A new agreement between the Real Estate Regulatory Agency and the Ministry of Labour in Dubai is set to increase transparency and professionalism in the emirate’s property market, it is claimed.
The deal will see real estate brokers in the emirate officially recognised as a separate professional category and allow RERA to further clampdown on rogue operators.
New labour cards and residency visas issued to property brokers will now include their specific job title, replacing the previous practice of categorising them all as sales staff, RERA said in a statement.
Marwan bin Ghulaita, chief executive officer of RERA, said the aim of the move was to increase transparency and professionalism in an industry that has been hit hard by the impact of the global economic crisis.
‘This is the first step towards a complete classification of the real estate professions in Dubai. The overall effect will be to increase transparency and professionalism across the sector. This in turn will boost confidence in property dealings and in the networks of agents and third parties investors depend on to execute their transactions,’ he explained.
Last year, RERA announced plans to stop freelancers from operating in the emirate’s property sector under an agreement signed with the Department of Economic Development.
RERA is also close to finalising a comprehensive agreement with the Ministry of Labour that will see all the professions it registers such as valuers, consultants, mortgage brokers, agents, and surveyors, formally recognised as separate job categories by the Ministry.
‘The Ministry has now approved the first step of officially recognising broker as a professional category and this will be included in all the related professional and operations documents,’ Bin Ghulaita added.
Meanwhile it has been revealed that Barclays, Britain’s second largest bank, has won the first foreclosure orders in Dubai, clearing the way for lenders holding about $16 billion of Dubai home loans to take action when borrowers don’t pay.
The ruling shows that Dubai’s market is ‘evolving and is poised to come at par with other mature markets of the world,’ the bank said.
Both lenders and developers in the UAE have tried to stem rising defaults through out of court settlements with distressed customers after falling prices left buyers with mortgages worth more than their properties.
That has helped minimise the amount of bad debt on their balance sheets and kept repossessed houses off a market that’s already suffering from too much supply but a 68% increase in bad debt has forces some like Barclays to take action.
Islamic lender Tamweel, the emirate’s biggest mortgage bank, revealed that it has several of its own foreclosure claims pending and estimates about 3% of its mortgages are in default.
‘Banks will be more aggressive in pursuing legal action if they see the process is efficient. They were trying to avoid the courts and restructure most of their loans but once they see a precedent has been set they will be encouraged to push more cases through,’ said Antoine Yacoub, a banking analyst at Moody’s Investors Services.