Developers welcome Rera rule on property ads

Under the new rule, which came into effect on October 1, developers and marketers need to obtain online permission from Rera before issuing any property announcements or ads through print, radio and social media.

The Real Estate Regulatory Agency's new regulation requiring permission to announce or advertise on-shore and off-shore properties in Dubai has been welcomed by developers as a strategic move to regulate the market and protect investors from misleading ads.

Under the new rule, which came into effect on October 1, developers and marketers need to obtain online permission from Rera - the regulatory arm of the Dubai Land Department - before issuing any property announcements or ads through print, radio and social media. Violators of the rule will be fined Dh50,000.

Welcoming the new rule as an effective way to increase transparency and check any irregularities by protecting the interests of customers from misleading advertisements, real estate industry players, however, said the rule could add a layer of time-consuming process to marketing campaigns.

Ziad El Chaar, managing director, Damac Properties, said the new requirement would bring added transparency and contribute to the overall progress of the sector, which is in the best interest for all stakeholders, including investors as well as developers and brokers, ultimately providing more assurance to property buyers by preventing any misrepresentation. "We at Damac Properties commend the efforts of the Real Estate Regulatory Agency."

Rizwan Sajan, chairman of Danube Properties, said Rera and every government authority in Dubai have consistently been working to make the facilities faster and more robust in line with the leadership's vision of transforming Dubai into a smart city.

"The new regulation is no surprise and we can already anticipate the benefits companies involved in real estate activities will reap from this new law. We have always ensured all our marketing materials are in line with government requirements and felt there was a need for a strict law to make the competition more consistent. This will ensure that investors in Dubai real estate, no matter where they are located, will receive correct information through any marketing media," said Sajan.

Raj Chinai, managing director, Sobha Group, which has major real estate projects in India and Dubai, said the Rera move represents a positive step to help ensure that investors are protected from misinformation or misrepresentation. "Ultimately, from a long-term perspective, this should help attract global investors and further strengthen the transparency between real estate investors, brokers and developers."

Impact on ad industry
Allaying fears of any negative fallout of the rule on the advertising industry, Mohan Nambiar, CEO of MEC Mena, a subsidiary of Menacom, and a veteran of the UAE ad industry, said since the rule is more of a regulatory process, it would not have any impact on onshore or overseas advertising volume apart from the time lag needed to complete all procedures.

For the ad industry, which is reeling under pressure on the back of a projected 15 per cent lower ad spend this year compared to 2015, the new rule is of little consequence as the real estate sector, including overseas property developers, accounts only for 15 to 17 per cent of the total ad spend now compared to its share of 33 per cent during the boom days, Nambiar said.

The new Rera regulation, which is being implemented in the wake of several complaints about false advertisements, is a modified version of the advertisement guidelines given to brokerage companies several years ago. It applies to all real estate companies who advertise property from inside or outside the UAE.

In 2012, Rera had ordered all approved property brokerage firms to register their properties on Simsari.ae - the region's only authenticated multiple listing services - before marketing or face penalties.

As per the new stipulation, property marketers must obtain a permit through the Trakheesi system on the official Dubai Land Department website. The circular, outlining all of the updated requirements, was sent out by Marwan Ahmed bin Ghalita, CEO of Rera.

Fine for violations
From October 1, any announcements not bearing a real estate permit number will be illegal and "in the event of non-adherence, all necessary legal procedures shall be taken against the violating companies and a fine of Dh50,000 will be paid by offenders," Rera said in a statement.  

Ali Abdulla Al Ali, director of the real estate licensing department, said the announcement reflected Rera's commitment to protect investors and regulate the market by preventing the emergence of any irregularities. "However, the investor should act carefully to protect himself by checking all documents and by requesting information from the broker about the property offered. Customers can now easily check licensed brokers as well as the validity of ownership data through the Dubai Brokers smart application."

As per the circular, companies should not advertise Dubai properties from either within or outside of the emirate without obtaining official permission. "There are several conditions that must be met by the concerned parties, and DLD is currently under the process of activating escrow accounts for real estate brokers marketing properties from outside the UAE. Furthermore, the inspection and control section works to control real estate advertisements and to ensure that advertisers obtain all required permits," Rera said.

According to Al Ali, marketers must submit a copy of the property title deed, a letter from the country in question describing the method of foreign ownership of properties, a marketing agreement between the real estate property owner and real estate brokerage firm and a letter from the real estate brokers indicating the type of property (for example apartment, villa, building, completed or off-plan building) while applying for a permit for marketing real estate properties from outside the UAE.

- issacjohn@khaleejtimes.com