RECENT REGULATIONS IMPACTING REAL ESTATE DEVELOPMENT IN RAS AL KHAIMAH – A COMPREHENSIVE GUIDE
09 October 2023
Zina Majouri
Ras Al Khaimah's Ruler issued Decree No. 12 of 2023 on August 21, 2023, introducing in new regulations governing the Real Estate Development sector in the Emirate of Ras Al Khaimah (RAK), commonly referred to as the “New Law”
Dubai: The Ruler of Ras Al Khaimah issued Decree No. 12 of 2023, on August 21, 2023 which regulates the Real Estate Development sector in Ras Al Khaimah. This decree likely contains details about changes and updates to real estate laws in RAK.
I. Law Application - Article 2
The New Law defines the rights and responsibilities of master developers, sub-developers, and property buyers involved in real estate development projects. In accordance with Article 2 it holds relevance for:(a) All real estate developers seeking to operate within Ras Al Khaimah.
(b) All properties situated in RAK Emirate, inclusive properties in the economic zones.
II. New Law - significant clauses
Committee Formation (Article 3)The new law establishes the “Committee for the Development of Real Estate Projects” under Article 3, granting it well-defined roles and authoritative powers. This committee plays a pivotal role in overseeing and regulating real estate projects, ensuring they adhere to the law's provisions.
RERA's Role
The Real Estate Regulatory Administration (RERA) within the Ras Al Khaimah Municipality Department has its responsibilities and authority meticulously outlined in the law. RERA is entrusted with the critical task of implementing and enforcing the law's provisions under Article 4, thereby safeguarding the interests of both property buyers and developers.
Enhanced Authority
Under Article 4 of the new law, the Director-General of the Ras Al Khaimah Municipality Department assumes expanded powers and influence. These enhanced authorities empower the Director-General to enforce compliance with the law, thereby strengthening regulatory oversight.
Developer Registration (Article 5)
A pivotal development introduced by the new law is the establishment of a 'Real Estate Developer Register' (Developer Register) at RERA under Article 5. Developers must register with this entity to operate in Ras Al Khaimah. This measure enhances transparency and ensures that developers are held accountable for their actions.
Project Registration
To streamline the real estate sector, the law introduces a 'Real Estate Development Projects Register' (Projects Register) under Article 9, outlining prerequisites for project registration and conditions for removal, ensuring that projects are meticulously documented and monitored.
Permit Requirement
Developers must secure a permit from RERA to be eligible for a developer license under Article 12. This requirement not only adds a layer of control but also ensures that developers meet specific criteria before engaging in real estate activities.
Off-Plan Sales
The new law provides developers with a comprehensive framework for executing off-plan sales of units under Article 27. It delineates their rights and obligations in these transactions, fostering confidence and clarity in off-plan property sales.
Transaction Registration
The law mandates the compulsory registration of all transactions linked to development units in the Initial Register under Article 31. This provision ensures that all property transactions are documented, creating a transparent and secure environment for buyers and developers.
Escrow Account Trustee Register
An 'Escrow Account Trustee Register' (Trustee Register) is established under the law under Article 36, complete with conditions for registration and a precise delineation of account trustees' responsibilities. This register enhances transparency and accountability in financial transactions related to real estate.
Escrow Account Rules
The law provides specific criteria governing the initiation and utilization of an Escrow account under Article 38, ensuring that funds related to property transactions are managed in a secure and accountable manner.
Off-Plan Project Booking
The law regulates rules concerning unit bookings in off-plan projects under Article 28 and grants purchasers entitlement to access information about these projects. This provision empowers property buyers with critical information when making investment decisions.
Sale Agreement Termination
Provisions are made in the law for the termination of sale agreements in cases of purchaser default under Article 50. Furthermore, it addresses developer liability for construction defects. The law also grants authority to the Projects Committee for stalled projects under Article 54, safeguarding the interests of both parties.
Fines and Fees
The law introduces a schedule outlining fines and fees under Article 55, ensuring that violations are met with appropriate penalties. Methods for the collection of unpaid fines and fees are also detailed, promoting compliance with the law.
Dispute Resolution
The law elaborates on procedures for pursuing judicial recourse, arbitration, or mediation concerning provisions within the New Law under Article 60. These mechanisms provide buyers and developers with clear pathways for resolving disputes, promoting fairness and expediency.
III. New Law Application Effective Date
The New Law will come into effect sixty (60) days from its publication in the official gazette, which is slated for October 20, 2023.
In Conclusion
RAK Legislative Committee gives access to legislation documents, including those related to real estate. The Land and Properties Sector in RAK Municipality deals with documentations, registration, disposition, and handling of properties. The application of Real Estate Laws in the UAE, including RAK, typically apply to lands and real property leased out, including off-plan properties. It's essential to consult specific legal documents for precise details.
Ras Al Khaimah's new Real Estate Development Law signifies a significant leap forward in regulating the real estate sector. With provisions that ensure transparency, accountability, and fairness, this law empowers both property buyers and developers. Developers must adhere to stringent regulations, while buyers gain access to vital information and mechanisms for dispute resolution. As Ras Al Khaimah continues to grow and evolve, this comprehensive legislation sets the stage for a thriving, secure, and trustworthy real estate market.
ALKETBI TOUCH:
ALKETBI team frequently extends its legal expertise and advice in real estate matters from an investment, development, construction, and structuring and exit angles. Should you seek a deeper understanding of the new decree and its implications for you, please reach out to our dedicated teamLatest News
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