News
Dubai’s Real Estate Regulatory Authority (RERA)
Posted on 06/30/08
The formation of Dubai's Real Estate Regulatory Authority (RERA) in July 2007 is helping to shape a previously uncontrolled market into an organized global property market with market watchers projecting that by the end of 2008, Dubai real estate will be in a legal position similar to most global markets, and its electronic land registry ahead of many markets.
Recently announced was a 5% rent cap for 2008, representing a gradual reduction which started at 15% in 2006, and then to 7% in 2007. This is seen as typical of Dubai's pragmatic approach to managing economic development, as opposed to an abrupt rent freeze. RERA licenses 400+ developers active in the Dubai market, and is responsible for imposing the escrow account law, which requires developers to deposit funds for off-plan apartment projects into a separate account, unless given special dispensation by RERA, protecting the interests of both parties: the buyer knows that funds are correctly held on deposit; and the developer is protected from making poor investments with the money.
RERA is working with the Dubai Land Department, the real estate title registry, in registering freehold titles of property sold to date in Dubai, and recently warning property owners that registrations after mid-2008 will be based on a percentage of the market and not original selling price. Legislation on mortgages and multiple occupancy of buildings is expected this year to clarify the rights and obligations of both banks and borrowers.