Real Estate Regulatory Agency

Real Estate Regulatory Agency

Real estate ownership is governed by and falls under the jurisdiction of the federal legislature pursuant to Article 122 of the Constitution. However, different local policies apply in each emirate. There is no specific federal property law in the United Arab Emirates. Instead, each emirate has established its own specific land ownership policies through local laws.

The Dubai Land Department, the organization that oversees the emirate's booming property sector, is undergoing a major restructuring process. The government established a new regulatory body affiliated to the department called the Real Estate Regulatory Agency.

The agency will oversee key regulations governing the property sector, including recent laws on real estate brokers, trust accounts and upcoming rules on the responsibilities of home owners' associations.

A separate agency will also be formed to deal exclusively with the ongoing registration of freehold title deeds.


The agency's mandate will be to license, regulate and oversee the operations of property developers, property management companies, financing institutions, brokers and owners' associations.

The agency will mainly oversee the escrow accounts which were introduced by Law 8/2007 to safeguard buyers' payments in special accounts. The central aim of this law is to protect purchasers who contract to buy property from developers 'off-plan' (ie, before the property has been constructed). The main mechanism for achieving this is the introduction of mandatory escrow accounts into which purchasers' money is deposited and from which, until completion of the development, only approved expenses can be met.


The law has introduced the following policies:

  • It applies to any developer receiving off-plan payments for incomplete property;

  • A special register will be created to register the developers licensed to carry on property development in the emirate. No developer may carry on such business unless registered;

  • A developer's registration may be cancelled in the case of:

    • bankruptcy;

    • failure to commence construction within six months of receiving approval to sell off-plan;

    • cancellation of licence; or

    • violation of the law or any other laws or policies regulating real estate development activity;

  • A developer may not advertise in local or foreign media, or participate in local or foreign exhibitions, for the promotion of sale of units or properties (whether planned or under construction) until it has obtained a written permit from the agency;

  • Developers launching new residential or commercial multi-storey buildings and compounds will have to apply to the agency to open an escrow account which will hold:

    • all monies received from purchasers or their financiers;

    • all monies advanced by a bank or financial institution financing the project on behalf of the developer; and

    • the developer's own capital contribution;

  • Banks and other financial institutions with which escrow accounts will be held are required to register with the agency as authorized 'account trustees', provided such institutions fulfil the agency's criteria;

  • An escrow account must be opened in the name of each real estate development, thus preventing the developer from allocating funds in the account to another project or development;

  • In the event that a project is abandoned by the developer, the funds must be refunded by the bank to the depositors after consultation with the agency; and

  • Terms of imprisonment and/or fines starting at AED100,000 apply for offences and infringements of the law.


The new law sets out the regulatory framework for real estate development and other related activities. The law will contribute greatly to maintaining and building investor confidence, especially among expatriate buyers, and is expected to boost the market further. This is a positive development since it will be another sign of growing confidence and maturity in the market and a key element in the emirate's emergence as a mature and prosperous economy.

For further information on this topic please contact Tony Maalouli at ProConsult Advocates & Legal Consultants by telephone (+971 50 625 8284) or by fax (+971 4 329 8733) or by e-mail ([email protected]).