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Sharjah works on draft law to regulate transactions

The draft law recommends making bank guarantees mandatory for real estate brokerage licences. (EB FILE)

By Mohammed Elsidafy

Non-GCC Arabs are barred from owning property in Sharjah according to the emirate’s laws. Arabs from countries other than the GCC can buy property there only in exceptional cases, according to a top official.

Even these exceptional cases require special decisions by Sheikh Sultan bin Mohammed bin Sultan Al Qasimi, Crown Prince and Deputy Ruler of Sharjah, said Hamed Salem Al Abdouli, Director of Sharjah’s Real Estate Registration Department.

Speaking during a session of the emirate’s Consultative Council, Al Abdouli said a draft law has been referred to the Legal Department of His Highness Dr Sheikh Sultan bin Mohammed Al Qasimi, Supreme Council Member and Ruler of Sharjah, which will regulate transactions of land and real estate in the emirate. It will also regulate the work of real estate brokers.

The draft law stipulates that brokerages shall be run exclusively by UAE nationals who should not be involved in any other activity, said Al Abdouli, adding that 821 real estate brokerage licences have been issued in Sharjah. While half of these licences are not being operated, the other half are run by expatriates, he said.

Al Abdouli said registration of 10 towers had been suspended for violating ownership laws and regulations. Also, electricity supply has been cut off to 61 flats owned by foreigners, and the situation was being corrected with the bodies concerned.

He added that his department’s revenues were affected as a result of the global financial crisis. Earnings retreated by 36 per cent in October last year, by 73 per cent in November and by 76 per cent in December. In January there was an 88 per cent revenue loss. The actual amounts were not revealed.

The question regarding real estate ownership by non-Arab expatriates and problems in the sale of their property, as well as the department’s tackling of the situation, was asked by Sultan Mattar Al Katbi, a member of the Consultative Council.

Al Abdouli also said while ownership by foreigners was totally banned, some developers circumvent the law, resorting to long-term rent contracts. An instance of this is the tower where 61 flats have been rented to foreigners, and where power supply has been cut.

Al Abdouli said developers have not abided by the laws and regulations. Decision No 32 of 2005 issued by the Executive Council said only UAE nationals and citizens of the GCC states could own property in Sharjah.

He said a committee was formed four months ago by the Executive Council, made up of directors of the municipality, planning, economic development and real estate registration departments to discuss the situation of projects developed with a view for general sale.

“We met twice with the developers of those properties and representatives of the guarantor banks, and we have reached an agreement regarding 90 per cent of the mechanisms and decisions that will help make these projects compatible with the law. The decisions will be approved by the Executive Council soon,” he said.

Council member Obaid Ghareeb asked about decisions taken by the municipality to stop work on some projects despite the fact that they had been approved earlier. Al Abdouli attributed this to regulations by other departments such as electricity, planning and survey.

In response to Al Katbi’s comment on allowing ownership for all Arabs and the need for the Real Estate Registration Department to encourage UAE nationals to own property even through partnerships with other nationals, Al Abdouli said ownership by non-national Arabs was approved by the emirate’s Crown Prince under certain conditions, such as when the Arabs were UAE residents and were working in the country. Also, nationals are encouraged to own property through laws and regulations that allow them ownership of multiple properties, he said.

Rashid Al Naqbi, Deputy Chairman of the council, asked why the department would ban the transfer of ownership of agricultural land, since a lot of such land owned by other GCC nationals had been left deserted.

Al Abdouli said while such transfer was allowed for UAE and other GCC nationals, a year ago “we were surprised by a decision from the Executive Council, based on recommendations by the central area municipality, to stop the transfer of agricultural land pending the re-organisation of agricultural activity”.

Answering a question by council member Saeed Habib Sajwani about the phenomenon of “roaming brokers” in the emirate who hurt licensed real estate brokers, Al Abdouli said his department was waiting for the Ruler’s approval of the draft law on real estate brokerages. The department, he said, has studied laws enforced in some other GCC countries, especially Kuwait, which has a long experience in the field.

Among the most important items of the draft law is one stipulating that only Sharjah nationals would be given licences for real estate brokerages. The draft law also recommended making bank guarantees mandatory for licences and that the law should apply to old licences, too, upon renewal.

Council member Obaid Saif Al Hajeri spoke about the overlap between industrial and residential areas and Al Abdouli acknowledged that such overlapping was quite common. However, he said the issue is also the responsibility of other departments such as planning, municipality and economic development.

Hamad Salem Al Mazrou, Director of the department’s Real Estate Registration Section, said the department has archives all transactions since the 1980s. He spoke of a joint project for building integrated archives in co-ordination with the departments of economic development and survey. The department has planned another project to set up a website with its services and transactions.

Council member Mattar Ahmed Al Zaabi said Real Estate Department laws go back to 1972 and have to be updated following the call by the Executive Council in 2007 for upgrading the laws so that they are in harmony with current economic developments and changes.

Al Zaabi said there were instances where foreigners had owned property in the emirate held under the name of nationals and such cases of violators should be sent to the country’s supreme authorities. Al Abdouli said it would be difficult to uncover the violations in the contracts put forward for documentation at the department.

Member Dr Ahmed Saif Al Tunaiji asked whether the department had an electronic register of land and property up for sale. He also said many nationals had sold the plots of land granted to them by the government.

Al Abdouli said his department has issued regulations allowing the sale of such land only to UAE nationals. A national buying land was required to prove he had not obtained similar land from the government.

Another council member, Obaid Mohammed, asked whether there was any intention to open a real estate registration office in Kalba. He also asked for monitoring of government quarters to stop them from being rented out or sold. Director of the executive department, Abdul Aziz Al Quraidi, replied that the Kalba office would be opened this year, but monitoring of government quarters was the responsibility of the municipality.

Council member Ali Abdullah Nasser Al Owais asked whether the department has thought about the possibility of having a land and real estate exchange on the lines of a stock exchange. Dismissing this idea, Al Abdouli said buying and selling decisions in the real estate sector need more time than those in stock or gold exchanges.

Answering council member Fatima Salem Al Suwaidi’s question regarding licences issued to women for real estate brokerages, Al Abdouli said such licences had indeed been given to women but did not say how many.