Property Investors Can Be Protected from Aftermath of Crisis- New Real Estate Laws

A new law is being worked upon by The Real Estate Regulatory Agency in Dubai which will give new rights to property investors. The law has not been revealed but according to a spokesperson, it is going to be comprehensive and seek to protect the investors.

‘Along with the Dubai Land Department we are studying a new law to protect the rights of real estate investors. Our ultimate goal is ensure justice and set up proper rules and regulations to regulate the relationship between developers and investors,’ the spokesman said. He also added that a draft will be ready to be sent to the Executive Office in order to get the approval by the first quarter of 2010.

The new law is expected to recollect the confidence among the investors of the Emirate followed by the exposure that the owners of developers Nakheel, Dubai World, has huge debts of $59 billion and is attempting to restructure some of it.

It is expected that the real estate industry will welcome more transparencies further.

According to Jason Manolopoulos, managing partner of boutique investment firm Dromeus Capital, the current crisis has raised concerns over corporate governance and transparency to a much higher level.

‘Investors should have been wary about the fundamentals of Nakheel. Everyone was fully aware of the overcapacity on Dubai real estate

I think 2009 will be remembered as the year when the idea that an implicit guarantee should be priced only slightly wider than an explicit guarantee was relegated to history,’ he explained.

‘Investors will have to differentiate, and the selling of companies on the basis of their connections and strategic importance will no longer work,’ he added.

‘It's clear there will be job cuts but it's too early to know the extent of it,’ Raj Madha, an analyst at regional investment bank EFG-Hermes said.