DUBAI // The real estate authority has warned brokers they will be fined, suspended or banned if they flout government rules on registration and transparency.
The latest caution from the Dubai Land Department came during the Cityscape property conference on Sunday where officials spoke of strengthening the sector to improve the emirate’s image by 2020.
“Brokers who do not respect laws and regulations have been fined Dh50,000, it can reach Dh1 million; yes, some have been banned,” said Naser Sulaiman, chief legal specialist with Real Estate Investment Promotion, the department’s investment arm.
“Any broker who violates provisions will pay fines of Dh50,000 because as per law brokers must be licensed and registered, pass tests of the Dubai Real Estate Institute, complete all documentation required for a transaction. Brokers should be mediators between buyers and sellers, share data without bias.”
Non-compliance will lead to a notification, warning, suspension for six months and finally blacklisting.
“We have these conditions because if someone comes here for the first time and to his bad luck meets the wrong person who shows him nice brochures but the project is not registered and this person should not be receiving money, then it affects Dubai’s image,” Mr Sulaiman said.
A separate unit to deal specifically with rental issues has recently been set up within the Land Department. Details will be released later.
Sultan Butti Bin Mejren, director general of the Dubai Land Department, said Dh155 billion was invested in real estate until September this year.
“We expect it to exceed Dh200 billion and expect growth to be continuous through Expo 2020,” he said. “Dubai will remain the finance and business centre. That is why in coming years we look at brokers as important partners. We call for prudence from brokers to deal with data correctly and not sell property without authorization of the Land Department.”
Officials said brokers aware of structural faults must convey this to potential buyers, decline money in their name and if they did cannot invest this elsewhere.
“If he does not communicate knowledge about a house about to collapse, the compensation to the buyer will be deducted from the broker’s fee. If a broker receives an expensive watch from a buyer or seller, he will not be entitled to his fee,” Mr Sulaiman said.
Respecting client privacy by not revealing or selling their phone numbers was vital.
“He must receive fees only when the transaction is fully completed and the contract is registered; not before this,” Mr Sulaiman said. “If his guidance has not led to a successful conclusion then he cannot claim fees.”
About 5,021 brokers are registered in Dubai, but experts said the number of unregistered brokers was high and called for the implementation of laws.
“Whether the Land Department does random checks, makes random viewings that could be a good start,” said Sam McCone, managing director of McCone Properties. “More needs to be done to ensure the agents who are actually doing everything right, benefit from this than those who freelance. We need to get buyers and sellers aware of their rights; if this is done by the Land Department or a government agency it would carry a lot more weight.”
Action against erring brokers was important, experts said.
“Penalties and fines need to be readdressed, we need to remember there are agents out in the market place who are still not registered,” said Mario Volpi, managing director of Prestige Real Estate.
“This creates problems because if these people don’t behave in a professional manner it causes problems for the consumer, the whole industry gets a bad name.”
Ken Yorston, a senior regulatory services manager from the UK, suggested the government take a strong lead.
“If people are proactive and make complaints and these are taken up, then misbehaviour can be driven out,” he said. “How many have been investigated and banned, this should be shouted about.”
rtalwar@thenational.ae
