New rules for property development announced in Dubai
New property developers in Dubai will be required to pay 100% of the land price before selling off-plan and will have to inject a minimum of 20% of the project's value before beginning construction from March, it has been announced.
The emirate's Real Estate Regulatory Agency also said that although it has postponed plans to introduce a news sales agreement, it is also about to implement a 15 day cooling off period to allow property investors time to thing over their decision to buy.
'Besides, paying land value in full and injecting 20% of the project value to start construction, new developers will have to link payments to construction. This is a new regulation that will become operational from March,' said Marwan bin Ghalita, Chief Executive Officer of RERA.
'Shortly the investor will have the right to have a clause of cool off period for 15 days and then commit to a contract. Once you sign a contract, you are bound by it,' he added.
The regulatory body is also to introduce an online progress monitoring report that will be updated monthly in a bid to calm investor sentiments on the wave of project cancellations in Dubai.
'Starting from next week, for any Rera-approved project, there will be an independent progress monitoring report, which investors can access online at www.rpdubai.com and see the progress of their projects,' explained bin Ghalita. 'This is a monthly report for every project in Dubai. It is costly for us, but we cannot compromise on transparency and trust. That is why we are taking this step and collecting all information,' he added.
He advised people to not fall prey to false information on blogs and said the correct information will be on the website. If there is information missing he is urging investors to write to RERA which will update the website within 15 days.
The list shows a sharp decline in development. 'When we started Rera we had more than 870 developers. Today we have only 427 developers,' he said. Some have asked to be removed from the list as they are not launching any project, some have merged their companies under one name and yet others were registered as developers but have been removed as their project are no longer feasible.
'The reduction is a good sign for me as a regulator because we can give the market the required number of units. We, as a responsible body, will control the supply coming into the city in consultation with other authorities,' he promised.
But not all projects that are registered will go ahead. The regulatory body expects 25% to be cancelled, 25% to be consolidated, 25% to be re-scheduled and 25% to be completed on time.