New real estate laws introduced after Sheikh Mohammed’s letter
Recently, His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, issued an open letter, through which he conveyed six important messages. Following the release of Sheikh Mohammed’s letter, many new Dubai real estate laws were introduced to streamline transactions between developers and property investors. Here is a look at all the new real estate laws in Dubai, introduced after Sheikh Mohammed’s letter was revealed to the public.
Before we get into the details of the new Dubai real estate laws, let’s take a look at what Sheikh Mohammed’s letter to the public actually states.
‘The Letter of the New Season’: Sheikh Mohammed’s Open letter to the public
The letter by His Highness Sheikh Mohammed which is called ‘The Letter of the New Season,’ showcases Dubai’s commitment to innovation and invites proactive contributions from all members of the society along with a positive outlook. This letter has been shared extensively across popular news outlets, to reinforce our leader’s thoughts on the way forward.
Let’s examine some of the key points addressed in the letter.
1. Proactive Action
“We are a government of achievements, not a government of lectures. We are a team of accomplishers not a team of preachers.”
In the letter by Sheikh Mohammed, there is a clear message to take the lead and create positive change. He urges everyone, including cabinet ministers to put proactive action above all to facilitate positive outcomes for society.
2. Using Social Media Wisely
“Stirring up chaos on social media wastes achievements which thousands of teams toiled hard to build. The reputation of the UAE is not a gaining ground for those who are looking for more followers.”
Sheikh Mohammed also cautioned social media users to consider the consequences of their actions in his letter. He advised people to be on the side of caution and not engage in spreading falsehoods and rumours which could impact the credibility of the UAE on a global scale.
3. Focus On Emiratization
“Providing jobs for Emiratis was and will remain our top priority.”
He reiterated the focus on Emiratization and said that there will be more announcements on how this will be improved in the coming months.
4. Quality Projects to Boost the Economy
“Real estate projects need to be revamped to bring added value to the national economy and so as to not to become a burden and a source of imbalance in our economic process.”
In his letter, Sheikh Mohammed expressed happiness with the way the economy is growing. Foreign trade is increasing and the competitiveness of the UAE is evident to the world. He specifically mentions that there should be an increased focus on quality real estate projects and new Dubai real estate laws that add value and help to propel the country towards more growth and progress.
5. Prioritising public concern
“Enormous resources will be useless if we don’t have big hearts, an open-minded attitude and a good conduct.”
Sheikh Mohammed’s open letter further addressed the need for government institutions and officials to prioritise providing effective solutions for the public’s concerns. He said that having great resources with an absence of great hearts and ethics is a lost effort.
6. Always keep a positive outlook about the future
“I say to everyone — be optimistic. The next is better and greater. We are one of the readiest countries for the future and we are the most competitive country in the region. We are the fastest growing country in the number of projects.”
Concluding his open letter to the UAE, Sheikh Mohammed encouraged everyone to remain optimistic and strive towards becoming greater and better. He also reiterated his confidence in the UAE’s ability to continuously adjust strategies and swiftly move ahead towards the future.
The overall message of the letter by Sheikh Mohammed focuses on positivity and growth for the nation. Now let’s take a look at the new Dubai real estate laws that were introduced in the weeks following the release of the letter.
NEW DUBAI REAL ESTATE LAWS AND REGULATIONS
Here are some of the new real estate laws in Dubai that were announced, following the letter.
NEW COMMITTEE INTRODUCED TO STREAMLINE REAL ESTATE DEVELOPMENT
This was one of the first real estate announcements by Sheikh Mohammed following the release of his letter. He announced that a Higher Real Estate Planning Committee will be established to balance the supply and demand of properties in the Dubai real estate market. The committee aims to regulate the real estate sector in Dubai creating strategies to ensure projects add real value to the national economy. This includes ensuring that real estate projects are not duplicated. The committee will also oversee the competition between private and public sector companies to provide a fair and healthy atmosphere in the Dubai property market.
DUBAI LAND DEPARTMENT REPLACES RERA IN REGISTERING REAL ESTATE CONTRACTS
The next Dubai property law that was introduced after the Sheikh’s letter, stated that Dubai’s Real Estate Regulatory Agency (RERA) will now be officially under the Dubai Land Department (DLD).
As per, Law No. 4 of 2019, RERA as a public institution, will come under the Dubai Land Department. This law also includes restructuring the legal provisions of the agency, which was established pursuant to Law No. (16) of 2007.
According to the new law, the objectives of RERA include:
- Regulating and overseeing real estate development escrow accounts
- Accrediting financial institutions that are qualified to manage real estate development escrow accounts
- Approving regulations that govern development, brokerage and management of real estate including joint property.
Along with this, RERA will now monitor real estate advertisements published in media outlets in the Emirate and launch awareness programmes to educate the public about their responsibilities and rights as tenants in Dubai.
NEW LAW ON JOINT OWNERSHIP OF REAL ESTATE IN DUBAI
The new law on the joint ownership of the property in Dubai is another one of the major announcements in the real estate sector that came after the letter was released.
According to Law No. (6) of 2019, the Land Department will prepare a register for jointly owned real estate properties. This will feature all information related to the land owned by developers and real estate units meant for independent ownership. The register will also feature names of owners, members of the committee of owners, and the building management chart outlining maintenance procedures in common areas created according to the laws and regulations of the Land Department.
This register will also include details of the share of maintenance costs that each owner should pay, the facility management company responsible for managing common areas and amenities of the joint property in accordance with this Law, along with information about the developers and operators of the project.
Pursuant to this law, all developers in Dubai must submit necessary documents of jointly owned real estate projects to the DLD within 60 days of the completion date and receipt of completion certificate. The deadline of 60 days can be extended by another 30 days.
The new joint ownership real estate law in Dubai also applies to facility management service providers. They will need to submit reports every six months to RERA on the management of the property and common areas.
Those who fail to produce the documents can be subject to financial penalties going up to AED 1M, which can be doubled to AED 2M in case of repeat violations within a year.
With this new property law in Dubai, the government aims to boost competitiveness, enhancing investment in the real estate sector while protecting the rights of all involved parties.
Read our expert’s discuss jointly owned property law in Dubai to attain further clarity.
AMENDMENT OF DUBAI DEVELOPERS RIGHT IN OWNERS ASSOCIATIONS
The most recent Dubai property law that created a lot of buzz in the UAE real estate market is the amendment to the rights of developers in Dubai. The new Law No. (6) of 2019 states that developers cannot be part of an owners committee unless there are unsold units (in the project). This means that now Dubai developers cannot dictate the terms of owner associations.
As soon as 10% of freehold units at that project are registered, the owners’ committee must be initiated however it should not include more than nine members selected by RERA.
This new real estate law in Dubai gives more power to the owner committees under RERA’s guidance. Previously developers played a major role in setting up and managing the owners’ associations of the properties they sell. They could dictate the terms of sales and purchase agreements for the first three years after a project’s completion and certification.
As you can see, the Dubai real estate market is moving towards a much more conducive environment for investors and tenants. The changes are a positive sign and investors should capitalise on the shift in the market.
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