Monday, June 04, 2007

Dubai Land Department weeds out unscrupulous brokers

The Land Department will shortly be empowered to adjudicate on all disputes arising between real estate agents and property owners as Dubai moves to clean up the market from unscrupulous brokers.

Such disputes are currently handled by the local courts, which more often than not lead to lengthy delays in arriving at judgments.

In a related move, the Land Department will ensure that a real estate agent is bound by a proper contract in his dealings rather than the 'verbal' deals which are favoured by many.

"At the moment, brokers are not using any type of contract. So we could not take any action since the paper work was not there. Now we can," says Khamis Mohammad Al Muhairi, Head of Land Valuation and Studies Centre, Dubai Land Department.

The real estate brokerage law was passed in May 2006. A deadline was set for December 2006 for real estate brokers to be registered in Dubai. But brokers complained about insufficient time allotted to them and the Land Department has extended the deadline to July 2007.

The new procedures are in line with Dubai's 'get tough' attitude with errant agents and efforts to stamp out their influence in the market.

Many unsavoury practices still take place as Dubai’s freehold surge continues to bring in a new class of property owners who may not be well versed in all the legal and procedural requirements. They are often unwitting victims of such agents and only realise their mistake way too late.

The Land Department is aware of the problem and has already initiated a series of path-breaking steps. These include compulsory registration of all agents if they are to practice their trade, and issuing of broker cards.

"Our main task at the moment is to bring everything under the umbrella of regulation, not to do the process quickly or slowly," says Al Muhairi, who is at the helm of setting up the regulatory framework for the real estate brokerage industry.

"The main problem behind all the issues is the lack of a legal document. The biggest issue is that one project has 10 brokers claiming a stake in the deal and that too with no proper documentation. People have been sitting in their majlis concluding deals. This will stop."

Al Muhairi has a timetable in place to work out a RQS (registration-qualification and training-segmentation) module based on best industry practices from other jurisdictions. These are then fine-tuned to suit the local environment.

"Australian cities have their system well structured. From an RQS perspective, they press on awarding class distinctions within the brokerage industry. But for that we have to have be level with our initial steps, only then can we get into segmentation," says Al Muhairi.

"It is a fact that when a regulatory law comes into place the structuring of an ethical framework begins. There are always modifications and additions."

[Source : Property Weekly]

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