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Abu Dhabi, UAEWednesday 17 October 2018

Dubai property marketing permit procedures must be followed

The intricacies of marketing a property - whether off plan, completed or based in DIFC - in Dubai.
Marketing a property in Dubai is an intricate process. Delores Johnson / The National
Marketing a property in Dubai is an intricate process. Delores Johnson / The National

I have a question with regards to the new law recently introduced, mandating that real estate brokers must now obtain a permit prior to advertising any property for rent or sale. Furthermore, my understanding is that the broker must submit a copy of the title deed to apply for the permit – but what happens if the title deed is not available? For example, many developers are offering long-term payment plans on their properties where the investor pays, say, 50 per cent up to completion then the remaining 50 per cent over two or three years. From what I have seen, the title deed can only be issued once 100 per cent payment has been completed. Does that mean the investor will be unable to obtain a permit to sell or rent the property after completion because they don’t have a title deed? There surely must be an alternative document acceptable by the Dubai Land Department (DLD)? Similarly if it is the DLD itself, which has delayed issuance of the title deed, then it sounds like the investor is stuck and unable to sell or rent their property? While I fully support additional legislation introduced to safeguard all stakeholders, I’m not sure how this new rule is going to work in practice in the scenarios described. Can you shed any light on the matter? AJ, Dubai

The DLD will issue marketing permits, via the Trakheesi system, to real estate broker agencies (provided they are also Rera-registered) under the following three categories:

• Off -plan properties – no title deed

• Ready properties – with title deed

• Dubai International Financial Centre (DIFC) properties

For off-plan properties, you are correct that there is no title deed issued until some time after handover (provided the pre-title registration Oqood has also been applied and paid for). The property can still be marketed by brokers provided they obtain two documents from the developer:

• A no objection certificate (NOC) giving permission to market the property

• A valid agency agreement

For the issuance of the Trakheesi permit, an agency actually only requires to upload the NOC, but the developer will not issue any NOC without having a valid agency agreement between developer and broker. For ready properties, a broker will have to upload the title deed and the correctly filled out and signed Form A into the Trakheesi system. The Form A is an agreement between seller and broker agency and it outlines many points such as fees, exclusive or non-exclusive mandate, asking price etc. Agents are not allowed to market any ready property without this Form A, otherwise they will be liable to a fine of up to Dh50,000. To obtain the Trakheesi permit for DIFC properties requires only the Form A to be submitted by the agency.

It is worth pointing out that while this system has been successful in clearing out all the fake or unwanted listings from online portals, it has also come at a price as now the agent’s marketing costs have increased dramatically. With this in mind, the day will come in the not too distant future where the seller will be asked by the agency to pay for this advertising if they have not agreed to pay commission fees. Gone are the days of commission fees paid just by the buyer, Dubai is moving closer to the system of buyer agents and/or seller agents, both of which will charge for the services rendered.

Mario Volpi is the chief sales officer for Kensington Exclusive Properties and has worked in the property industry for over 30 years in London and Dubai. The opinions expressed do not constitute legal advice and is provided for information only. Please send any questions to mario.volpi@kensington.ae

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