What's all the fuss about Dubai's new real estate contracts?
Dubai Land Department (DLD) has launched unified real estate contracts that are expected to accelerate property transactions in the emirate by allowing parties to complete registration procedures without a real estate agent.
The new agreements will also regulate the relationship between the parties involved in property transactions and will help avoid problems that arise from misinterpretation of the documents, a statement said.
“After an extensive study on the services we provide to our customers that we conducted in order to improve our performance, we came out with the decision to unify the real estate contracts to properly organise the relationship between the various parties,” said Sultan Butti Bin Mejren, director general of DLD.
“The new agreements will also help rid us of some of the problems that may occur due to a lack of clarity.”
There will be three types of unified contracts including one between a seller and a buyer, one between a seller and a broker along with a contract between a buyer and a broker. The agreement becomes formal once it has been recorded and documented at the DLD, the statement said.
Unified real estate contracts will officially be used in all transactions that relate to buying and selling of property from May 2014, the emirate’s real estate authority said. DLD is currently providing models of the new contracts on its smart property market place E-mart.
“Having unified contracts between the parties not only avoids the misunderstanding and misinterpretation of articles that could previously have occurred, it also guarantees the rights of all the stakeholders involved,” said Bin Mejren.
“It will be of great value in assisting us to keep pace with the real estate boom currently taking place in Dubai and will promote confidence in the market generally.”
Dubai’s housing prices, which rose more than 30 per cent last year, are forecast to reach pre-crisis levels by the end of 2014.
A steep growth in the emirate’s property prices has prompted warnings from the International Monetary Fund about a repetition of a potential bubble in Dubai’s real estate market.
But experts say DLD’s attempts to regulate the market by increasing the property transaction fees and limiting mortgages to second and third time property buyers, have lessened fears of another real estate crash.
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