Every country has regulations. Do not think that just because you went halfway around the world to do real estate investing does it mean you are free from regulations. The countries and cities like Dubai, have become very strict about their real estate industry. There are regulations to meet.
Dubai’s Real Estate Regulatory Agency (RERA) is the regulatory body for the Dubai Land Department. It provides all the rules and regulations you have to meet if you want to invest in this city.
There do not seem to be that many documents that need to be filled out. But the process of getting a license for ex-pats is a little time-consuming. The first step is to establish your residency by obtaining the right residency visa.
After that, you will need to submit documents including a no-objections certificate from the free zone you want to work in. Third, you have to register for the DREI-certified training and take the RERA exam.
But that is not all. After finishing the course, and passing the exam you need to apply to the DLD to be approved for a license. All the documents needed are:
Part of this process is listed in the previous section. There is the training you must attend and you must pass the RERA exam after you have completed that training. The topics covered in that training are:
You also have to pick a business name that is in compliance with the UAE’s business naming rules. All along the process, there will be different fees you will have to pay. Some are as little as 3000 AED and as much as 15,000 AED approx.
Your property management license will cost you an additional 5000 AED. Once you have submitted all the documents including the code of conduct certificate, the DLD must approve your license. When that is done, you can start your Dubai real estate business.
To get the most up-to-date information on this process contact the RERA directly and get all the facts.
For all their strict rules one area that seems to be unregulated is the agent’s commission. According to one top broker’s office, the RERA regulatory body did not set any official estate agent’s commission.
The general rule of thumb is that you must pay a certain agreed-upon percentage per the annual rent of the apartment or villa, etc. For example, if the annual rent for a home is 20,000AED then you would have to pay an additional 5% commission based on that annual rental cost.
If you are buying a home or villa, etc., and the purchase price is 10,000,000 AED, then you would be expected to pay an additional 2% commission to the agent.
What both commissions would cost you would be 1000 AED for the rental and 20,000 AED for the purchase. It is a fairly straight forward fee and it does not seem to violate any ethical or code of conduct rules.
Without the official fee level stipulated by RERA, the commission rate is established by the contract between the buyer and the agent. Some agents will charge a 10% fee
The law says “the real estate broker’s remuneration will be determined by Agreement, and in the absence of agreement, remuneration will be determined according to prevailing practice.”
That leaves a lot of leeways for some unethical agents to overcharge and take advantage of ex-pats not knowing the rules.
It is going to be difficult to list all the rules here since RERA has created and released in 2022 a new Real Estate Brokerage Practice Guide. This guide has all the laws, procedures, and other information related to being a broker in this city and country.
This guide is designed to make sure all real estate transactions and other businesses are carried out in a transparent manner. It is also designed to keep those transactions healthy as well as to make sure all transactions are not carried out outside of the laws of the DLD or RERA.
The reason RERA produced and made available this guide is to make sure all brokers, agents, and managers know the law. RERA is expecting all of its licensed agents, etc., to operate in a very ethical way so that all customers are free from deception and loss of money.
Legal action is possible if any of the agents or agencies violate these rules and laws. It is just one way to regulate the industry and keep it honest and fair for all.
Property management and real estate work are different in all countries. If you want to be a part of the real estate world in Dubai, give our company a call. We have over 10 years of experience in handling Dubai real estate and meeting their regulations.
When you are new to the industry in Dubai, it pays to have the best agency working on your behalf. Call us today so we can help meet the red tape RERA requires. It will make everything easier and smoother when you have our professional help.
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