Tuesday, Sep 27, 2016
Dubai: Overseas developers beware! The same holds true for estate agents.
They cannot any longer just take a flight to Dubai, place an advertisement about the property they want to hawk, pass on a few glossy brochures and then hop on to the next flight back home.
If they do so, it’s going to cost them dear. Beginning October, they will need to obtain “official permission” before they can make real estate specific announcements in Dubai. This will apply across all advertising and marketing platforms, including on digital/social media.
In a major push to bolster consumer protection, the Dubai Land Department is cracking down on any local campaigns promoting overseas property deals. They can still do so, but will need pre-approval from the Land Department in all instances. “For developers abroad, it means having a licence in Dubai for announcements made through a registered real estate broker in Dubai,” said Ali Abdullah Al Ali, director of the Real Estate Licensing Department. “And the broker must obtain the permits required. There are conditions and requirements to be submitted to obtain the permit.”
In the case of non-compliance with the circular issued by the Real Estate Regulatory Agency (Rera), the regulatory arm of Land Department, by those placing advertisements on overseas property, fines of Dh50,000 will be applied. If there are repeat violations within the same year, the severity of the fines too will be scaled up.
“There have been previous occasions that some real estate cases where filed regarding fraud operations because of false ads,” said Al Ali. “This activated the decision to apply it more broadly to all types of advertising, including on social media. We have issued a formal circular to all real estate companies operating in Dubai and giving them a deadline to get the required permits from the beginning of October.” (The new requirements on real estate ads is subject to approval by Rera. It is based on an Executive Council Resolution No. 25 for 2009.)
Industry sources suggest the move by Rera will go a long way in cleaning up the business of selling overseas property in Dubai.
“In most instances, a buyer who is putting up the down payment on such a property will have no idea about the credentials of the developer behind it or of the foreign broker selling it here,” said one source. “If the same overseas properties are only marketed through registered brokers in Dubai, the buyer will have far more clarity on what they are buying into.
“This may not entirely remove all future instances of buyers being taken for a ride, but at least it brings the chances down. And buyers here are also sufficiently forewarned about what they are getting into.”
Traditionally, projects in the UK and India have been heavily marketed here. In fact, of late, some of the high-profile projects in India have had their first international marketing push from Dubai.
But, these days, properties located in all sorts of overseas destinations are being advertised — and sold — in the local market through ads, cold calling and instant messaging. And even with all the warnings being sounded to prospective investors, there are still those who put their faith in that “unprecedented investment opportunity” or “never before seen returns” these messages propagate.
“These companies may have a fancy website to go along with a glossy brochure — but for all you know, they may not even be owning the land they are trying to sell,” said an industry source. “The new requirement from the Land Department goes some way to take care of the buyer’s interests. They won’t be going into a deal blind.”
By Manoj Nair Associate Editor
Gulf News 2016. All rights reserved.
