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MAKING BABY STEPS WITH KEY STAKEHOLDER MEETINGS
The responsibility for regulating the real estate sector in Abu Dhabi was handed to the Department of Municipal Affairs And Transport (DMAT) by law no 3 of 2015. That law came into force on 1 December 2016 and now all brokers, surveyors, developers, auctioneers, Owners’ Association managers and assessors have fallen under their remit. This has essentially become the equivalent of Dubai’s RERA.
Abu Dhabi is starved of foreign investment into its real estate sector. The overwhelming majority of developers are Abu Dhabi-based and the larger ones such as Aldar, TDIC and Aabar are government-backed. The remaining are largely made up of smaller Abu Dhabi-based developers with a few from Dubai and Sharjah. There are then a handful from the GCC region, and you can count on the fingers of one hand the developers from the rest of the world.
The Abu Dhabi government is looking to bring in more foreign real estate investment in the form of developers to diversify the market and also investors, and they see these regulations as paving the way. A well regulated market is a secure one and understandably when money is looking abroad it needs that security before investors will commit to a region.
The new law is heavily focused on the off-plan market. A large portion of it is dedicated to regulating off-plan sales and ensuring that the abuses which occurred in 2008, where funds were taken but nothing was built, are eliminated. DMAT quickly set about the process of registering developers and staging training courses for the various regulated functions.
We are now nearly a year and a half into the new law and progress has been “measured”. Developers are well on their way to being registered while progress with brokers and surveyors has been slower. The new law is also just 100 Articles with lots of implementing regulations still to be published.
The truly admirable thing about the DMAT however is its willingness to listen to the stakeholders. The department is largely made up of civil servants will little or no knowledge of the activities they are licensing, and with that comes the danger of them developing a framework based on their partial knowledge. To combat this, they are holding regular open forum Q&A sessions with various groups. They invite people to meet them and there is no presentation, no speaking from their side, they just listen to questions and concerns and answer them.
I cannot think of an example of such an open and collaborative approach from my own United Kingdom and I find it wonderfully refreshing. To meet and speak to the people who are making the decisions, understand their thinking and to try and help make this a success is a unique opportunity which no-one impacted by these regulations should miss out on. We are yet to see the end results but if it is a reflection of the process then I think it will be great.
Managing Partner, Crompton Partners
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