Want to become a Real Estate Developer in Dubai? Read This Blog!
Over the past ten years, the UAE has seen an exponential increase in the development of building and infrastructure projects. For residential, business, and recreational interests, new communities have sprang up all across the UAE. Despite the fact that certain projects' construction was halted or abandoned due to the global financial crisis, recent announcements of further "mega" projects in Dubai and ongoing development in other Emirates demonstrate a definite recovery of the real estate industry in the UAE as a whole. Developers are generally in favor of starting construction again, pushing ahead with the completion of stalled projects, and creating new ones.
Thus in today’s Blog, Dhanguard will extensively discuss how you can become a Real Estate Developer in Dubai. So without any further ado, let’s learn!
Getting Registered as a Developer for Projects in the Emirate of Dubai
Real Estate Regulatory Agency is in charge of regulating developer registration in the Emirate of Dubai (RERA).
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Through numerous RERA rules, regulations, and policies, the registration requirements have changed throughout the last few years.
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Only businesses registered with the Dubai Department of Economic Development (Dubai DED) and those whose trade licenses specifically list real estate development operations are now permitted to engage in development activities under RERA
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Such Dubai DED enterprises must be completely held by UAE nationals or be owned by entities controlled by them.
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The current registration charge to create a Dubai DED is AED 37,000 + 5% of the Dubai DED's office lease rent. Of this sum, AED 25,000 is given to RERA by Dubai DED as the developer registration fee.
What are the Documents required to become a Real Estate Developer in Dubai?
To apply for a developer registration certificate with RERA, you must provide the following paperwork:
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Project application form and developer registration
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Dubai DED copy of a trading license
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Document from Dubai Land Department confirming units' registration (DLD)
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The project sales and marketing plan has received a No Objection Certificate (NOC) from the master developer.
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Development-related land's title deed
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If units are sold before the project's 20 percent construction is finished, an unconditional performance guarantee from a UAE bank for 20 percent of the project's construction expenditures will be given to RERA.
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Letter from the project consultant saying: Name of the principal contractor, Project name, Project value, Start and End dates
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Payment schedule based on project construction milestones Financial report (RT01)
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Project schedules for each floor
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Certificate of membership in the Dubai Chamber of Commerce & Industry
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The final building permit
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Numbers for the project manager
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The land subject to development must be fully paid for and have a title deed issued in the name of the owner, as is evident from the aforementioned conditions.
Read More: Read about the 7 Most Lucrative Free Zones in the UAE
In cases when the landowner is unable to register as a developer, RERA enables the landowner to enter into a property development agreement with an already-registered developer to carry out the project on the landowner's behalf. To ratify such a deal and have it acknowledged by RERA, the property development contract must, nevertheless, receive the senior legal adviser's approval from DLD.
Developer seeking to sell Unfinished Homes
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A developer must be a registered developer with RERA (as noted above) and submit an application to RERA to form an escrow account in order to sell units off plan in accordance with Law No. 8 of 2007 ("Escrow Law").
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The developer is responsible for making sure that all escrow funds are paid into the escrow account and utilized strictly for the project's construction.
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This includes any revenues from the sale of units that were sold off-plan. If the Escrow Law is broken, there is a possibility of a fine of AED 100,000 or criminal penalties that could result in a prison sentence (Article 16 Escrow Law).
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Once the developer has provided RERA with all necessary paperwork and has been given permission to sell apartments off-plan, RERA will issue a NOC allowing the developer to open an escrow account with a recognised bank in the United Arab Emirates.
What Documents will be required to open an Escrow Account?
To open an escrow account, the following paperwork is necessary:
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Trade License and a title deed for the land that will be developed, both from the Dubai Chamber of Commerce and Industry.
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A copy of the contract signed by the master developer and the sub developer
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The master developer and the relevant authorities have authorized the architectural plans and layouts.
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A financial statement that details the project's earnings and costs and has been certified by a legal accountant
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An agreement between the sub-developer and the master developer to start project construction after receiving permission to sell off-plan, or an agreement between the master developer and the sub developer in the absence of a sub developer.
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An illustration of a deal between a buyer and a developer
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Along with the aforementioned requirements, Law No. 13 of 2008 Regulating the Interim Real Estate Register in the Emirate of Dubai as Amended ("Pre registration Law"), Article 3 states that no sale of any off-plan property shall be valid if it is not recorded on the Interim Real Estate Register, also known as the "Oqood" system.
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AED 10,000 in fines could be imposed on the developer for failure to register a contract. A developer may not start selling off-plan units until they have possession of the land to be developed and have received the necessary approvals from the relevant authorities, according to Article 4 of the Pre registration Law.
Conclusion
It takes drive, technical proficiency, and real estate know-how to learn how to become a real estate developer. The foundation you need to thrive has already begun to be built, though, if you have a few years of real estate expertise under your belt. A real estate investing programme might be the perfect tool for you if you are just starting out in your profession. Thus we hope this blog provided you with insightful information. For more information on other related aspects, feel free to visit our Branch Office or our website as well.
