EVERYTHING YOU NEED TO KNOW ABOUT RERA

One of the characteristic features of investments in the real estate market in Dubai is the palpable sense of safeness and quickness with which properties` selection, purchase or leasing, and registration processes occur.

His Highness Mohammed bin Rashid Al Maktoum, Prime Minister of the UAE, has approved the establishment of the Real Estate Regulatory Agency in Dubai. With the increasing demand for buying, selling, and leasing real estate, the goal was to secure, protect, and guarantee the rights and needs of all related parties, including real estate agents, real estate developers, real estate owners, and buyers.

The first established structure was the Dubai Land Department or DLD. The second structure, a subdivision of the DLD, is the Real Estate Regulatory Agency or RERA.

Below we will talk about the most critical points and responsibilities of RERA Dubai:

What does RERA, Dubai mean?

First things first, RERA is a division of the Dubai Land Department, which is the governing authority. RERA is the agency that confirms the laws and regulations of the real estate sector, manages market development, and sets the necessary rules and regulations for foreign investors in Dubai. In addition to this, RERA collects all the details related to tenants and real estate owners to resolve all disputes and their associated tasks. RERA also closely monitors the legality of banks, developers, and insurance and law companies` actions. In addition, it monitors the trustworthiness of real estate advertising in media as well.

Also Read: How To Register Your Tenancy Contract with Ejari In Dubai

What are the responsibilities of RERA Dubai?

The RERA real estate had a very successful role in establishing and building an integrated system to regulate and control the real estate investment process and impart transparency and efficiency to this sector. As a result, real estate ensures safer deals and positive interactions between real estate developers in Dubai, buyers, owners, and agents. In addition, this system guarantees the rights of everyone associated with the real estate sector, including sellers, renters, and property management companies.

In addition to its constant effort to regulate the real estate market by granting permits to developers, owners, real estate agents, and property management companies, Everyone who wants to work in this sector as an agent or owner must register with RERA to become legally certified.

So, investors or buyers should always take the first step in the buying or leasing process to ensure that the developers you`re dealing with are registered with RERA. Also, they must have their number, and this also includes the need for upfront financial payments to banks and institutions approved by RERA.

In general, many main legal issues and development of this field all fall to the employees of RERA. For several years, Dubai has had a program to transition to a "paperless policy" of work where their clients are concerned. In addition, RERA is making significant efforts to develop online legal services, including the possibility of solving bureaucratic issues and the collection and processing of documents via the Internet.

What`s more, RERA has the authority to issue licenses too. So together with the DLD, RERA has created several online services and applications that allow one to obtain a business license in Dubai or issue an electronic version of the NOC.

Finally, the Real Estate Regulatory Agency in Dubai is responsible for organizing and registering lease contracts to follow up on all published real estate advertisements. In addition to supervising studies related to this sector, informing people of all new decisions related to buying and renting real estate, and organizing the list of developers, Real estate agents, and licensing of their commercial activities.

Dubai Land Department, RERA FORMs and Their Purpose

RERA has introduced three types of forms to ensure the transparency of real estate transactions and each one has a purpose:

• FORM A: Agreement between the listing agent and seller 
• FORM B: Agreement between a property buyer and agent 
• RERA FORM F: Agreement between a property buyer and seller 

Why is it necessary to be up-to-date with the laws of RERA Dubai?

As you can notice, even if you are a newbie investor, RERA regulates and helps solve the problems of different parties in the real estate market and provides training and consultation services. In addition, it issues the most relevant and up-to-date information on what`s currently happening in the market. So whether you are a tenant, seller, buyer, agent, or real estate developer, you must constantly follow all the regulations and laws issued by RERA Dubai and their updates.

RERA Registration Process

The process of obtaining RERA registration involves several key steps:

1. Obtain the Prescribed Application Form

• State-Specific Forms: RERA application forms may vary slightly from state to state. Visit the official website of your state`s RERA authority to download the appropriate form.

2. Complete the Application Form

• Accurate Information: Provide all required details accurately and completely. This typically includes information about the applicant (individual or entity), the project (if applicable), and the proposed activities.

3. Gather Necessary Documents

• Supporting Documentation: Prepare the required documents, which may include:

4. Submit Application and Documents

• Multiple Submission Methods: RERA authorities often accept applications and documents through various channels, such as:

5. Pay

• Accepted Payment Methods: RERA authorities typically specify the accepted payment methods for registration fees. Common options include:

The RERA authority will review your registration application and supporting documents within 30 days. If approved, they will issue a registration certificate, confirming your compliance with RERA regulations and authorizing you to engage in real estate activities. If no response is received within the specified timeframe, it may be considered as an acceptance.

RERA Compliance and Rules

Before you sign on the dotted line

Familiarizing yourself with RERA rules is crucial before signing a rental agreement in Dubai. 

Understanding RERA’s Tenancy Laws

• Law No. (26) of 2007: This law regulates the relationship between landlords and tenants in Dubai. 
• Law No. (33) of 2008: Amends certain articles of Law No. (26) of 2007, further governing the landlord-tenant relationship. 
• Decree No. (26) of 2013: Establishes the Rental Disputes Settlement Centre (RDC) to handle all rental disputes in Dubai. 
• Decree No. (43) of 2013: This decree specifically governs rent increases in Dubai.

Key Takeaway from Dubai Tenancy Law

• Always read and understand the terms and conditions of your tenancy contract before signing.

Terms of the RERA Tenancy Contract in Dubai

• Amending Tenancy Contracts: According to Article 14 of the Dubai Tenancy Law, if either party wishes to modify the contract terms, they must notify the other party at least 90 days before the contract expires. 
• Terminating Tenancy Contracts: Article 7 of the RERA tenancy law states that valid tenancy agreements cannot be terminated unilaterally during the term by either party unless both parties agree. The tenancy relationship can be transferred to the heirs in case of the death of the tenant or landlord, and they can choose to terminate it with a 30-day notice. 
• Early Termination: There is no specific law governing early termination in Dubai. If you want to break the lease, you must adhere to the early termination clause in your contract, if any. Landlords may ask for compensation for an early termination. 
• Vacating Notice to the Landlord: As per Law No. (33) of 2008, tenants are not required to provide notice before vacating upon contract expiry. However, your tenancy contract may have a specific notice period clause. Failing to comply with this clause can result in the landlord demanding compensation. Remember, the landlord must return your security deposit after deductions (if any). 
• Tenancy Law Regarding Evictions: According to Article 25 of Law No. (26) of 2007 (amended by Law No. (33) of 2008), landlords can evict tenants under specific circumstances, including non-payment of rent, subleasing without permission, using the property for illegal activities, damaging the property, or violating the tenancy contract terms. In the case of commercial properties, landlords can evict tenants who cease operations for an extended period without valid reasons. Landlords can also seek early termination upon expiry if they intend to reconstruct, renovate, sell the property, or use it for themselves or close relatives. In such cases, a 12-month written notice is mandatory.

Rent Increase in Dubai

• Rent Increase Regulations: Article 9 of Law (26) of 2007 requires that the mutually agreed-upon rent value in the tenancy contract cannot be increased before the two-year mark from the original contract date. Landlords must inform tenants of any intended rent increase at least 90 days before the contract expires. Tenants have 60 days to accept or refuse the increase. If an agreement cannot be reached, a rental dispute can be filed at the Rent Dispute Settlement Centre. 
• Maximum Rent Increase Limits: All rent increases must comply with Decree No. (43) of 2013, with a maximum increase of 20% since December 21st, 2013. The maximum increase varies depending on the current rent compared to similar units` average rent. For instance, there is no increase if the current rent is 10% less than the average rent, and a 5% increase is allowed if the current rent is between 11% - 20% less than the average rent. Landlords and tenants can use the RERA rental index calculator to determine the eligible rent increase ratio.

RERA Developer Obligations 

These are stringent requirements designed to protect buyers` interests. Developers must register projects, adhere to timelines, provide accurate information, and ensure quality construction. Failure to meet these obligations can result in penalties or legal action.

Responsibilities of Tenants and Landlords

Don’t forget to search about your responsibilities as a tenant and landlord to comply with RERA rules and obligations. Tenants are typically obligated to pay rent on time, maintain the property, and adhere to lease terms. Landlords, on the other hand, are responsible for ensuring the property is habitable, addressing maintenance issues promptly, and respecting tenants` privacy. By understanding and fulfilling their respective duties, both tenants and landlords can contribute to a harmonious and successful rental agreement.

RERA Property Disputes 

RERA property disputes arise when there are disagreements between buyers and developers. These disputes can encompass issues such as delays in possession, quality concerns, or non-fulfillment of promises. RERA provides a platform for resolving these disputes through mediation or arbitration, aiming to protect buyers` rights and ensure fair practices in the real estate market.

Benefits of RERA

Here are some of the key RERA benefits:

Legal and Regulatory Compliance

• Authorization: RERA registration grants agents legal authorization to advertise, market, sell, or lease real estate properties within RERA-regulated areas. 
• Adherence to Regulations: Registered agents must adhere to the regulations and guidelines set forth by RERA, ensuring compliance with industry standards and minimizing legal risks.

Enhanced Credibility and Trust

• Professional Image: RERA registration enhances an agent`s professional image and reputation. It signals to clients that the agent is committed to ethical practices and industry standards. 
• Consumer Confidence: RERA registration instills confidence in clients as it demonstrates the agent`s credibility and trustworthiness.

Access to RERA-Approved Projects

• Expanded Opportunities: Only registered agents can typically deal with RERA-approved real estate projects. This provides agents with access to a wider range of properties and potential clients.

Buyer Protection

• Transparency and Accountability: RERA regulations promote transparency and accountability in real estate transactions, protecting buyers from fraudulent activities and unfair practices. 
• Grievance Redressal: RERA provides a mechanism for buyers to file complaints and seek redressal if they encounter issues with real estate agents or transactions. 

Professional Development and Networking

• Industry Knowledge: RERA registration often requires agents to undergo training and education to stay updated on industry trends, regulations, and best practices. 
• Networking Opportunities: RERA registration can provide opportunities for agents to network with other professionals in the industry, share knowledge, and collaborate on projects. 

RERA impact on property buyers

RERA has significantly enhanced the property buying experience in Dubai. By establishing transparent regulations and protecting the rights of buyers, RERA has instilled confidence in the real estate market. Property buyers now have greater assurance regarding the authenticity of property transactions, fair pricing practices, and the availability of dispute resolution mechanisms. This has ultimately contributed to a more secure and reliable property market for buyers.

Conclusion

That concludes our guide to the essential information about RERA in Dubai that buyers, sellers, and tenants should know. Whether you`re a real estate agent or a property buyer, familiarizing yourself with RERA`s regulations is essential.

Preparing to lease a home in Dubai? Find out all about the tenancy contract with Ejari in Dubai that you may not know about, such as how you can register online, fees for the property registration, who`s responsible for it, and more.

Like the information? Stay up-to-date with the latest Dubai Real Estate News at Driven Properties.

FAQs

1. How does RERA benefit property buyers?

RERA is like a knight in shining armor for property buyers, protecting them from the dragons of fraud and unfair practices. It’s a beacon of transparency, illuminating the often murky waters of the real estate market. With RERA on your side, you can rest assured that your rights are safeguarded, and any gripes you have will be heard. Plus, RERA is all about keeping things moving, and making sure projects aren’t stuck in limbo. It’s like having a reliable partner who always delivers on time.

2. What are the key provisions of the RERA Act?

RERA serves as a basis of consumer protection in the real estate market. Its comprehensive provisions offer a multi-faceted shield for property buyers. By mandating the registration of projects and developers, the RERA Act ensures transparency and accountability. Furthermore, its disclosure requirements empower buyers with detailed project information, enabling informed decision-making. To safeguard buyer funds, RERA’s escrow account mandate provides a financial safety net. Additionally, the Act’s dispute resolution mechanism offers a fair and efficient avenue for addressing concerns. Finally, RERA’s enforcement powers serve as a deterrent, ensuring developers adhere to regulations.

3. How can a property be registered under RERA?

To register a property under RERA, the developer must submit the necessary documents and complete the registration process. The exact steps may vary slightly depending on the specific jurisdiction but generally involve:

1. Project registration: The developer must submit a detailed application for project registration, including project plans, amenities, timeline, and pricing information. 
2. Developer registration: The developer must also register with RERA as an individual or entity. 
3. Escrow account creation: The developer must open an escrow account to hold funds received from buyers. 
4. Submission of required documents: The developer must submit any additional documents required by RERA, such as project approvals, environmental clearances, and financial statements. 
5. Approval and issuance of RERA registration certificate: Once the developer has submitted all the necessary documents and fulfilled the requirements, RERA will review the application. If the application is approved, RERA will issue a registration certificate to the developer. This certificate confirms that the project and developer are registered with RERA and are authorized to sell property units to buyers.

4. What documents are required for RERA registration?

The documents required for RERA registration may vary depending on the jurisdiction and the type of project. However, some common documents include:

• Project plans and drawings 
• Building permits and approvals 
• Environmental clearances 
• Financial statements of the developer 
• Copies of agreements with contractors and suppliers 
• Escrow account details 
• Declaration of project completion and possession

5. What are the rules developers must follow under RERA?

RERA imposes several rules and regulations that developers must adhere to. These include disclosing detailed information about their projects, completing projects within specified timelines, maintaining escrow accounts, addressing buyer complaints promptly, and complying with other relevant laws and regulations.

6. What penalties do developers face for non-compliance with RERA?

Developers who fail to comply with RERA`s provisions face various penalties. These may include financial penalties, suspension or cancellation of registration, legal action, and damage to their reputation. Non-compliance can have significant consequences for developers, as it can deter potential buyers and erode trust in the real estate market.