Riders for overseas property sale in Dubai

From October, marketing such real estate deals will need prior approval from Land Department

Overseas developers beware! The same holds true for estate agents. They cannot any longer just take a flight to Dubai, place an advertisement about the property they want to hawk, pass on a few glossy brochures and then hop on to the next flight back home.

If they do so, it’s going to cost them dear. Beginning October, they will need to obtain “official permission” before they can make real estate specific announcements in Dubai.

This will apply across all advertising and marketing platforms, including on digital/social media.

In a major push to bolster consumer protection, the Dubai Land Department is cracking down on any local campaigns promoting overseas property deals. They can still do so, but will need preapproval from the Land Department in all instances.

“For developers abroad, it means having a licence in Dubai for announcements made through a registered real estate broker in Dubai,” said Ali Abdullah Al Ali, director of the Real Estate Licensing Department.

“And the broker must obtain the permits required. There are conditions and requirements to be submitted to obtain the permit.”

In the case of non-compliance with the circular issued by the Real Estate Regulatory Agency (Rera), the regulatory arm of Land Department, by those placing advertisements on overseas property, fines of Dh50,000 will be applied. If there are repeat violations within the same year, the severity of the fines too will be scaled up.

“There have been previous occasions that some real estate cases were filed regarding fraud operations because of false ads,” said Al Ali.

Clean-up of market

“This activated the decision to apply it more broadly to all types of advertising, including on social media. We have issued a formal circular to all real estate companies operating in Dubai and giving them a deadline to get the required permits from the beginning of October.” (The new requirements on real estate ads is subject to approval by Rera. It is based on an Executive Council Resolution No. 25 for 2009.)

Industry sources suggest the move by Rera will go a long way in cleaning up the business of selling overseas property in Dubai.

“In most instances, a buyer who is putting up the down payment on such a property will have no idea about the credentials of the developer behind it or of the foreign broker selling it here,” said one source.