Prime Highlights:

• Dubai mandates new approval procedures for foreign developers and brokers before selling or marketing foreign property in the emirate.
• The regulations aim to protect domestic investors and provide transparency for documentation, permit charges, and escrow protection.

Key Facts:

• Foreign property listings must now be approved by Dubai’s Real Estate Regulatory Agency (RERA) with full documentation.
• Brokers are also not allowed to receive payments directly from buyers; payments must go through developers’ escrow accounts.
• Penalties would involve fines of up to AED 50,000 and potential blacklisting or suspension of brokers on real estate portals.

Key Background

Dubai made a tough push to govern the sale as well as marketing of foreign property in its jurisdiction by introducing new regulations for foreign developers and brokers. This legislation requires any foreign property on offer or sale in Dubai to be pre-approved by the Real Estate Regulatory Agency (RERA), which is a division of the Dubai Land Department (DLD). The action is meant to prevent fraud, increase transparency, and safeguard the interests of buyers from Dubai of overseas properties.

By the new law, brokers must obtain a license before marketing any foreign project. The process entails submission of bulky documents consisting of proof of ownership, title deeds of the foreign property, and a formal marketing agreement between the foreign developer and the broker. All documents must be notarized, officially translated to Arabic language, and endorsed by the concerned embassies. A property listing permit fee of AED 1,010 is also paid.

Another large part of the reform is that payments from buyers cannot be made to brokers anymore. Instead, all payments must be made to a foreign developer directly by way of an escrow process. The DLD is currently pursuing an escrow account system for foreign transactions modeled after Dubai’s stringent escrow regime for on-plan sales locally. The move is aimed at giving buyers an extra layer of financial security and accountability.

These reforms came after a growing number of complaints of deceptive property promotions and broker malpractice. The DLD has already received over 130 complaints in a single year and has also imposed fines on a number of brokers for violations, including up to AED 50,000.

Dubai’s new regulation scheme is a big milestone in the marketing of international properties in the domestic market. It is also an example of the emirate’s general vision to become a highly regulated and investor-friendly property hub with maximum documentation, transparency, and monetary protection. These efforts are most likely to raise investor trust and ward off fraudulent international property scams in the coming years.