Dubai to ban agencies and brokers who flout property rules
DUBAI // Agencies and brokers who breach the emirate's real estate laws will be banned from any future property-related business in Dubai, a senior government official has said.
The move is part of a series of measures taken by government to regain market confidence following recent multi-million-dirham property scams that have shaken the Dubai market.
Two major property scams have been revealed in the past two weeks: the owner of Shamyana Entertainment made off with a year's rent from 136 tenants he illegally sublet to; and two property agents from Marks Falcon Real Estate and FHS Properties bolted with their clients' half-yearly rent payments.
"We are going to blacklist the companies that are found to be involved in these scams," said Yousef Al Hashemi, the director of the Real Estate Regulatory Authority's (Rera's) licensing department."We are already taking action against companies that violated rules and have sent notices to the economic department and Ministry of Labour that all transactions of these companies must be stopped."
Other steps to be taken by Rera include raising the security deposit required from property-management companies to practise, increasing fines and a black-point system to punish companies.
Property agencies that deal in leasing are required to deposit a Dh5 million guarantee bond with Rera to become licensed.Discussions are taking place between the Ruler's office, the land department and the rent committee to increase that bond to Dh10 million, or property of the same value.
The current fine of Dh50,000 for breaching any of Rera's bylaws will remain, said Mr Al Hashemi, but companies caught repeating an offence will pay Dh100,000.
There are 6,000 registered agents in Dubai, working for 800 companies of which 117 have subleasing licences.Rera fined 22 property companies a total of Dh900,000 in June for registration offences.
"These are steps in the right direction and the government has moved quickly to respond to an issue not of their making," said Shahram Safai, a partner at Afridi & Angell legal consultants.
Mr Al Hashemi also warned residents check their landlord's title deed and the broker's registration, and register tenancy agreements under the Ejari scheme.
Updated: September 20, 2012 04:00 AM