Dubai Property Law

His Highness Sheikh Mohammed bin Rashid Al Maktoum, in his capacity as the Ruler of Dubai, issued the Dubai Law No. (4) of 2019 (“New Law”) pertaining to the Real Estate Regulatory Agency (“RERA”) initially established by law No. (16) of 2007 as predominantly the regulatory arm of the Dubai Land Department (“DLD”).

The New Law provides for a reorganization of RERA’s legal capabilities and capacities and defines a set of important objectives for RERA, including the contribution to the advancement of the real estate sector through an integrated system of regulatory and control measures which shall enhance its role in the overall economic development of Dubai, provide an assuring and supportive environment for the real estate development projects to safeguard the rights of both real estate developers and investors, keep pace with the steady growth of the real estate sector and all related activities, enhance the role of UAE nationals in this sector and implement programs that will enable them to participate in real estate activities, as well as to develop the codes of principles and ethics required for practicing real estate activities.

The New Law confirms that RERA will continue to exercise certain powers established under the previous law, including the organization and supervision of real estate development escrow accounts, approving qualified banking and financial institutions to manage these accounts, and the adoption of rules governing practitioners of the real estate development activity, the sale and rental of real estate, real estate brokers, real estate assessment and joint ownership of real estate property.

The New Law came with a number of key modifications and additions to RERA’s functions and specialties broadening thereby its scope of authority over real estate activities in the Emirate. The newly introduced powers include that RERA shall now be responsible for organizing and licensing real estate activities and supervising the practitioners of these activities in order to ensure their compliance with the laws and regulation governing the real estate sector. RERA will also be responsible for the supervision and inspection of the management, operation and maintenance of joint real estate properties, proposing the necessary legislations to regulate the work of real estate practitioners, and issuing the necessary regulations for the training and qualification of employees in the organizations licensed to practice real estate activities through the Dubai Real Estate Institute (“DREI”), in addition to the registration and issuance of identification cards to practitioners of real estate industry.

By virtue of the New Law, RERA shall now consider and decide on complaints brought against real estate practitioners and take the appropriate actions in this regard, study and approve real estate development projects in the Emirate and supervise their execution and issuing the necessary decisions and recommendations in this respect.

In addition to the power to control and monitor real estate advertisements, RERA shall now have the right to issue the necessary approvals for the content of such advertisements in the Emirate of Dubai, and in this regard will now also include special development zones and free zones (such as the DIFC) in coordination with their competent authorities.

In coordination with the DREI, RERA will conduct educational and awareness programs on the rights and duties of the parties involved in the real estate sector, in addition to preparing and updating policies and studies to achieve a balance between supply and demand in the real estate market.

According to the New Law the DLD shall replace RERA in the exercise of the functions related to the registration of lease contracts and regulating the relationship between lessors and tenants and other functions related thereto, in accordance with the existing legislation in the Emirate. Any provision of any other legislation and specifying the competencies of RERA are repealed to the extent that it contradicts the provisions of this New Law.

The New Law has been published in the Official Gazette on 17 September 2019 and has subsequently come into force and effect from the said date as stipulated by the provisions of the New Law. The Chairman of the Dubai Executive Council shall issue the necessary decisions to implement the provisions of the New Law, which supersedes Law No. (16) of 2007 on the establishment of RERA.