The RERA says that buyers should make sure that any seller of property meets three 'proofs'. First, the company must be registered with the RERA and can quote its registration number.
Secondly, that any payments to the company are made to its trust account only - which must be with one of the financial institutions approved by the RERA. And finally check that the property broker has legalized its activities by registering with the RERA and can produce an ID card.
This crackdown on the previous freedom accorded to Dubai developers follows the publication of this summer's new Law No 8 establishing compulsory escrow accounts for new developments.
At present developers only have to pay all monies raised on projects launched since the law was issued into a separate account controlled by the Dubai Land Department. But industry sources suggest that by the end of the year the escrow account law will be applied to all existing projects in the emirate.
Buyers of existing projects who are frustrated by project delays may take some comfort in this development. And certainly the buyers of new property at the Cityscape trade show in Dubai this week should feel more secure in the knowledge that the authorities will be ensuring that their money is used for the purpose for which it was intended.
But how many of the company's exhibiting their Dubai projects this week will be able to meet the tough, new three 'proofs'?
There has already been a notable slowdown in the launch of new real estate projects since Law No 8 was decreed. Developers, if nothing else, are naturally anxious to learn how this law will be applied in practice and are hesitant to create new projects without this information.
Other observers feel that the new law is part of a process designed to manage a soft landing for the Dubai real estate boom and to head off any possibility of a crash by consolidating existing activity into the better capitalised companies.
With oil prices at record levels and regional liquidity very high this is a wise approach as the market still affords the possibility of successfully managing a slowdown. Local inflation, for example, is at levels that could allow a real estate boom to be gently deflated without causing a great deal of damage to the real economy.
So far there is little evidence of the global credit crunch impacting on the Dubai property sector, although further down the line planned bond issues could be impacted, further slowing things down.
However, the RERA is clearly keen to show that it has teeth and means business, and the Dubai real estate sector is going to have to get used to more regulation than heretofore.
See also:Latest Cityscape newsMiddle East real estate: when will the boom end?Dubai property prices continue to riseSpecial Report: Buying Property in the UAE