The real estate market in Dubai is subject to regulation by a governmental organization known as the Real Estate Regulatory Authority. That is the organization that is responsible for overseeing the progress of the real estate markets in Dubai and therefore it is the organization that all overseas property investors are likely to go through at some point during their investment stint in the Emirate.
RERA has decided to increase their regulatory hold on the property markets within the Emirate by introducing two new regulations into the mix. The first is a regulation stating that all of the future agreements for tenancy in residential units in Dubai need to be approved by RERA and the second is a regulation making property developers legally responsible for any damage occurring to a piece of property for the decade after its completion.
In regards to the first law, ostensibly it was put in place in order to protect people from landlords choosing to increase rental prices on them at their own discretion. With the tenancy agreements having to be approved by RERA, the regulatory agency will have the chance to reject any agreements that it deems would result in the landlord taking advantage of the tenant. While this is certainly going to be good for people that rent in Dubai, it at the same time has the potential of reducing foreign interest in the country’s property market as many regulations of this kind tend to do.
The second law was put into place for protection as well, although this time it was to protect property buyers from developers that might have used substandard material and shoddy construction in the creation of their property dwellings. Any kind of wear and tear damage that occurs within the first ten years would be the sole responsibility of the developer under this new regulation.
This regulation, like the pre-approval process, has the potential to make one side (the owners) very happy about being protected, but it also has the potential to reduce interest from the other side (the developers). If there are fewer developers interested in taking on projects with this new regulation in place, it is not unreasonable to expect a downturn in supply if that does indeed happen.
