First step to a solid property market

Regulations under the new real estate law will help protect the rights of everyone

Property brokers will be held to higher professional standards from January 1. (Lee Hoagland / The National)

Many of us are able to recount unpleasant stories about renting or buying property in Abu Dhabi, which is why the new law requiring those working in this sector to meet high professional standards is such good news. The law comes into effect on January 1, requiring developers, brokers, assessors, surveyors and auctioneers to have a minimum amount of training before being granted a permit from the Department of Municipal Affairs to operate in the emirate.

This will not just strengthen the property market itself but will also increase the confidence of the public who deal with those working in the industry. Yousef Al Kuwaiti, a director at the DMA, said the training will educate real estate professionals about their rights and duties both to the owner and the buyer or renter. Better service ought to follow from this, helping improve industry standards generally.

We have the chance to see what has worked in other countries that have already gone through this process. Many require real estate professionals to do a set number of hours of formal training before being granted a licence. These courses vary in terms of length and the type of training. Brokers, for example, often require at least three years experience and training in their field and only then do they have the chance to apply for a licence.

But, as Ben Crompton, managing director of Crompton Partners, told The National, these training requirements will not achieve their goals unless the rules are actively enforced. After a 90-day grace period ends, the authorities will need to conduct regular inspections to ensure that all of Abu Dhabi's real estate professionals have licences. This will be a major task.

Other parts of the law also require enforcement. A prime example is the rule banning developers from collecting registration fees from investors. Investors previously had to pay a customary 2 per cent registration fee applicable on resales, which quickly adds up to be a considerable sum of money. The new law will restrict developers to only charging approved administrative fees.

Real estate is a critical and fast-growing industry in the capital, and many analysts are predicting it will continue to thrive. That is most likely to happen if the regulations ensure the sector is fair, professional, transparent and are seen to be enforced.