Tuesday, January 06, 2009

RERA introduces new regulations to streamline realty sector

Dubai's Real Estate Regulatory Authority (RERA) has introduced a new regulation, wherein the property developers in Dubai would be ranked on the basis of their financial stability and market experience.

Developers registering off-plan projects will henceforth be required to completely own the land first, before registration of the properties, states the new regulation.

The regulation aims to reduce the number of developers and to give RERA a better hand in re-instilling investor confidence amidst falling prices, fraudulent and contractual disputes hitting the sector.

According to another new Regulation passed by RERA last week, aimed in streamlining the property sector, developers in Dubai are not allowed to collect more than 20 percent of the cost of property from the buyer prior to construction.

Head of Trust Accounts, Essa Saeed Ahmed Al Mansoori at RERA's Real Estate Development Trust Account Department said that an 11-member team will monitor the construction process and ensure that the escrow amounts are collected in accordance with the schedule.

RERA continuing to introduce new regulations aiming to streamline the real estate sector of the emirate and protecting all concerned parties involved in property transactions, other emirates where property sector is witnessing considerable growths, too, are following suit.

A Real Estate Regulatory Authority is likely to be established in Abu Dhabi within next couple of months. Ajman Government too, plans to introduce an agency similar to Dubai RERA.

The Federal National Council (FNC) is in the process of preparing draft legislation aiming to regulate the property sector in the country and protect UAE by restricting expatriates from automatically acquiring residency visas through freehold property ownership, so as to reduce dependency on foreign labour.

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