Time for reading: 10 min
The demand for buying and renting residential real estate in Dubai has been steadily growing in recent years. First of all, this is due to the increase in the population of Dubai and the continuous influx of foreign citizens. This factor undoubtedly indicates the growth of the emirate’s economy. The significant performance of the Dubai real estate market in the country’s economy has attracted the attention of the government to create a more defined legislative system to protect everyone involved in the process of property buying and selling. This led to the creation of the Real Estate Regulatory Agency (RERA) in 2007.
RERA is one of the regulatory divisions of DLD, which sets the rules and provisions for the Dubai real estate market. These rules include many things: from the laws on buying and renting real estate in Dubai, to the legalization and registration of various real estate-related contracts with the help of RERA. The main objective of RERA is to create conditions for favorable cooperation of landlords, tenants, brokers, developers and other participants in the processes related to real estate in Dubai by creating a unified and effective legal environment in this sector. Other RERA’s objectives include following:
RERA regulates the Dubai real estate market by authorizing property developers, property management companies, real estate agents (brokers) and landlords. This means that everyone, who wants to sell or rent properties, has to register with RERA to become legally certified (license). Therefore, investors and those who are going to buy property in Dubai can check the registration of the person or company selling the property.
To optimize the interaction of all parties and ensure the concept of transparency, RERA has created an online community. Under the leadership of DLD, RERA has launched many applications and websites, the main task of which is to make life easier for everyone who is engaged in real estate in Dubai. These applications and websites in the field of real estate were presented at the 36th edition of GITEX Technology Week back in 2016 and have already proven their effectiveness to date. All apps are available for download on Android and IOS.
In short, the creation of RERA in Dubai provides protection for interested buyers and investors, which increases the transparency of real estate transactions. Among the main aspects of the impact of RERA after its creation, the following can be distinguished:
Smart Pay service is a payment application developed by DLD. Through secure government channels, the app allows people to pay for real estate through different methods such as Credit Cards, Wire Transfer (From Limited Banks) and NQOODI Wallet. The application was created with the intention of facilitating the implementation of payment processes ensuring transparency and security, as well as providing new systems for customers in accordance with the Dubai 2021 development plan. The main features of Smart Pay Service include:
The main advantage of this application is that it allows customers to pay without having to go to the bank. All transactions can be carried out through the application on a smartphone or other electronic device.
Dubai Brokers is an application provided by DLD for real estate agents, investors and brokers. With him, one can find out accurate information about brokers that are licensed by the DLD and their offices in real-time. The main feature of this application is that it verifies ownership certificates, thereby speeding up the process of providing services and reducing the costs paid by people. Dubai Brokers also has a built-in function that classifies brokers in terms of their performance and provides detailed information about the projects that a particular broker specializes in.
The main services provided in the application also include:
In this way, Dubai Brokers helps investors in selecting highly qualified real estate brokers.
Investment Map is an online portal about real estate in Dubai, a reliable information platform for investors, brokers, developers, and property owners. It was developed by the Real Estate Investment Management and Promotion Center, the investment arm of DLD. The map not only provides the ability to find information about properties for sale or for rent but also allows users to interact with property owners, brokers and management companies directly and make sales transactions online. All of these e-services are designed and operated in accordance with a number of laws and regulations adopted by the DLD.
The map is linked to a website, where all the processes related to the sale and transfer of ownership of real estate for electronic payment are displayed. All financial transactions are processed through the electronic payment gateway, which provides users with security when making transactions online.
The Investment Map has a system that provides answers to some questions and comments from users. In addition, the portal contains information about the requirements and rules for buying and renting property. The map shows the regions that may be of interest to a particular user and the nearby attractions. Thus, the Investment Map focuses on providing users with all the necessary information about the real estate they want to buy or rent.
The Smart Judge app is one of the technologies developed by DLD. The Smart Judge app provides individuals who are parties to a rental agreement with the opportunity to learn about their legal rights to file claims before any legal proceedings. One of the main features of this app is a smart judicial mechanism for people making inquiries. Thus, individuals have the opportunity to get free advice on certain legal issues. The app also provides a virtual court decision, in case of a final request for legal advice. To get a consultation, one needs to follow a few simple steps:
This application promotes the development of a secure and stable information environment in the rental property sector in Dubai.
As mentioned earlier, all real estate management companies, brokers and landlords are required to be registered with RERA and obtain a license, without which subsequent real estate transactions will be considered illegal. Therefore, RERA not only ensures the security for tenants, but also becomes the main, and most importantly, reliable source of real estate information for tenants in Dubai.
This body has established a number of laws that regulate the relationship between the landlord and the tenant, according to which there are clearly established parameters of lease agreements, which ensures effective interaction between both parties. In this case, before signing the contract, all the rights and obligations of all parties are stipulated in advance, after which they are entered directly into the lease agreement. According to article 14 of the Dubai Rental Law, if the landlord or tenant wishes to change the terms of the contract, they must notify the other party at least 90 days before the expiration of the contract. In addition, the agreement stipulates that in accordance with section 4 of Law (33) of 2008, the lessee or landlord is required to register in RERA through Ejari.
It is worth mentioning that in 2019, the Dubai rulers issued new laws on RERA and made legal changes regarding its duties and activities that were in force since 2007. According to one of these laws, since 2019, the DLD replaces RERA in the registration of real estate lease agreements and the regulation of relations between landlords and tenants as well as in any other matters related to real estate lease agreements. Thus, tenants and landlords need to take into account that now it is DLD that deals with specific issues regarding the registration of a lease agreement.
Note: Ejari is an electronic registration system that is designed to meet legal requirements, as well as to regulate and control the rental market in the Emirate and protect the rights of all participants in rental transactions. Without registration or renewal in Ejari, the lease agreement is considered invalid. In addition, without Ejari, none of the parties will be able to defend their rights in court, in case of a dispute.
To register with RERA and obtain a license, all those who deal with real estate must meet certain requirements. The requirements for obtaining a broker’s license include completing a course on professional training of brokers. This course is presented by the Dubai Real Estate Institute (DREI), the educational arm of the DLD in collaboration with the Real Estate Licensing Department in RERA. The course is developed on an academic basis and is aimed at improving the efficiency of people working in the real estate market. In addition, the course studies important related topics such as real estate finance and advanced skills in sales and rental. One can attend classes both in the RERA Agent Registration Training Center or online.
Completion of the real estate agent empowerment course is a mandatory requirement to obtain/renew a broker’s license. The course consists of a 12-hour training program and is conducted in the form of exams, legal and ethics questions. This includes questions regarding property transfer procedures, uniform contract forms for the agent and the buyer. The passing score must be at least 70%. According to the answers, the level of knowledge and professionalism are evaluated, and if the results are lower than the established ones, brokers may be obliged to take new courses
In addition, in 2016, RERA issued an official circular setting out the requirements for all real estate companies and institutions that wish to publish any real estate listings from within or outside the countries. These requirements apply primarily to obtain a permit through the Trakheesi system on the official DLD website.
Trakheesi is a system created by DLD to provide intelligent services related to licensing, permits and electronic cards for real estate companies and brokers in Dubai. If the real estate agent is registered, customers can easily check the licensed brokers, as well as the validity of the property data through the smart application mentioned above “Dubai Brokers”. After registering and obtaining a permit, real estate agencies and brokers get the right to sell real estate in Dubai. Thanks to the laws adopted by RERA, brokers and real estate agencies are fully legally responsible for their activities.
Thus, RERA strives to create appropriate conditions for the implementation of real estate activities and strengthen trust between investors and brokers.
In December 2020, it was reported that the Dubai ruler issued a decree regarding the canceled and unfinished real estate projects. The decree authorizes the Special Tribunal for Liquidation of Canceled Real Property Projects to consider and resolve all disputes and complaints for which the previous committee did not issue final decisions. If a real estate project is transferred from one developer to another, the tribunal is authorized to determine the rights and obligations of each developer. If RERA has cancelled a real estate project, the tribunal is responsible for its liquidation and ensuring the settlement of all rights related to the project. The adoption of this decree has influenced the determination of rights of the real estate investors and buyers as well as has increased their confidence.
Currently, RERA allows engaging in their activities only those developers who are registered with the Dubai Department of Economic Development (Dubai DED) and have a trade license indicating their real estate development activities. They must be wholly owned by UAE citizens or companies owned by them. The registration fee for the creation of a Dubai DED is AED 37,000 (USD 10,100) plus 5% of the rental fee for an office in Dubai, AED 25,000 (USD 6,800) of this amount is paid to RERA as the registration fee of the developer.
According to the requirements of RERA, the land on which the developer’s project is planned to be implemented must be fully paid for, and the ownership document must be issued in the name of the owner. In cases where the landowner cannot register as a developer, RERA allows him to conclude a real estate development agreement with an existing registered developer who will develop the project on behalf of the landowner. This type of contract comes into force only after the approval of the senior legal adviser of DLD and the adoption of RERA.
For off-plan sales, in addition to registration, the developer must submit an application to RERA to open an escrow account. Once the developer submits all required documents to RERA, he will be issued a No Objection Certificate (NOC), after which he can open an escrow account with an authorized bank in the UAE. These measures have been taken to ensure that all funds to be deposited in the escrow account will be used exclusively for the construction of the project.
As a summary, we would like to answer the most frequently asked questions.
If the broker is not registered with RERA, s/he should not participate in any projects that are under construction or fall under the requirements of RERA. Such transactions, as well as the services of a broker, are considered illegal. However, many brokers are not yet registered with RERA and if you are faced with this, you need to be prepared to check all the data. It will take additional time and may incur additional costs.
Since there are several rules in RERA that protect the interests of the buyer/seller or tenant/landlord, it is strongly recommended to buy/rent only real estate registered in RERA.
Information about licensed brokers can be found in the application "Dubai brokers". This information is also available online and for free on the DLD and RERA websites.
This body has developed intelligent technologies that have made it possible to speed up and simplify many processes for customers, and also adopted legislative acts that maintain order in the processes of buying and selling real estate. Moreover, the creation of RERA made a significant contribution to the development of the country's economy and also helped to attract a large flow of investors. Thus, RERA is an effective regulatory apparatus that ensures the proper functioning of the Dubai real estate market.
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