Dubai Property Agents Contemplate Recent Property Law Changes

Dubai property society delegates recently sat down to discuss the effect and impact of the new property laws recently introduced in August to the Dubai freehold property market. The laws are aimed at providing some comprehensive legislation to the Dubai real estate market, and now that people have had time to take in the new regulations, the general consensus is that that laws bring something positive to the table. The 3 new laws that have been the main centre of attention are firstly the new law regarding property disputes, the off plan sales law, and the mortgage law. All have generated a good deal of debate among Dubai property agents, but the laws are now starting to be widely understood and accepted.

Known as ‘Law 14’, the new mortgage law aims at reducing speculation in the market and should help increase investor confidence in the Dubai real state market. Now all mortgages can only be offered by UAE based lenders, and all these lenders must have first registered with the Land Department by October. The rule covers all mortgages issued; including those obtained before the law came into effect, meaning current mortgages must also be registered or else will be considered void.

Law 13, which is the new off plan property law aims to insure stability and increase investor confidence in developers when purchasing off plan properties. Now all developers must register their developments with the Land Department. This aims to have a positive effect, as now developers must have obtained and taken possession of the require land before being able to launch and advertise projects. Previously plans and blueprints have not been approved before developers start to market projects, often resulting in changes to developments that have already started advertising to buyers. With preapproval now needed first, developments can be subject to very little change, and buyers can rest assured of getting what they expected.

And the other law is in regards to property fees and charges. The initial system of developers charging buyers transfer fees, typically around 2% of a properties value has now been scrapped, and replaced with a new system. No longer will fees be based upon a percentage of the properties value, but will instead be a caped amount of no more than AED 5000. Developers will still be able to charge administration fees, but with the capping, this should provide a much fairer system. The law also brings set time periods and courses of actions for potential situations, bringing increased clarity to the whole buying selling process.

The new laws therefore go some way to improving Dubai’s rapidly developing real estate market, and should help bring the legislative side of things up to speed, whilst increasing the transparency of property deals and reassuring buyers as a result. 
 

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