The Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Governor of Dubai issued a law on the Real Estate Regulatory Agency (RERA) of Dubai on Sunday.
The new law includes the restructuring of the legal provisions of the agency. Under the new law, RERA’s objectives include contributing to the development of the Dubai real estate sector within an integrated system of regulatory and monetary procedures and improving the sector’s contribution to the economy of Dubai.
Also, RERA will work to provide a safer environment for real estate projects to provide protection of the rights of developers and investors. It will further implement new projects and programs for investors and builder to profit from other new real estate opportunities. All these initiatives will promote professional and ethical standards in the industry.
With this law coming in, it is the responsibility of RERA to check for regulation and supervision of real estate development deposit accounts, accrediting financial institutions that are qualified to administer real estate development deposit accounts and approving regulations governing development, brokerage and administration of real estate, including joint ownership.
RERA also takes care of the real estate ads which are published in the emirate’s media, develops and launches awareness programs in collaboration with the Dubai Real Estate Institute to educate the public about their rights and responsibilities, and prepares and updates policies designed to balance the Supply and demand.
This law will be published in the Official Gazette and will take effect on the day of its publication.
How does RERA benefit buyers?
- Under RERA, not being able to get apartments from the builder will no longer be a problem. Developers who fail to meet the delivery date must pay an interest rate of 2% above the loan rate of the State Bank of India to homebuyers.
- The quality of construction has been a concern for many buyers. Under RERA, any structural defect that occurs on the property for up to five years from the date of delivery of the possession must be repaired by the developer. It will be the obligation of the promoter to rectify such defects within 30 days without additional charges.
- The untimely delivery of real estate projects has been the main threat to buyers. According to economic times, almost all projects launched between 2010 and 2013 had failed to meet their delivery time mainly because the builders diverted the funds to new projects. However, according to RERA, the developer must transfer 70% of the money received from buyers to a escrow account. Publication of which, the money will be withdrawn according to the construction stage, which will be approved by engineers and public accountants of builders.
- Under RERA, regulatory bodies and courts of appeal will be established in each state to resolve disputes between builders and buyers. Any person harmed by any address can expect a resolution of the appeal within 120 days.
- Previously, builders often sold projects that did not have all authorizations, which caused many problems for buyers. Under RERA, builders and agents will have to register with the regulator, disclose all details about the project and may sell projects only after the necessary authorizations have been obtained.
- Previously, many developers promoted their projects with false commitments and offers. However, according to RERA, each advertisement will have to bear the RERA registration number, and all promotions or announcements must be completely honest and without false commitments.
Conclusion: It is mandatory that all builders and agents register with the RA (Regulatory Authority) after its establishment. They will also be asked to register their projects along with all the information, including the financial statements, the copy of the legal title and other documents. Publication of which, they will receive a registration number for the project.