Forty per cent of property developers in Dubai are not registered with the Real Estate Regulatory Authority (Rera) and have failed to set up escrow accounts despite a mandatory deadline of the end of the year.
Rera Executive Director Marwan Ahmed bin Ghalita said: “So far some 280 companies have registered with the authority as real estate developers out of at least 500 registered with the Department of Economic Development in Dubai.
“This means 60 per cent of property companies have registered with the authority and have escrow accounts through which they can sell property projects they are developing on the map. We will not extend the registration deadline.
“We will help whoever comes to us and abides by law, while we will enforce penalties provided for by law against the violators.”
The executive director said the Real Estate Guarantee Account Law had set the end of the year as a deadline for developers to register so there was “no place for non-licensed developers in the real estate market of Dubai by the beginning of 2008”.
Article 16 of the escrow account law has set regulations for violations and fines to be imposed on those who do not register in time. Property buyers, he said, bear the responsibility of guaranteeing the transparency of the purchasing process.
“The government has enacted laws and set the procedures needed to create transparency. It has provided the safe environment for the investor and consumer, and therefore we warn those who have violated the law.”
Bin Ghalita said investors have to make sure the property developer is registered with Rera and has a registration number and an escrow account. However, Director General of Dubai Real Estate Investment Company Obaid Al Salami said the system was not as clear as it should be.
“We have received nothing from the Land Department in this respect. Nor have we been officially informed that we should register with the department or authority.
“The Land Department is one of the best Dubai departments dealing with customers. But how come the Department of Economic Development would grant me a licence then the Land Department would withdraw it without telling me? Would this not fall under contradiction among government departments?”