Tuesday, August 28, 2012

Dubai working on new law to protect investors, and care for developers

The Dubai Land Department has asked the real estate developers to review the draft code of Corporate Governance for Developers, after seeking opinion from public on Real Estate Investor Protection Law last month.

The department has asked all real estate developers to review and share their opinion on the draft code.
The Land Department had last year announced that it is likely to mandate all developers (master and sub-developers) to follow the Code for Corporate Governance from 2013.  

The code, developed by Hawkamah, the Institute for Corporate Governance, together with the department, outlines the responsibility of the developer to ensure that they disclose alternatives available for prospective investors in cases of delay in completion or handover.

The draft also suggests that all developers will have to appoint a dedicated investor relations officer, who deals with enquiries of individual and institutional property investors.

Further, developers will have to ensure that sales and purchase deal for built-up and off-plan properties reveal complete information about the property, including parking space, common areas and service charges.

The draft code also proposes that buyers be provided with comprehensive document containing complete information about purchased property, resident etiquette, the person to be approached in case of maintenance issues, information on the owners association and association manager, developer’s warrantee, information on community, where the property is located.

In cases of off-plan properties, developers will have to provide complete information about the property to registered brokers or selling agents or prospective buyers, which include project description, infrastructure information and utilities, with complete details of the property.

Another suggestion in the draft code is that the developer selling off-plan property should try obtaining a “credit rating” agency to improve investor confidence levels

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