Dubai sets code for developers

Draft Code of Corporate Governance released

After seeking suggestions from the public on the Real Estate Investor Protection Law last month, the Dubai Land Department has asked real estate developers to review the draft Code of Corporate Governance for Developers, Emirates 24|7 can reveal.

“We kindly ask all real estate developers to review and share their opinion on the draft Code of Corporate Governance for Developers,” the department has said recently.

This website reported in 2011 that the Land Department was likely to make it mandatory for every developer - master and sub-developer - to follow the Code for Corporate Governance from 2013.

The code, developed by Hawkamah, the Institute for Corporate Governance, in conjunction with the department, outlines the responsibilities of a developer and ensures that they disclose recourses and alternatives available for prospective investors in case of a delay in completion and handover.

The draft suggests that all developers will have to appoint a dedicated investor relations officer who will deal with enquiries of institutional and individual property investors.

Moreover, developers have to ensure that the sales and purchase agreement for built-up and off-plan properties reveal complete information about the property, parking spaces, common areas and service charges.

The draft code proposes that property owners (buyers) should also be provided with a comprehensive document (owners’ manual) containing complete information about the purchased property, resident etiquettes, whom to approach in case of maintenance issues, developer’s warrantee, information about the owners association and the association manager along with the information on the community where the property is located.

While in the case of off-plan properties, developers have to provide complete information about the property to the registered brokers or selling agents, or prospective buyers which includes project description, infrastructure information and utilities, with finishing details of the property.

One of the recommendations of the draft code is that the developer selling off-plan should try to obtain a “credit” rating from a rating agency to improve confidence level of investors.

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