Rules for overseas property buyers

DUBAI // Regulators in Dubai have issued new rules to protect the interests of people buying property overseas.

Brokers advertising homes or land for sale outside the UAE now require a permit.

To obtain one they must have access to the property’s title deed, a letter from the country in question describing the system of foreign property ownership, an agreement between the owner and the broker representing them, and a copy of the property certification from the UAE Embassy and Foreign Ministry that is translated into Arabic by a legal translator.

Permits to advertise homes for sale locally have been a requirement since October. The rules “encourage real estate brokers to be accurate and cautious in any campaigns that promote properties abroad”, said Ali Al Ali, director of the Real Estate Regulatory Agency.

Better regulation of the market should be welcomed, said David Godchaux, chief executive of the property firm Core Savills.

Mr Godchaux said some brokers were abusing their position by “selling international properties that may not exist, or may not exist in the form that they are selling them”.

But he warned that potential buyers still needed to do their homework.

“I’m afraid that to a certain degree, this kind of regulation will give artificial confidence to buyers that they can’t be cheated,” Mr Godchaux said.

“And that’s not true. Even if you have all of the documents in place, it’s not going to stop some brokers or developers from selling really bad deals.”

Robert Pearce, head of residential development and investment at Chestertons in London, said the new rules were “a move in the right di- rection towards a more mature regulatory environment in the real estate industry in the UAE.

“As we’ve seen in many global markets, the lack of regulation only encourages unscrupulous entities to try and use loopholes to get away with what most people would class as bad business practice.” He argued that the aim was not to cover properties sold in mature markets such as the UK, the US and Australia, where overseas buyers were already well protected by the law, but “to protect consumers who are buying in markets that offer less favourable legal frameworks”.

Mr Pearce said: “There’s plenty of those countries out there, and a lot of that property stock gets advertised in the UAE.”