x Abu Dhabi, UAETuesday 23 January 2018

New confidence in the property market

The new rental dispute resolution rule changes represent a major reform for the UAE’s real estate sector

The new rental dispute resolution rule changes represent a major reform for the UAE’s real estate sector.

As The National reported this week, the Rent Dispute Settlement Centre in Dubai will speed up the legal process by ruling on cases in a maximum period of 30 days, as stated in a decree issued by Sheikh Mohammed bin Rashid, the Prime Minister and Ruler of Dubai.

The new settlement centre will rule in rent disputes even in the emirate’s free zones, offering protection to investors and providing them with a precisely defined legal recourse. Many have experienced complicated and occasionally opaque processes since the onset of the economic crisis.

Appeals will be permitted in certain cases, such as those concerning eviction notices and those involving more than Dh100,000 in dispute. Individual investors who had shares in delayed or cancelled property projects will benefit from having a separate court.

According to the decree, the centre will work with Real Estate Regulatory Agency (Rera) on projects cancelled under law 13 for 2008. The judicial and legal representation will look at the liquidation of projects and determine who should be compensated and by how much.

This is an important step in the continuing development of the real estate market. Certainly, the property sector in Dubai will benefit from further prudent oversight. Rents have been soaring in recent months. Many Dubai residents have contacted Rera to complain about rising prices. Indeed, it is not uncommon for rents to have risen by as much as 50 per cent since last year.

The establishment of such a centre will hopefully also help to cool Dubai’s surging rental market and speed up legal processes. This, in turn, will inject confidence in the property market and encourage more investors to come to Dubai.

The global economic crisis has offered us many lessons. Two of them are that the sustainability of the local property market requires more oversight and faster dispute resolution. Both of these lessons appear to have been heeded.