Nothing 'tangible' has come from RERA - top lawyer

Dr Habib Al Mulla criticises the UAE's real estate watchdog over lack of legislation

(AFP/Getty Images - for illustrative purposes only)

(AFP/Getty Images - for illustrative purposes only)

Top UAE lawyer Dr Habib Al Mulla has accused real estate watchdog RERA of dragging its heels on the formation of a real estate law in the country.

In an interview in Arabian Business, Al Mulla said: “In property there is no framework to protect the consumers. We need a proper strong real estate law in Dubai and in the UAE.

"Until now we have not seen anything tangible come out of RERA. I think they are well behind and they need to speed up.”

Al Mulla added he was concerned that no strong legal infrastructure had been put in place during the recent recession.

He added: “We have seen two phases. The phase of growth and the phase of slowdown. Unfortunately in both cases we have not dealt with the situation properly.

"During the boom no one cared to look at the legislation we have put in place and in slowdown people were concerned with other things. My fear is again we are seeing this level of growth and not enough attention is being paid to the legal infrastructure.”

Last year, indebted developer Nakheel sparked huge controversy after banning several tenant on the Palm Jumeriah from using its beaches. The developer claimed it was within its rights to do so over unpaid service fees – despite the fact that most of those banned were tenants who are not responsible for service fees.

At the time, UAE business legend Khalaf Al Habtoor told Arabian Business: “It was 100 percent [damaging] and unacceptable. If I am buying a house and using the beach and later told I have to pay for the beach, this is abnormal. This is damaging the reputation of my country.” Habtoor added:

“I am 100 percent sure that the higher authorities were not aware of such a thing because they would not have accepted it…. They would never have [agreed to] it but some people try to show they are making money for the government – they are damaging its reputation two million times [over] for a few dirhams.”

Al Mulla said Habtoor’s comments are “strong” but admits there are “concerns” – however, he says the wider issue needs to be examined, and is again a problem that needs to be laid at RERA’s door.

“There has been legal vacuum so developers have filled in the gaps with contractual arrangements. Because there was no legal framework these contractual arrangements were made, so maybe they (Nakheel)  have been contractually right to do so.  Now  this is where RERA has to step in and say even though you have contractual rights, there are also consumer rights.”

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

NOTE: Comments posted on arabianbusiness.com may be printed in the magazine Arabian Business

Please post responsibly. Commenter Rules

Posted by: Doctor Who

RERA? you must be talking about that useless institution like many countries have. The guys are not interested by anything beside their titles and their salaries. RERA has done nothing for investors or Dubai reputation. They drafted and publicized laws that they are the first ones to ignore. Developers are acting on daily basis outside and against the laws with RERA's approval. Till today there is no one single developer accountable for their mismanagement or for the lack of maintenance putting thousend of residents at risk (money and property). The situation will not improve for Dubai RE ; despite all media articles. Dubai RE has no futur and it is like gambling in a casino. For years investors are scammed and RERA is just watching. Sad state of the affairs but who cares, definetly not RERA as far as they continue to make money with no responsibility

Posted by: Eric

I can not agree more with you Doctor.

Posted by: Dimple Giresh

I would like to highlight on the "JOPD" issue.
The Developer claims higher Maintenance Fees without RERA approval. Residents go to Rera , they tells us you can object to the increase. Residents object , then Developer does not do maintenance of the JPOD. Residents complain to Developer on the Maintenance.
Developer says we don't receive maintenance charges so cant Maintain.
At last The Developer collect the money from Residents and building remains un maintaned.
When Residents ask the Developer to handover to the Maintenance to Owners Association . The Developer says please pay the outstanding amount owed to him (NO proper accounting) from the developer.
The developer keeps on collecting funds & awards the Building maintenance contract to his own group of companies, thereby creating a big hole "LIABILITY" in the funds of the JOPD for Maintenance. "Now The Developer does not want to handover"

Can someone please stop this ...... TOM AND JERRY CHASE.

Posted by: BurjShisha.com

Agreed with Dr Habib Mulla 100%. RERA has been very efficient in collecting the fee for title deed and 'train' the realtors. I have several affected investors whom we try and help to sort issues with developers, landlords and tenants.

Hope they get active asap. good work Dr!

Posted by: Mark Renton

If the main Dubai developers genuinely care about the future of their property market they would be well advised to work with RERA to create a proper investor protection environment. Unfortunately they seem more concerned with short-term tactics such as refusing to register OA's so that they can continue to overcharge for managing the development.

They need only look at the example of Cyprus, where powerful developers thought they were being very clever by stiffing their expat buyers and obstructing reform, only to end up destroying their own market.

Posted by: millie

The Jointly Owned Property Law and the Escrow Law have been implemented in Dubai to protect investors to some degree. The difficulty is RERA need to enforce those laws, for example the requirement that big developers produce proper disclosure statements for purchasers, as the law requires.

A law taxing flippers who do not hold or reside in their properties for a certain minimum period would also help stabilise the market. It is commonplace in a range of established mature property markets elsewhere, so why not here?

The Owners Association situation is a shambles - RERA needs to ensure proper and prompt registration.

Posted by: Andrew Bannister

This is all part of a country where growth in awareness of its residents is the same as a child maturing through education and experience.

It is no wonder that there have been so many issues in a tiny corner of the world where just a few decades ago there was little but sand and hope.

The reality of the situation is that what has happened so far was to be expected and the sincere and aware words of Dr Al Mulla who holds great respect from within and outside of the UAE are indeed more than welcome.

Dubai continues to grow from infancy to maturity, the amazing thing is, that it is happening so fast. For many of us its too easy to forget that most of our home countries have had hundreds of years to develop and mature but the UAE, just a fraction of that time.

We choose to live here mostly for good reasons, so lets work together to help this infant country mature into one of the wonders of the developing world.

Well done Dr Mulla, well done Dubai, BUT please do not stop the education

Posted by: Girish B R

I fully agree with you Mr.Andrew Bannister.

I have been in UAE since 24 years and have not seen such development even in my home country leave aside the problems that the customers are facing there.

Faluires should be used as stepping stone to formulate firm laws good for all in general.

I Endore Mr. Habtoor's view that by imposition of the restrictions on the residents who have paid their dues on time and penalising them for what they have not done is not justified and that will tarnish the reputation in this part of the world.

Dr Habib Al Mulla's point of view is one side of the coin and the second side of the coin has to perform and create its reputation in this country.

All comments are subject to approval before appearing

Further reading

Features & Analysis
Abu Dhabi real estate: Down, but not out

Abu Dhabi real estate: Down, but not out

While there has been evidence of rents in the richest emirate...

Forgotten fees: the challenge of investing in Dubai property

Forgotten fees: the challenge of investing in Dubai property

Investors attracted to low service charges at some Dubai residential...

3
Dubai real estate: which way will it go?

Dubai real estate: which way will it go?

In this special report, Arabian Business analyses the state of...

3
Most Discussed
sponsoredTracking