{"id":340,"date":"2022-08-16T09:50:00","date_gmt":"2022-08-16T09:50:00","guid":{"rendered":"https:\/\/www.ascentbusiness.com\/blog\/?p=340"},"modified":"2023-05-11T07:01:46","modified_gmt":"2023-05-11T07:01:46","slug":"5-essentials-to-meet-real-estate-regulatory-compliance-in-gcc-countries","status":"publish","type":"post","link":"https:\/\/www.ascentbusiness.com\/blog\/5-essentials-to-meet-real-estate-regulatory-compliance-in-gcc-countries\/","title":{"rendered":"5 Essentials to Meet Real-Estate Regulatory Compliance In GCC countries"},"content":{"rendered":"\n

The realty sector in the GCC (Gulf Cooperation Council) countries, comprises Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman. These are poised for rapid growth given the booming global banking and financial industry.<\/mark> Thus, Real-Estate Regulatory Compliance is extremely essential. <\/p>\n\n\n\n

Moody’s analysis reveals that retail banks in the Kingdom have linked 33% of their loans to construction and real estate. And there is evidence that property investments spark keen interest in foreigners too.<\/p>\n\n\n\n

It is therefore essential for any buyer to understand the Real-Estate Regulatory Compliance before venturing into investments in real estate. 5 fundamentals for banks as well as real estate investors to keep in mind before making decisions on investments.<\/p>\n\n\n\n

Law of the Land<\/strong>
Realty investment fund managers in the GCC countries need to be aware of the property ownership regulations in the region. The GCC banking system is not a single block but a host of different structures. Unfortunately, there is no oversight of federal regulations. Each GCC nation has to abide by compliance, whether it be a property owner or a bank. These include Regulatory Agencies like RERA, SAMA, AERA, the Ministry of Municipality, and the regulatory arm of the Land Department. These agencies monitor every aspect of compliance and Operational Automation related to realty in the countries.<\/p>\n\n\n\n

The Department of Economic Development monitors real estate facilities. They ensure that they comply with the laws of the land. The Commercial Compliance & Consumer Protection (CCCP) inspects the properties licensed by the Real Estate Regulatory Agency. In Dubai, the Dubai Land Department and the Department of Economic Development is the monitoring authority. Similarly, which has the data and information and also levies penalties in case of violations.<\/p>\n\n\n\n

A Strong Case for Technology<\/strong>
As the GCC countries are attractive propositions for property owners across the world, they make a prospective case for the adoption of fintech. Innovations in banking and process automation are aimed at easing payments, digital wealth management, and enhancing market access. By adopting technologies like Artificial Intelligence, banks can ensure that customers adhere to compliance and regulatory norms. <\/p>\n\n\n\n

Several UAE banks have adopted digital and mobile banking very recently. However, this might be the beginning of more investment in new technologies. The Realty sector holds the promise of collaboration between financial institutions, technology companies, and the real estate industry.<\/p>\n\n\n\n

Escrow Account Management<\/strong>
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Regulators in GCC countries allow some banks to provide an escrow account that offers services such as account opening, balance management, cheque collections, periodic cash-flow reporting, and comprehensive guidance on completing Land Department formalities. Automation of escrow accounts helps meet Real Estate regulatory requirements.<\/p>\n\n\n\n

Ascent ProMart Escrow Account Management software<\/strong> is successfully implemented with more than half a dozen banks in the GCC countries, enabling them to grow their real estate\/escrow business. While meeting RERA rules and guidelines, ProMart facilitates the bank Escrow Account Management services and simplifies the project registration process, escrow accounts opening at the developer level, retention account, as well as sub-account opening at the investor level.<\/p>\n\n\n\n

It allows the bank to validate all required documents (about RERA or the Bank) before the opening of the escrow account and linked to a specific project via a dual authority (maker-checker concept). Moreover, it handles different types of controlled disbursements (Construction Payments, Project Management Payments, Broker\/Marketing payments), according to rules set by RERA.<\/p>\n\n\n\n

Credit History<\/strong>
One of the most critical determinants of eligibility for property owners is credit history. The credit bureaus keep track of transactions of every client in the banking space, including on-time payments. Therefore, the best way to be compliant is to schedule auto deductions from bank accounts. This automated service helps prompt payment and avoids unnecessary compliance risks.<\/p>\n\n\n\n

Foreign Land Ownership<\/strong>
In UAE foreign land ownership is allowed. However, each Emirate country has its laws to regulate ownership. In Dubai, only UAE nationals, GCC nationals, and companies fully owned by these can own property. As a result, a company incorporated in the UAE or GCC but has a foreign shareholder is not considered a UAE or GCC national to own property in Dubai.<\/p>\n\n\n\n

In Saudi Arabia, the Foreign Ownership of Real Estate Regulation regulates the acquisition by foreign, non-GCC nationals, of real estate. For a foreigner to own property he needs to have normal legal residency status and permission from the Ministry of Interiors.<\/p>\n\n\n\n

Investing in real estate can be profitable, but it is essential to facilitate and monitor investments through banks via escrow accounts. However, the realty sector is risk-prone and can fall prey to fraud causing irreparable damage to investors and even banks, who lend to their clients, enabling investments. Software like Ascent\u2019s ProMart facilitates Real-Estate Regulatory Compliance.<\/p>\n\n\n\n

References<\/strong><\/p>\n\n\n\n