Cityscape Abu Dhabi: More clarity and transparency concerning the licensing of developers could help protect UAE property buyers.
Calls for more clarity for UAE property purchasers
Transparent and stringent licensing requirements for developers should be introduced to better protect buyers and encourage investment in Abu Dhabi's property market, according to a leading legal expert.
The recommendation was among a list of personal suggestions made by Dr Nimer Basbous, head of legal at HSBC Bank Middle East, on the second day of the Cityscape Abu Dhabi conference.
While new regulations are expected to be unveiled by the Abu Dhabi Government this year, Dr Basbous said that existing laws could be used to protect consumers.
"Everyone is waiting for more laws and more regulation in Abu Dhabi, but the question is whether there is an existing legal framework in Abu Dhabi which governs the issues of property law and mortgages," he said, speaking in a personal, rather than professional, capicity. "In my opinion, there is actually an existing framework."
"Abu Dhabi has got a decent legal framework which provides for and protects customers and investors' interests, which can be found in civil code, other federal laws and Abu Dhabi legislations," he said.
However, he recommended the introduction of more transparent licensing of developers, including a minimum capital requirement, to ensure that companies are able to finish the projects they start.
There should be a framework for the registration of interests in properties under construction and consumer protection regulation around sale and purchase contracts, to prevent improperly high service charges, he said.
Dr Basbous said there was a need for clear rules on what happens when a developer becomes insolvent, a situation that has become more pronounced in the wake of the global financial crisis.