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Mismanagement in freehold properties’ sales concerns foreign buyers

DUBAI - Lack of proper management in sales and marketing of freehold properties in the UAE is said to keep off potential buyers from abroad.

According to Jean-Paul Tarud-Kuborn, marketing manager of Amlaki real estate software company, some 60 per cent of investors into UAE’s freehold properties are foreigners from Europe, Far East, Middle East and the Indian subcontinent. However, due to what he calls “mismanagement” in sales and marketing of such properties this number is not growing and even those, who have already paid for them, have problems.

He said since the sales and marketing of freehold properties are not properly managed by the developers due to lack of experience in building properties for sale, there are risks in proper delivery of high rise towers and other properties to the buyers.

“Sales are done before the property is built and there are risks of promises being fulfilled with no legal procedures against such cases,” he added. Some overseas investors are concerned about fluctuating prices for freehold properties in the country, while others are about the privacy issues. There are cases when the same property is sold to two or more different investors, he said.

“For instance, some foreign investors agree on the price for the property over the phone, but when they arrive in the country the next day they find that the cost has already gone up. Or, some companies allow resales and their agents sale whatever has been already sold since there are no proper records in sales and they do not keep track of all payments and buyers. Sometimes privacy is not kept and the name and other details of the buyer are given away, because they do not know how to manage it and do not have a for that,” he explained.

Professional developers should start using proper technologies to organise their sales, marketing, contracts and the whole cycle involved in property development and there should be a proper real estate regulation in the country that matches the market realities, he suggested.

According to some legal advisors in the UAE, legal consultants in the country “have a handful of cases filed by foreign investors, who are not satisfied with the properties they paid for and say that their expectations were not met by the developers.”

But due to lack of transparency in the freehold market and absence of a legal framework, the number of court cases filed by foreign investors is not known, while the Federal Law on land and real estate and consequently the legal structure for investors’ visa status have yet to come.

“Legally speaking, those who bought freehold properties in Dubai actually do not own them,” they said.