Dubai is looking to introduce a raft of new laws this year to give property investors more protection and allow the market to begin trading in new ways. The news just came in the form of a newsletter from
Al Tamimi & Co
, which works closely with the
Dubai Land Department
Emad Eldin Farouq
, the chief legal advisor to the DLD, says in the newsletter: "There are lessons to be learned from the crisis and we are emerging with a new legal regime. Loopholes in laws are being dealt with, and things will become more organised in 2010. We have a good training programme in place this year through the Dubai Real Estate Institute, for our own staff and outside practioners. Additioanl resources will be brought to fully implement the new laws and systems. We will seek to fully enforce regulations against developers, brokers and ouany others found to be in violation."
In the note,
, the head of the property practice, details the new laws.
Conversion of granted title to free hold title
This would allow Emiratis with land granted to them by the government to convert it to a freehold title, allowing them to sell it to another Emirati or GCC national or mortgage the property, according to Ms Dale.
"The granted land system is a tradition in the UAE enabling nationals to have access to lands for the purpose of building their home or business premises," she said.
"However, the system is quite limiting as there are restrictions on transacting with such land. If you upgrade your title from granted to freehold, you can sell the property to other UAE or GCC nationals, or you can put it into a property fund or mortgage it - it becomes a much more flexible asset."
Further protection for purchasers of off-plan property
These include a refund, or replacement property, for buyers where the developer delivers a defective property and financial penalties for late delivery of property.
The laws would also establish the grounds upon which a purchaser may demand cancellation of the contract if, for instance, the developer refuses to link payment plans with construction milestones.
"The investor protection law is being proposed to deal with some specific issues identified last year where investors needed further assistance in dealing with errant developers," Ms Dale said.
Regulation of property valuers and property conveyancers
These positions, which relate to the final processes of buying a home, will now require a license from the authorities to operate in Dubai. This new law would bring some much needed light on a grey area in the property market.
Property brokers trust account law
In some sales, the property broker will act as the middle-man between a buyer and seller and hold onto the cash. The problem is that many of these brokers deposit this money into accounts in their own name, creating a risk that the account becomes available to creditors or other parties. This law will require the property broker to use the services of a licensed escrow agent.
Strata law implementing regulations
The long-awaited regulations for the strata law - which governs how owners in a building handle common property - are expected out this year. The Land Department is expected to "shortly issue the General Regulation", he said.
Establishment of property portfolios
A new law will "introduce for the first time in Dubai a legally recognised, regulated structure for the establishment and management of collective investment schemes analogous to the typical property fund and trust structures that exist in other jurisdictions". This would "potentially provide a boost to the Dubai property market by generating an increased level of collective investment activity".