Realty valuation law in Dubai gets finishing touches

The Land Department of Dubai has completed work on around 80 per cent of the real estate valuations law, a senior official said.

Mohamad Al Dah, Head of Taqyeem, Real Estate Appraisal Centre, Land Department said: "We are about 80 per cent done with the new law. The legislation was drafted and completed last year and we're in discussions with the relevant authorities to get their final approvals."

In an e-mailed statement to Emirates Business, Al Dah said the regulations for the property valuation professionals in Dubai would be adopted in two stages.

According to the department, the first stage will involve real estate valuation companies to get appropriate trade licence approval from the Department of Economic Development (DED) after satisfying all the necessary requirements.

Al Dah said the next step would involve ensuring that after a company is properly licensed, it would then have to register its own valuers with Taqyeem at Land Department.

He said Taqyeem will ensure that each valuer has the correct professional valuation experience and education. "We will also check for any conflict of interest since an individual cannot work as a valuer and a broker at the same time. Companies that offer brokerage services cannot offer valuation services except through a separately-licensed valuation company with separate staff and they will need to fulfil other basic licensing criteria." Additionally, the department said that as per the new law for real estate valuations, every valuer would need to attend the relevant course and pass a proficiency exam. "We are also looking for a commitment towards continuing professional development as a pre-requisite for renewals," said Al Dah.

According to the department, an accredited university degree, certificates of experience, a portfolio of previous valuation work, etc will be some documents among others required to register a valuations company.

In October last year, the Land Department said brokerage firms practicing both brokerage and valuation services will have one year to re-organise their business and choose one of the activities to operate in Dubai.

In an earlier interview, Marwan bin Ghalita, CEO, Real Estate Regulatory Agency (Rera), said that companies that want to practise both brokerage and valuation would have to set up a separate entity to conduct evaluation.

691 properties worth Dh77bn valued in Q1

The valuation committee within the Land Department, Dubai, completed 691 property valuations worth Dh77 billion at the end of the first quarter this year, a top official said.

Mohammed Ahmed Belgaizi, Director, Technical Affairs Department and Head of Valuations Experts Committee, said that all these valuations were done upon the request of property owners and government bodies and the valuations itself were based on both current information in the Land Department's records as well as criteria adopted by international systems worldwide.

"The valuation committee aims to provide clients with a fair valuation of their property in addition to emphasising the department's position as the official real estate reference in the market," said Belgaizi.

According to the Land Department, the committee receives valuation requests via a request form after which an assessment on the property or land is conducted using three main tools such as income, comparisons, and costs.

"These tools are internationally accredited and used by professional bodies worldwide."

Explaining the process involved for a typical property valuation, Belgaizi said: "Firstly, values of properties will be compared to its counterparts in the same area. Secondly a cost assessment will be conducted through adding up the cost of the land to the cost of construction at the time of the valuation, and finally the income is assessed by calculating the expected income of the property according to the current rent values in the market," said Belgaizi.

He added that the committee meets twice a week to discuss the best methods to conduct property valuations. The committee also seeks the expertise of professional architects, legal consultants or experts from internationally certified bodies.

Belgaizi said a client's knowledge of the valuation process is essential and that at the end of the assessment, they receive a complete report that details the valuation process.

"This not only helps in clarifying reasons to clients but also makes them aware of the necessary information needed from them so that in future valuation requests complete details will be provided for a faster valuation process."

Belgaizi also said that the committee updates its processes every year unlike other countries where updation takes place every three years.

The valuation committee set up within the Land Department of Dubai will issue the Emirates real estate valuation book soon in which developed methods of real estate valuation will be included. Mohammed Al Dah, Head of the Valuation Centre said the Land Department has joined international organisations such as the International Valuation Standards Committee, the European group of Valuers' Association and the Royal Institute of Chartered Surveyors'.

Follow Emirates 24|7 on Google News.