Since its inception in 1960, the Dubai Land Department has strived to innovate the emirate’s real estate industry, ensuring that it matches global standards by staying attuned to the needs of the people. In line with this vision, the DLD has passed landmark new regulations, set to transform how the sector works.
But what is this new mandate, and how will it affect the real estate industry? We sat down with Firas Al Msaddi, CEO of fäm Properties, as he shared the Inside Scoop on the new regulations, its effects and his predictions on the real estate industry’s future.
Watch the interview below, or read on for the highlights:
The New Law, Summarised
We decided to cut to the chase and find out the key elements of the new law. Firas summarised these regulations as follows:
- The Form A (the agreement to advertise a property, which used to be in paper form) will be moving to a fully electronic copy format. This digital form can be downloaded from the Dubai REST app.
- Only 3 real estate brokers will be allowed to list a specific property for sale.
- This law will prohibit cold-calling and any form of cold-marketing
Exploring the Cause and Effect
Fake listings, or listings with inaccurate information, have been causing difficulties amongst both property seekers and sellers alike.
A potential buyer or tenant would want to know an accurate estimate of prices while planning their budget, while a seller typically would like to base their prices on market standards. Firas stated that both parties seek this data from portals, which is why these regulations can help weed out the confusion from fake listings.
He then discussed a common malpractice, where agents list a property at prices lower than its actual price. This typically attracts a higher volume of clients, who are then told that the property is sold, but alternatives are available at a higher price. This predictably created lack of trust and frustration amongst home seekers.
The new regulations create a win-win situation for both landlords and property seekers, guiding them to make informed decisions whether they are buying or selling properties.
When asked about the impact of the new DLD regulations on real estate agencies, Firas opined that a well-regulated market is critical for agencies looking to scale and grow. Therefore, these regulations can attract global players – agencies and brands – to Dubai.
Firas also suggested that existing real estate agencies can capitalise on this new direction by specialising in either working specifically with landlords, on the listing side of transactions; or with tenants and buyers – people looking to acquire a property.
He remarked that new agents could potentially find it harder to break into the market, as there would be a growth in area and community specialists. From the previous model, where one agency would be able to list scores of properties, we are moving to a market that will have regulations on the number of listings advertised on portals.
With Form A taking centre stage, brokers’ rights will also be protected with the digital version now clearly stating the clients’ (sellers and landlords) obligations towards real estate brokers, said Firas.
Let’s Talk Off-Plan Properties and Portals
Along with the secondary market becoming well-regulated, Firas believed the positive impact would trickle into the off-plan market as well. He predicted that it is likely new agents will focus on gaining more off-plan property inventory to capitalise on the competitiveness of this segment, especially in light of the greater need for networking experience in the ready market.
Since real estate ‘portals’, as the name suggests, are literally a portal to find property listings, these regulations can certainly improve end users’ perception of these sites. Firas conveyed a shared responsibility on both the portals and the broker to ensure that all listings are genuine.
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Going Into The Process
Firas explained that to advertise a property, the agent needs to cooperate with the landlord – by sending the latter a link from DLD to their registered mobile number. On clicking the link, the landlord receives a verification code to be shared with the agent. Agents require this code to advertise a property, for the Trakheesi permit. This process will be disrupted if inaccurate information was shared at the time of the property purchase.
On The Market’s Direction
Firas suggested that unlike before, where any broker could establish themselves as a ‘listing-rich’ agent, these new regulations would allow the professionals to navigate the industry successfully. Basically, being an area specialist would hold a clear-cut advantage, owing to their in-depth understanding of the community. This opens up the opportunity to get into the genuine real estate market, networking with sellers and landlords to obtain exclusive listings.
He concluded by saying that perhaps there will be agents who will try to ignore the regulations and continue to work the way they did; these agents will not be able to keep up with the game after six months.
After the law is officially in place from the first of October, only three brokers will be allowed to advertise a property for sale. Firas mused that it may take time for things to fall into place, after which real estate entities who aren’t prepared, or lacking the infrastructure or support, may not need to rethink and reorganise their efforts.
As the CEO of a successful real estate agency, Firas advised other brokerages to think about collaborating with each other, now more than ever before. In line with his thoughts on agents specialising in either the buyers’ or the listings’ side, he said this cooperation is inevitable. He brought up the importance of the administrative side of the business and the agency’s leadership. Bringing up the corporate tax that will be coming in 2023, he opined that the market will be more regulated in the coming years. He concluded that being genuine and focusing on building a reputable brand can attract more clients, regardless of the size of your agency.
Bayut and dubizzle’s Role
Firas shared that Bayut and dubizzle, especially Bayut, have given agencies a head start on being genuine with TruCheck™. This feature reflects the authenticity of a listing, which previously was not mandatory. But, with the introduction of this law, proving a listing is genuine will take priority for agents.
He applauded Bayut’s move to take thousands of listings off the portal, and opined that perhaps none of these listings had the TruCheck™ badge – as they were not genuine. He also shared his appreciation for Bayut communicating the do’s and don’ts of the new laws from the DLD to their partners, and wished them all the best for their future endeavours.
As the real UAE market grows and attracts potential buyers worldwide, it is up to each of us – the agents and the portals – to come together and create a safe space for property seekers. While the DLD introduces regulations and laws, we must ensure a smooth property process, be it by sharing genuine data or by creating a transparent environment.
Disclaimer: The views expressed in this article belong to the interviewee alone and does not reflect the opinions of Bayut.
About Firas Al Msaddi
Firas Al Msaddi is the Founder and Chief Executive Officer of fäm Properties, one of UAE’s biggest real estate brokerages and executive chairman of fäm Group. Hailing from Syria, he moved to the UAE in 2005 and worked hard to make a mark in the real estate industry.
He founded fäm Properties in 2009, during the global economic crisis – driven by his unfaltering belief in the sustainability and endurance of Dubai.
Firas also manages an investment portfolio for ultra-high net worth individuals in the GCC and runs other businesses, including fäm Real Estate Development Advisory, fäm Interior Design, fäm Media 24/7 and fäm Holiday Homes.
About fäm Properties
fäm Properties is a renowned real estate agency based in Dubai that specialises in leasing and sales of real estate across the city, along with property management. Their team of experienced agents have built a strong reputation owing to their customer-centric approach.