Property contracts in Dubai will become mandatory from 01 May in a bid to clarify the roles of buyers, sellers and brokers, the Dubai Land Department has confirmed.
The new contracts are expected to speed up property transactions, make it easier for sales to be conducted without using an agent and promote confidence in the emirate’s property market.
There are three types of contract which can be downloaded from the government website. One between a seller and buyer, a contract between seller and broker and a contract between buyer and broker. They become formal after they are recorded at the land department.
According to Land Department director general Sultan Butti bin Mejren, the contracts will also make it easier to police property contracts, limit misinterpretation among parties and reduce the ability of bogus brokers to operate.
He pointed out that standardized property contracts have existed since 2008 but they were not obligatory. ‘The new agreements will also help us to rid of some of the problems that may occur because of a lack of clarity,’ he explained.
‘Having unified contracts between the parties not only avoids the misunderstanding and misinterpretation of articles that could previously have occurred, it also guarantees the rights of all the stakeholders involved,’ he added.
He also pointed out that having compulsory contracts adds to the enhancement of the competitiveness of the real estate market in Dubai and moves it to a new phase of leadership and excellence by establishing the principles of transparency and professional standards.
‘It will be of great value in assisting us to keep pace with the real estate boom currently taking place in Dubai and will promote confidence in the market generally,’ he said.
It is regarded as yet another sign of a maturing real estate market in Dubai which suffered a slump during the global economic crisis when prices slumped by 60% in many locations.
Values have significantly risen in the past year and real estate consultant JLL predicts that prices are set to rise 10% to 15% this year and rents by up to 20%.
The Dubai government has announced several new initiatives to help contain price growth at a stable level, while trying to avoid another bubble.
This article was republished with permission from Property Wire.