On 21 August 2023, the Ruler of Ras Al Khaimah issued Decree No. 12 of 2023, regulating the Real Estate Development sector in Ras Al Khaimah (the “New Law”).
Scope of application
The New Law specifies the rights and obligations of master developers, sub-developers and purchasers of real estate development projects and applies to:
(a) all real estate developers that wish to conduct their development business in Ras Al Khaimah; and
(b) all properties which are located in the Emirate of Ras Al Khaimah, including any economic zones.
Key provisions of the New Law
- Establishment of Committee: Creation of the ‘Committee for the Development of Real Estate Projects’ with defined responsibilities and authority.
- RERA’s Scope: Specification of the responsibilities and authority of the Real Estate Regulatory Administration (RERA) within the Ras Al Khaimah Municipality Department.
- Expanded Authority: Expansion of the powers held by the Director-General of the Ras Al Khaimah Municipality Department.
- Developer Registration: Introduction of a ‘Real Estate Developer Register’ (Developer Register) at RERA, making it mandatory for real estate developers to register to operate in Ras Al Khaimah.
- Project Registration: Establishment of a ‘Real Estate Development Projects Register’ (Projects Register) at RERA, outlining the prerequisites for registering development projects and the conditions for their removal.
- Permit Requirement: Requirement to obtain a permit from RERA for eligibility to acquire a developer license.
- Off-Plan Sales: Explanation of conditions and procedures for developers to conduct off-plan sales of units, including the rights and obligations of developers in these transactions.
- Transaction Registration: Mandate to register all transactions related to development units in the Initial Register.
- Escrow Account Trustee Register: Establishment of an ‘Escrow Account Trustee Register’ (Trustee Register) with conditions for registration and defining the responsibilities of account trustees.
- Escrow Account Rules: Specification of conditions for opening and utilizing an Escrow account.
- Off-Plan Project Booking: Regulation of rules concerning booking units in off-plan projects and purchasers’ rights to access information about such projects.
- Sale Agreement Termination: Provision for the termination of sale agreements in case of purchaser default, addressing developer liability for construction defects, and granting authority to the Projects Committee for stalled projects.
- Fines and Fees: Creation of a schedule for fines and fees under the New Law, along with methods for collecting unpaid fines and fees.
- Dispute Resolution: Explanation of the procedures for seeking judicial recourse, arbitration, or mediation in relation to provisions within the New Law.
Effectiveness
The New Law is effective 60 days from the date of its publication in the official gazette which is 20 October 2023.
How can Al Tamimi help?
If you would like to know more about the new decree and its implications for you, please contact our team.
Key Contacts
Andrew Thomson
Partner, Head of Real Estate