreed in the tenancy contract, the tenant shall not assign the benefit or sublease the property without obtaining landlord’s approval.
Article (17) Landlord shall not make any change in the property, its utilities or ancillaries affecting the intended benefit, and landlord shall be liable for such changes caused by him, or by any person authorized by him, and for any damages, faults or shortages
Eviction Article (25) 1 Landlord may demand eviction of tenant prior to expiry of tenancy period in the following cases:
a) If tenant fails to pay rent value, or part thereof, within thirty (30) days of landlord’s notification for payment.
b) If tenant subleases the property, or part thereof, without landlord’s written approval and in such case eviction shall be applicable to subtenant, and his right to refer to tenant for compensation shall be reserved.
If landlord or tenant dies, the tenancy relationship shall devolve to their heirs, unless tenant’s heirs decide to terminate that relationship, provided that termination shall become effective after thirty (30) days from notifying landlord of such decision or on expiry of tenancy contract, whichever occurs first.
c) If tenant uses, or allows others to use, the property for illegal or immoral activities.
e) If tenant uses the property for purposes other than the purpose it was leased for or if he uses the property in a way that violates planning, building and land using regulations. f) If the property is in danger of collapse, provided that landlord must prove such condition by a technical report attested by Dubai Municipality. g) If tenant fails to observe legal obligations or tenancy contract conditions within (30) days from date of notification by landlord to abide by such obligations or conditions. 2 Landlord may demand eviction of tenant upon expiry of tenancy contract in the following cases: a) If development requirements in the Emirate requires demolition and reconstruction of the property in accordance with government authorities instructions. b) If the property requires renovation or comprehensive maintenance which cannot be executed while tenant is occupying the property, provided that a technical report attested by Dubai Municipality is to be submitted to this effect. c) If landlord wishes to demolish the property for reconstruction or to add new constructions that prevent tenant from benefiting from the leased property, provided that necessary licences are obtained. d) If landlord wishes to recover the property for use by him personally or by his next of kin of first degree. However, in all above mentioned four cases, landlord must notify tenant with reasons of eviction at least ninety (90) days prior to expiry date of tenancy contract.
Article (26) If, upon expiry of the tenancy period, the landlord demands recovery of the property for his own use, or use by his first degree next of kin, and the Committee approves the same, then landlord shall not rent the property to others before one year from date of recovery of the property, otherwise the tenant shall have the right to request the Committee to order proper compensation to him.
The transfer of title to a new landlord shall not affect tenant’s right to continue occupation of the property in accordance with the tenancy contract signed with the previous owner, provided that the tenancy contract has a fixed date.
Article (29) 1) Tenant shall have priority to return to the property if it is demolished and reconstructed or if it is renovated, provided that rent value shall be fixed in accordance with Article (13) herein. 2) Tenant shall benefit from the above mentioned priority right within thirty (30) days from being notified by landlord.
Article (30) If the Committee orders termination of tenancy contract and the property is occupied by subtenant, in accordance with a contract signed with the tenant and approved by landlord, then the subtenant shall have the right to continue occupation of the property with the same conditions.
Article (31) Filing an eviction case shall not relieve tenant from paying rent value for the whole period of the case and until the issue of judgement and execution thereof.
Article (32) If landlord and tenant agree, in the tenancy contract or subsequently, to refer any dispute to arbitration, then neither of them shall do anything that may affect the property or the rights and obligations of both parties as contained herein. However, the Committee shall, upon request by landlord or tenant, issue interlocutory orders to protect such rights until the issue of arbitration award.
Final Judgements Article (33) In the event of a dispute arising without the landlord and tenant have agreed on arbitrators, or if one or more of the agreed arbitrators quits or is removed or becomes incapable, and parties didn’t agree in this regard, then the Committee shall, upon request by either party, appoint an arbitrator or arbitrators equal or complementary to the agreed number.
Article (34) Landlord is prohibited from disconnecting services to the property or preventing the tenant from benefiting from the
DUBAI REAL TIMES
d) If tenant causes changes that endanger safety of the property in a way that it cannot be restored to its original condition or if he causes damage to the property intentionally or due to his gross negligence to take proper precautions or if he allows others to cause such damage.
property. However, in the event of occurrence of such incidents, the tenant shall refer to police station in the same area to prove the case or to stop such prevention, and also to file a case before the Committee, enclosing supporting reports, for compensation of any damages.
Article (35) Eviction decisions are to be executed through the Committee in accordance with relative rules and procedures. Other decisions taken by the Committee shall be executed by Dubai Courts Execution Section.
Article (36) The Agency shall issue rules for implementation of this law which are to be forwarded to the Executive Council’s Chairman for approval.
Appointing a Special Judicial Committee on Property Dispute Resolution for the Emirate of Dubai
WE, Mohammed bin Rashid Al Maktoum, Ruler of Dubai Taking cognisance of Law No. 3 of 2003 appointing the Dubai Executive Council; Law No. 7 of 2006 concerning property registration in the Emirate of Dubai; Law No. 8 of 2007 concerning guarantee accounts of real estate developments in the Emirate of Dubai; Law No. 16 of 2007 setting up the Real Estate Regulatory Agency;
This law is to be published in the Gazette and shall be effective sixty (60) days after date of publishing.
Decree No. 2 of 1993 appointing a special judicial committee to resolve landlord-tenant disputes, as amended; and
Mohamed bin Rashid Al Maktoum
Regulation No. 3 of 2006 designating the areas in which nonUAE nationals may own freehold property in the Emirate of Dubai
Ruler of Dubai
Issued in Dubai on 26 November 2007
Decree as follows:
New Dispute Resolution Committee for Property Disputes in Dubai’s ‘Designated Areas’
DUBAI REAL TIMES
On 30th December 2007, Sheikh Mohammed Bin Rashid Al Maktoum, Ruler of Dubai, signed Decree No. (30) of 2007 appointing a Special Judicial Committee on Property Dispute Resolution for the Emirate of Dubai. The Decree was published in the Official Gazette on 31st January 2008 and came into effect on the date of its publication. According to the Decree, a special judicial committee called the ‘Committee on Property Dispute Resolution’ is to be established in Dubai with exclusive authority to hear and decide on disputes relating to property located in those areas of Dubai in which foreign ownership of property is permitted, i.e. the so-called “Designated Areas.” The only exception to this new committee’s exclusivity in Designated Areas is with regard to disputes arising from leases of five (5) years or less, which will continue to be referred to the Dubai Rent Committee for determination.
The Chairman of the Government of Dubai’s Executive Council is authorised pursuant to the Decree to appoint the chairman and members of the new Committee and to issue its procedural rules. At the time of preparing this article, the Executive Council has not published the list of appointments or the procedural rules. There follows an unofficial translation of Decree No.(30) of 2007 prepared by Al Tamimi & Company: Decree No. 30 of 2007
Article (1) A special judicial committee called the ‘Committee on Property Dispute Resolution’ shall be set up with exclusive authority to consider and decide all disputes relating to real property located in the areas designated in said Regulation as areas in which foreign freehold ownership of property is permitted. The Committee shall, in particular, decide issues arising from: Disputes relating to ownership interests in real estate in the said areas including disputes concerning usufruct rights over real property and any related rights in rem Disputes arising out of the actions of property brokers Disputes arising out of leases of more than 5 years
Article (2) The Committee shall comprise a chairman and at least 5 members appointed by a decision from the Chairman of the Executive Council
Article (3) The Committee shall convene with the presence of a majority of its members and shall pass its resolutions by a majority vote of attending members
Article (4) The Committee’s decisions shall be final and non-appealable and shall be enforced by the Execution Division attached to the Dubai Courts
The Committee shall issue its decisions in accordance with the laws and regulations in force in the Emirate of Dubai, particularly property legislation
This Law shall be called “Law No. (13) of 2008 Regulating the Interim Real Estate Register in the Emirate of Dubai”.
In order to decide cases, the Committee shall: Resolve and settle the disputes through conciliation and arbitration if the parties so agree Avail of the assistance of experts, consultants and engineers specialising in the property sector
Article (7) The Chairman of the Executive Council shall issue a decision concerning the Committee’s procedural rules including fees and costs for the cases and transactions mentioned in this Decree
Article (8) This Decree shall be published in the Official Gazette and shall take effect from the date of publication
Mohammed bin Rashid Al Maktoum
Ruler of Dubai Issued in Dubai on 30th December 2007 Corresponding to 21 Dhu al-Hija 1428 AH
Law No. (13) of 2008 Regulating the Interim Real Estate Register in the Emirate of Dubai WE, Mohammed bin Rashid Al Maktoum, Ruler of Dubai After taking into consideration Federal Law No. 7 of 1997 regarding land registration fees; Law No. 7 of 2006 regarding real estate registration in the Emirate of Dubai; Law No. 8 of 2007 concerning real estate development trust accounts in the Emirate of Dubai; Law No. 27 of 2007 on ownership of jointly owned properties in the Emirate of Dubai; Regulation No. 3 of 2006 specifying the areas where nonUAE nationals may own real properties in Dubai, and Regulation No. 85 of 2006 concerning the Register of Real Estate Brokers in the Emirate of Dubai.
Issue the following Law:
Article (2) The following words and expressions shall have the meanings set out opposite them unless the context otherwise requires: Emirate: Emirate of Dubai. Department: Department of Lands & Properties. Real Estate Register : The Real Estate Register maintained by the Department. Interim Real Estate Register : A set of documents kept in written or electronic form in the electronic register at the Department in which all contracts for the sale of real estate and other dispositions off plan are recorded before being transferred to the Real Estate Register. Real Estate : Lands and permanent structures erected on them which may not be moved without suffering damage or alteration. Real Estate Unit : The subdivided part of the real estate including any subdivisions off plan. Off Plan Sale : Sale of subdivided real estate units off plan or under construction or not yet completed. Master Developer : A person licensed to develop real estate and sell its units in the Emirate. Sub-Developer : A person licensed to develop real estate and sell its units and who develops part of a real estate project of a master developer under an agreement between them. Broker : A person engaged in real estate brokerage activities pursuant to Regulation No. 85 of 2006 regulating the Register of Real Estate Brokers in the Emirate of Dubai. Competent Authorities : The authorities concerned with licencing and registering real estate projects in the Emirate.
Article (3) The Interim Real Estate Register is used to record all disposals of Real Estate Units off plan. Any sale or other disposition that transfers or restricts title or any ancillary rights shall be void if not recorded on that Register. Any developer who made a sale or other disposition that transferred or restricted title prior to the coming into force of this Law should approach the Department to get it registered in the Real Estate Register or the Interim Real Estate Register, as applicable, within 60 days after the date on which this Law came into force.
Article (4) No Master Developer or Sub-Developer shall commence a project or sell its units off plan before taking possession of the land on which the project is to be built and obtaining the necessary approvals from the Competent Authorities in the Emirate. In all cases, the Department shall indicate in the relevant folio of the register that the Real Estate is under development.
Article (5) An application to register the Real Estate Unit in the Interim Real Estate Register shall be filed using the standard form. The
DUBAI REAL TIMES
required information and documents shall be furnished in accordance with the applicable rules and procedures of the Department.
Article (6) Real Estate Units that are marked as sold off plan and are registered in the Interim Real Estate Register maintained by the Department may be sold, mortgaged or otherwise legally disposed of.
Article (7) The Master Developer and Sub-Developer are not allowed to charge any fees for the sale, re-sale and other dispositions of Real Estate Units that have been completed or marked as sold off plan. This restriction does not apply to administrative expenses which the Master Developer and Sub-Developer charge to third parties with the approval of the Department.
Article (8) Developers must register completed projects in the Real Estate Register maintained by the Department as soon as a completion certificate has been obtained from the Competent Authorities, including any units that were sold to purchasers who have fulfilled their contractual obligations according to the applicable procedures of the Department. For the purposes of this Article, the Department may, upon request of the purchaser or of its own initiative, transfer Real Estate Units that are marked as sold off plan from the Interim Register into the purchaserâ€™s name on the Real Estate Register once the purchaser has fulfilled his contractual obligations.
Article (12) The area of a sold Real Estate Unit is correct. If the unit turns out to be bigger on completion, the developer may not claim the difference in value and if the unit turns out to be smaller then the developer must compensate the purchaser for the difference unless it is marginal in which case the developer would not be required to compensate the purchaser for the shortfall in the area.
Article (13) When the Department finds that a developer or Broker has committed an act or omission that constitutes an offence under this Law or other legislation in force, the Director General shall prepare a report and refer the matter to the competent investigating authorities.
Article (14) The Chairman of the Executive Council shall issue the regulations required to implement this Law.
Article (15) This Law shall be published in the Official Gazette and shall take effect from its date of publication.
Mohammed bin Rashid Al Maktoum
Ruler of Dubai
Issued in Dubai on 14th August 2008
Article (9) A developer who wishes to market his project through a real estate broker must first conclude a contract with a Broker who is accredited under the terms and provisions of Regulation No. 85 of 2006 concerning the Register of Real Estate Brokers in the Emirate of Dubai then the developer must get the contract registered at the Department.
Article (10) The developers or the broker cannot conclude informal contracts for the sale of Real Estate and Real Estate Units off plan in projects that have not been approved by the Competent Authorities. Every such contract made without such approval will be void.
DUBAI REAL TIMES
In the event that the purchaser defaults on any term of the contract he made with the developer for the sale of the Real Estate Unit, the developer should notify the Department accordingly and the Department will then give the purchaser 30 days notice to fulfill his contractual obligations, by hand, registered post or email. If at the end of the period referred to in item 1 of this Article the purchaser has not fulfilled his contractual obligations, the developer may cancel the contract and repay the purchaser his money less a deduction that does not exceed 30% of the monies paid by the purchaser.
Law No. (14) of 2008 Concerning Mortgages in the Emirate of Dubai WE, Mohammed bin Rashid Al Maktoum, Ruler of Dubai After taking cognisance of Federal Law No. 5 of 1985 regarding civil transactions, as amended; Federal Law No. 8 of 2004 regarding financial free zones; Law No. 7 of 2006 regarding real estate registration in the Emirate of Dubai; Regulation No. 3 of 2006 designating the areas in which non-UAE nationals may own freehold property in the Emirate of Dubai; Law No. 8 of 2007 concerning real estate development trust accounts in the Emirate of Dubai; Law No. 27 of 2007 on ownership of jointly owned properties in the Emirate of Dubai; and
The Mortgagor must be the owner of the Mortgaged Property or Property Unit and in a position to dispose of the same. The Mortgagor can be the debtor or guarantor in rem who executes a Mortgage on behalf of the debtor. Subject to Articles 22, 23 & 24 of this Law, a Mortgage over Property or a Property Unit must be shown to exist ipso facto or ipso jure off-plan when the Mortgage is made. A Mortgage may only be created over Property or a Property Unit that is capable of being disposed of.
This Law shall be called â€œLaw No. (14) of 2008 Concerning Mortgages in the Emirate of Dubaiâ€?.
Issue the following Law:
Definition & General Provisions
Article (2) The following words and expressions shall have the meanings set out opposite them unless the context otherwise requires:
A Mortgage includes all appurtenances to the Property or Property Unit including buildings, plants, assigned/apportioned properties and any improvements made after the Mortgage contract.
Emirate : Emirate of Dubai. Department : Department of Lands & Properties. Head : Head of the Department. Property : Land and permanent structures erected on it which may not be moved without suffering damage or alteration. Property Unit : The subdivided part of the Property including any subdivisions shown off-plan. Real Estate Register : A set of documents kept in written or electronic form at the Department which provide an up-todate record of real rights in Property. Interim Real Estate Register : A set of documents kept in written or electronic form at the Department in which all contracts for the sale of Property and other legal dispositions off-plan are recorded first before being transferred to the Real Estate Register. Mortgage : A contract whereby a creditor acquires security overProperty or a Property Unit for the repayment of his debt, ahead of ordinary creditors and lower ranking creditors, from the value of the Property wherever located and by whomso ever held. Mortgagor : The owner of the Property or the holder of the right in-rem or personal right under the contract of sale signed with the owner of the Property which is marked as sold off-plan and is registered in the real estate register or the interim real estate register. Mortgagee : A creditor who lends money to a mortgagor against the security of Property that exists ipso facto or ipso jure.
A Mortgage is not valid unless it is registered with the Department and any agreement to the contrary is void. The Mortgagor shall bear the costs of the contract unless otherwise agreed by the parties.
The Mortgage must secure a debt that is owing or promised at the conclusion of the Mortgage.
The provisions of this Law apply to the Mortgage of Property and Property Units as security for debt. It makes no difference whether the debt is secured by a charge over the whole of the Property or over an undivided interest therein or by right inrem or personal right over a Property marked as sold off-plan.
Article (4) The Mortgagee/creditor should be a bank, company or financial institution that is duly licenced and registered with the UAE Central Bank to provide finance for Property in the UAE.
Article (8) Mortgage applications shall be filed with the Department and shall be signed by the Mortgagor and Mortgagee or the guarantor in rem, if any, including the following particulars: All information related to the Property Value of the Property Value of the debt Mortgage term Personal details of the Mortgagor, Mortgagee and guarantor in rem including domicile and place of residence. The mortgage contract shall be signed using the standard form of the Department and the Real Estate Register or Interim Real Estate Register, as the case may be, shall be updated accordingly. The ranking of the Mortgage is determined by its date of registration. The Department shall give the contracting parties a mortgage deed bearing the signature of the competent officer and the seal of the Department. The mortgage deed can be in electronic form and is admissible as evidence on the same basis as a written mortgage deed.
Article (9) Section Two
Legal Effects of Mortgage Article (10) The Mortgagor shall not sell, gift or otherwise dispose of the Mortgaged Property Unit or Property or create any right in-rem or personal right over the Mortgaged Property Unit or Property without the approval of the Mortgagee and subject to the
DUBAI REAL TIMES
Law No. 13 of 2008 regulating the interim real estate register in the Emirate of Dubai
assignee agreeing to take over the obligations of the Mortgagor under the mortgage contract. The Mortgagee may in the mortgage contract stipulate joint liability of the mortgagor and assignee for those obligations.
A person shall be deemed in possession of the Property if he acquires title to the Property after it has been mortgaged or acquires any other right in- rem or personal right over the Property.
If a clause in the mortgage contract gives the Mortgagee title to the Mortgaged Property when the Mortgagor fails to pay the mortgage debt within the specified period or provides for the sale of the mortgaged Property without taking the statutory steps, the Mortgage shall be considered valid but in either case the clause is void. The clause is also void if included in a subsequent agreement.
The Mortgagor will guarantee the mortgaged Property and keep it in good condition until the debt is repaid. The Mortgagee may protest any deficiency in the guarantee and take whatever legal action is necessary to protect his rights and recover the costs from the Mortgagor.
A Mortgage terminates upon repayment of the secured debt.
The Mortgagor has the right to administer his mortgaged Property and collect its yield and revenue until it is foreclosed and sold at a public auction upon default of paying the debt.
Special Mortgages Article (21)
Where loss or damage occurs to the mortgaged Property, the Mortgage shall attach to substitute assets and the Mortgagee may cover his claim from those assets in the order of its priority.
A Musataha holder may mortgage buildings or plants over the term of the Musataha without having the right to mortgage the land that is to be developed unless otherwise agreed.
The debt may only be covered out of the mortgaged Property and the guarantor in kind may not seek recourse against the debtorâ€™s assets before enforcement against the mortgaged Property.
Article (15) The Mortgagee may assign his rights subject to the consent of the debtor. The assignment deed shall be registered with the Department. The Mortgagee/creditor can, up to the value of his debt, assign the rank of his Mortgage to another creditor having a security interest in the same Property.
Article (16) A Mortgage secures only the amount specified in the mortgage contract unless otherwise provided by law or agreement.
DUBAI REAL TIMES
The rank of a Mortgage is determined by the serial number under which it is registered with the Department. In case several applications are submitted at the same time to register a Mortgage against the same debtor and over the same Property, the Mortgages shall be registered under the same number and those creditors shall rank equally in the distribution of auction proceeds.
Article (18) A Mortgagee/creditor may follow the mortgaged Property into the hands of any person in possession thereof in order to obtain payment of his claim when due according to rank.
Article (22) The holder of usufruct or long term lease for a term between 10 and 99 years may Mortgage his interest in the Property or Property Unit for the term of the usufruct or long term lease.
Article (23) A Mortgage over rights of musataha, usufruct or long term lease shall terminate and be deleted from the register upon repayment of the debt secured by the Mortgage or upon expiry of the term of the musataha, usufruct or long term lease.
Article (24) The purchaser of Property Units or Property that are marked as sold off-plan or are under construction may mortgage them as security for the debt provided that those units or Property are registered in the Interim Real Estate Register maintained by the Department.
Execution Proceedings on the Mortgaged Property Article (25) Upon default in payment of the debt when due or upon fulfillment of a condition granting early repayment status, the Mortgagee/creditor or his universal or singular successor must provide the debtor or person in possession of the mortgaged Property or Property Unit 30 days notice through the Notary Public before commencing execution proceedings.
Article (34) The Head of the Department shall issue the decisions necessary for implementing this Law.
Article (35) This Law shall be published in the Official Gazette and shall take effect 60 days after publication.
Subject to the preceding Article, the execution judge may, upon request of the debtor or his guarantor in rem, postpone the sale by public auction for up to 60 days and for one time only if he finds that: the Mortgagor/ debtor will be able to repay his debt if given this period. sale of the mortgaged Property or Property Unit will cause the debtor substantial damage.
Mohammed bin Rashid Al Maktoum
Law No. 33 of 2008
Subject to Articles 25, 26 & 27 of this Law, failure to pay the debt within the stipulated period will cause the mortgaged Property to be sold by public auction in accordance with the applicable procedures of the Department within 30 days after the end of the relevant period referred to in either article.
Article (29) The debtor or his guarantor in rem may repay the secured debt and its ancillaries before the due date.
Article (30) The claims of Mortgagees/creditors shall be paid out of the price of the Property Unit or Property or out of the substitute assets in order of priority even if the Mortgages had all been registered the same day. If the sale proceeds are not sufficient to cover the claim of a creditor, such creditor can claim the difference from the debtor.
Ruler of Dubai
Issued in Dubai on 14th August 2008 13 Shaban 1429 Hegira RERA does not take responsibility for any views expressed here.
Issued by us in Dubai on 4 January 2009
Amending some provisions of Law No. 26 of 2007 Regulating Relationship Between Landlords & Tenants in the Emirate of Dubai We Mohammed Bin Rashid Al Maktoum, Ruler of Dubai • After perusal of Federal Law No. 5 of 1985, regarding Civil Transactions and its amendments, • And Federal Law No. 10 of 1992 Promulgating Law of Evidence in Civil and Commercial Transactions and its amendments, • And Law No. 16 of 2007, establishing the Real Estate Regulatory Agency, • And Law No. 26 of 2007 Regulating Relationship Between Landlords & Tenants in the Emirate of Dubai (referred to as the “Original Law”), • And Decree No. 2 of 1993, establishing the Special Judicial Committee to settle Disputes between landlords and tenants and its amendments,
Issue the following Law:
The Civil Transactions Code (Federal Law No. 5 of 1985), as amended, and the Civil Procedure Code (Federal Code No. 11 of 1992) shall apply to any matter for which no provision is made in this Law.
Articles (2), (3), (4), (9), (13), (14), (15), (25), (26), (29) & (36) of the Original Law shall be replaced with the following Articles:
In implementing provisions of this law, the following words and terms shall have the meaning assigned to them, unless the text otherwise requires: Emirate : Emirate of Dubai. Committee : The Judicial Committee authorised to settle deputes between landlords and tenants. Agency : Real Estate Regulatory Agency. Property : mmovable property and its annexures rented for residential, commercial or professional purposes or any other legal activity. Tenancy Contract : The contract by which landlord is committed to enable tenant to benefit from the property for
Property granted by the government to UAE citizens and such-like persons for commercial and residential purposes is excluded under this Law and is subject to the applicable orders and directives of the Ruler and the decisions in implementation thereof.
Article (33) Mortgage deeds that are duly registered pursuant to this Law are binding upon third parties.
DUBAI REAL TIMES
If the Mortgagor/debtor or his universal or singular successor or the guarantor in rem fails to pay the Mortgage within the period specified in the preceding Article, the execution judge shall, upon request of the Mortgagee/creditor order an attachment against the mortgaged Property so that it can be sold by public auction in accordance with the applicable procedures of the Department.
specified purpose and period against specified consideration. Landlord : Natural or Judicial person who has, by law or consent, the right of disposal of the property and to whom the title of the property is transferred during tenancy period or to his representative or legal attorney, including the tenant authorized by the landlord to sublease the property. Tenant : Natural or judicial person who benefits from the property, or part thereof, pursuant to a tenancy contract and any person who receives the tenancy legally from the tenant. Subtenant : Natural or judicial person who benefits from the property, or part thereof, in accordance with a tenancy contract signed with the tenant. Rent : Specified consideration which the tenant is bound to pay according to the tenancy contract. Notification : Written notification sent by either of the tenancy contract to the other party through notary public, registered mail, personal delivery or by any technological means approved by law.
Article (3) This law shall be applicable to leased lands and properties in the Emirate, excluding free accommodations provided by natural or judicial persons to their employees.
Article (4) • •
The tenancy relationship between landlord and tenant shall be governed by a tenancy contract describing the property in detail, the purpose of the tenancy, period, rent and name of owner if the owner is not the landlord. All properties subject to this law, or its amendments, are to be registered with the Agency.
Article (9) • •
Landlord and tenant must specify rent value in the tenancy contract. If both parties have not specified the same or if it becomes impossible to prove their agreement then rent shall be as per the similar rent. The Committee shall specify the similar rent in accordance with the standards of specifying the rent increase percentage applied by the Agency and in accordance with the general economic circumstances in the Emirate, and pursuant to the property status, the similar market rent in the same area and in accordance with any valid legislation in the Emirate regarding properties’ rent and any other factors the Committee may decide.
DUBAI REAL TIMES
For the purpose of renewing tenancy contract, landlord and tenant upon expiry of the tenancy contract may amend any of the contract’s terms or review the rent whether by increase or decrease. If the parties do not reach an agreement regarding this, the Committee may decide fair rent considering the standards referred to in Article No. (9) of this Law.
Article (14) If either party of tenancy contract wishes to amend any of its conditions pursuant to Article (13) of this Law, then he must notify the same to the other party not less than 90 days prior to expiry date, unless both parties agreed otherwise.
Article (15) Landlord shall be committed to hand over the property in good condition that enables tenant to obtain the benefit subject of the tenancy contract. However, it could be agreed to lease uncompleted property provided that the tenant completes the same and prepares it in a good condition to obtain the requested benefit, and the parties shall decide the party who will be liable for the costs of this completion.
Article (25) 1 Landlord may demand eviction of tenant prior to expiry of tenancy period in the following cases: h. If tenant fails to pay rent value, or part thereof, within thirty (30) days of landlord’s notification for payment; unless parties agreed otherwise. i. If tenant subleases the property, or part thereof, without landlord’s written approval and in such case eviction shall be applicable to the tenant and the subtenant, and the subtenant’s right to refer to tenant for compensation shall be reserved. j. If tenant uses, or allows others to use, the property for illegal or immoral activities. k. If the leased property is a commercial shop and the tenant left the same without occupation and without legal reason for 30 continual days or 90 non-continual days in one year; unless the parties agreed otherwise. l. If tenant causes changes that endanger safety of the property in a way that it cannot be restored to its original condition or if he causes damage to the property intentionally or due to his gross negligence to take proper precautions or if he allows others to cause such damage. m. If tenant uses the property for purposes other than the purpose it was leased for or if he uses the property in a way that violates planning, building and land using regulations. n. If the property is in danger of collapse, provided that landlord must prove such condition by a technical report issued by Dubai Municipality or accredited by it. o. If tenant fails to observe legal obligations or tenancy contract conditions within (30) days from date of notification by landlord to abide by such obligations or conditions. p. If development requirements in the Emirate require demolition and reconstruction of the property in accordance with government authorities instructions. And for the purpose of this clause (1) of this Article the landlord must notify the tenant through the Notary Public or by registered mail. 2 Landlord may demand eviction of tenant upon expiry of tenancy contract limited to the following cases: a. If the owner wishes to demolish the property for reconstruction or to add new constructions that prevent tenant from benefiting from the leased property, provided that necessary licences are obtained. b. If the property requires renovation or comprehensive maintenance which cannot be executed while tenant is occupying the property, provided that a technical report issued by Dubai Municipality or accredited by it is to be submitted to this effect.
c. If the owner of the property wishes to recover the property for use by him personally or by his next of kin of first degree provided that he proves that he does not own a suitable alternative property for that purpose. d. If the owner of the property wishes to sell the leased property. And for the purpose of clause (2) of this Article, landlord must notify tenant with reasons for eviction at least twelve months prior to the determined date of eviction subject that such notice be sent through the Notary Public or by registered mail.
There should not be any rent increase in 2009 for tenants who were leasing property units in 2008, which includes residential and non-residential properties, if the rent in 2008 was equal to or 25% or less below the average similar rent.
n. If the rent value in year 2008 was 26% to 35% less than the average similar rent; the maximum rent increase shall be equal to 5% of such value.
Article (29) Tenant shall have priority to return to the property if it is demolished and reconstructed or if it is renovated, provided that rent value shall be fixed in accordance with Article (9) herein. Tenant shall benefit from the above mentioned priority right within thirty (30) days from being notified by landlord.
Article (36) The Chairman of the Executive Council shall issue the necessary regulations, bylaws and decisions to implement the provisions of this Law.
Article (2) This Law is to be published in the Gazette and enforced on the date thereof.
Issued by us in Dubai on 1 December 2008
Decree No. 1 of 2009 Regarding Rentals in the Emirate of Dubai We, Mohammed Bin Rashid Al Maktoum, Ruler of Dubai After perusal of Law No. 16 of 2007 establishing the Real Estate Regulatory Agency, And Law No. 26 of 2007 regulating Relationship Between Landlords and Tenants in the Emirate of Dubai as amended, And Decree No. 2 of 1993 establishing Special Judicial Committee for settlement of disputes between landlords and tenants, as amended, And Decree No. 27 of 2007 regarding rentals in the Emirate of Dubai. Issue the following Decree:
As an exception to the provisions of Article (1) of this Decree, the maximum rent increase percentage of property units in the year 2009 for tenants who were leasing such units in 2008 shall be as follows:
o. If the rent value in year 2008 was 36% to 45% less than the average similar rent; the maximum rent increase shall be equal to 10% of such value. p. If the rent value in year 2008 was 46% to 55% less than the average similar rent; the maximum rent increase shall be equal to 15% of such value. q. If the rent value in year 2008 was less than 56% of the average similar rent; the maximum rent increase shall be equal to 20% of such value.
Article (3) For the purpose of this Decree the similar rent value of the property unit means pursuant to â€œThe Rent Index of the Emirate of Dubaiâ€? applicable on the date of renewing the tenancy contract.
Article (4) The similar rent value shall be set pursuant to the Rent Index of the Emirate of Dubai which is attached to this Decree. The Real Estate Regulatory Agency shall review and update the Rent Index of the Emirate of Dubai periodically.
Article (5) The Real Estate Regulatory Agency shall coordinate with the Special Judicial Committee for settlement of disputes between landlords and tenants to set the relevant procedures to implement the provisions of this Decree.
Article (6) Any other provision in any other local legislation shall be void to the extent it contradicts with the provisions of this Decree.
Article (7) This Decree shall be published in the Gazette and enforced on the date thereof.
Law No. (9) of 2009
amending some provisions of Law No. (13) of 2008 Regulating the Interim Real Estate Register in the Emirate of Dubai
DUBAI REAL TIMES
If the Committee decided for the landlord to recover the property for his own use, or use by his first degree next of kin pursuant to the provision of paragraph (c) of clause (2) of Article (25) of this Law, then landlord shall not rent the property to others for at least two years for residential properties and three years for non-residential properties from date of recovery of the property, unless the Committee decides less period for reasons considered by it, otherwise the tenant shall have the right to request the Committee to order proper compensation to him.
We, Mohammed bin Rashid Al Maktoum, Ruler of Dubai After taking into consideration Law No. (8) of 2007 Concerning Guarantee Accounts of Real Estate Developments in the Emirate of Dubai; Law No. (16) of 2007 establishing the Real Estate Regulatory Agency; Law No. (13) of 2008 Regulating the Interim Real Estate Register in the Emirate of Dubai (hereinafter referred to as the “Original Law”).
Issue the following Law:
DUBAI REAL TIMES
Articles 2 and 11 of the Original Law shall be replaced with the following text: Article (2) The following words and expressions shall have the meanings set out opposite them unless the context otherwise requires:
Emirate of Dubai. Emirate : Department : Department of Lands & Properties. Establishment : The Real Estate Regulatory Agency Real Estate Register : The Real Estate Register maintained by the Department. Interim Real Estate Register : A set of documents kept in written or electronic form in the electronic register at the Department in which all contracts for the sale of real estate and other dispositions off plan are recorded before being transferred to the Real Estate Register. Real Estate : Land and permanent structures erected on it. Real Estate Unit : The subdivided part of the real estate including any subdivisions off plan. Off Plan Sale : Sale of subdivided real estate units off plan or not yet completed. Master Developer : A person licensed to develop real estate and sell its units in the Emirate. Sub-Developer : A person who develops part of a real estate project of a Master Developer under an agreement between them. Broker : A person engaged in real estate brokerage activities pursuant to Regulation No. 85 of 2006 regulating the Register of Real Estate Brokers in the Emirate of Dubai. Competent Authorities : The authorities concerned with licensing and registering real estate projects in the Emirate.
Article (11) 1. In the event that a purchaser defaults on any term of the
contract he made with the Developer for the sale of a Real Estate Unit, the Developer should notify the Department accordingly and the Department will then give the purchaser 30 days notice to fulfill his contractual obligations, by hand, registered post or email. 2. If at the end of the period referred to in sub-clause 1 of this Article the purchaser has not fulfilled his contractual obligations, the following provisions should apply: a. If the Developer has finished not less than 80% of the real estate project then the Developer may retain all amounts paid and request the purchaser to pay the outstanding amounts of the contract value. If this not possible the Developer may request the sale of the real estate at a public auction to obtain the outstanding amount. b. If the Developer has finished not less than 60% of the real estate project then he may terminate the contract and forfeit not more than 40% of the real estate unit value as mentioned in the contract. c. If construction of real estate projects has commenced but has not reached 60% the Developer may terminate the contract and forfeit not more than 25% of the real estate unit value as mentioned in the contract. d. In projects where construction has not commenced for reasons outside the Developer’s control and without any neglect from his side the Developer may terminate the contract and forfeit not more than 30% of the amounts paid by the purchaser. 3. For the purpose of paragraphs c and d of sub-clause (2) “construction” means that the Developer has taken possession of the real estate project site and has commenced construction works as per the designs authorised by the Competent Authorities. 4. For the purpose of paragraphs b, c and d of sub-clause (2) the Developer must return the due amounts to the purchaser within one year from the date of termination or within 60 days from the date of resale of the real estate unit whichever first occurs. 5. Notwithstanding what is mentioned in sub-clauses 1 and 2 of this Article the Establishment pursuant to a report may decide to cancel the real estate project and in this case the Developer should return all amounts collected from purchasers as per the procedures and provisions stated in Law No. 8 of 2007 concerning guarantee accounts of real estate developments in the Emirate of Dubai. 6. The provisions mentioned in this Article do not apply to plot sale contracts where off-plan sales in the plot have not commenced as in such case it remains subject to the terms mentioned in the contract entered between the two parties. 7. The provisions of this Article apply to all contracts entered into before this Law came into effect.
Article (3) This Law shall be published in the Official Gazette and shall take effect from its date of publication.
MOHAMMED BIN RASHID AL MAKTOUM RULER OF DUBAI Issued in Dubai on 12 April 2009.