Dubai's real estate regulator slaps company with Dh50,000 fine for breaching escrow rules
Rera also urged real estate companies to abide by laws that regulate the sector's advertising and marketing practices
Dubai's Real Estate Regulatory Agency slapped a Dh50,000 fine on a property company found in breach of laws related to escrow accounts and the advertisement of homes for sale.
The regulator on Saturday called on real estate companies to abide by regulations that oversee advertising and marketing practices.
“Through the processes of control and auditing of real estate advertisements undertaken by Rera’s cadres, a company was found to have committed a group of violations related to the promotion and advertising of real estate projects not registered under its name,” Rera said.
The regulator said the company contravened the rules by issuing investment contracts to customers of those projects, receiving amounts outside the escrow account and launching a promotional campaign without obtaining the necessary permits from the concerned authorities. It, however, did not name the company.
Rera said it reviewed the breaches and decided to impose a Dh50,000 fine on the company. Rera also warned the company that it would double the fine if it was found to be non-compliant, as well as suspend its licence, close its office and refer it to prosecutors.
Rera specifically referenced Law No (8) of 2007 on the Matter of Escrow Accounts for Real Estate Development.
The law was issued to regulate developers and safeguard buyers’ money with regards to off-plan property purchases in Dubai.
Dubai has passed a number of property-related laws over the past few years to protect purchasers and developers, as well as encourage development and investment within the emirate.
Real estate, tourism and retail are among the top economic drivers for the emirate, which has transformed into a major financial and business hub in the region.
Dubai recorded 1,824 property sales transactions worth more than Dh3.62 billion in April amid stay-home measures to contain the spread of Covid-19, according to Property Finder.
Off-plan property sales dominated last month’s transactions, accounting for 70 per cent of all activity, primarily in the communities of Villanova for villas or town houses and Dubai Creek Harbour for apartments, according to a new report by Data Finder, the data platform of Property Finder.
Dubai’s real estate market has softened due to concerns about an oversupply of properties and a drop in oil prices that began in 2014.
The property market could bounce back strongly in 2021 on the back of increased economic activity related to Expo 2020 Dubai, according to Hussain Sajwani, the chairman of Damac, the UAE’s third-biggest listed developer.
In an interview with Bloomberg TV, Mr Sajwani said new property launches in Dubai could come to a halt this year as the Covid-19 pandemic squeezes demand.
Updated: May 10, 2020 01:54 AM