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Dubai Brokers Cannot Sign Leases for Overseas Landlords

Dubai brokers in real estate are no longer able to sign lease documents on behalf of overseas landlords using a power of attorney (POA).

According to a Dubai Land Department (DLD) executive, Dubai brokers legally appointed to manage property of landlords based abroad are no longer allowed to sign unified lease contracts to get an Ejari.

The DLD now says that the property owner must directly sign the original lease contract. Brokers with POAs must now send the unified lease contract via courier to owners who cannot come to Dubai to sign new POAs.

Sanjay Chimnani, managing director of Raine & Horne Dubai, confirmed: ‘The aim is that it would be conflict of interest in many cases if the agent signs the contract on behalf of the landlord – till the landlord feels comfortable with the arrangement and the agency’s internal rules allow for their agents to receive a POA. This rule has now been changed and does not allow an agent even if he holds a POA to sign a rental contract.’

Property management companies will still be able to sign contracts on behalf of clients, though they will need specific authorisation.

Chief sales officer of Kensington Exclusive Properties, Mario Volpi, confirmed: ‘We now involve lawyers to act as the clients’ power of attorney. Previously, brokers were happy to offer this service to their overseas clients free of charge, but this new service is no longer free as lawyers charge for acting on behalf of clients.’

He continued: ‘The move is aimed at making the system more transparent and has helped to secure clients’ finances through a more secure method of operating.’

The unified lease contract for rental properties in Dubai was launched in March by the DLD in order to create a transparent and professional real estate market with measurable standards.

The new system has been put in place to protect all parties in the lease process and the revisions are seen as an example of best practice.

Following the recently reported introduction of the ‘Dubai Blockchain Strategy’ linking all real estate registrations, it is expected that some form of electronic docusign system could be introduced.

Jason Hayes, founder and CEO of Luxury Property, commented: ‘There will follow some form of secure online system where unified lease contracts could be electronically signed by property owners abroad.’

In the meantime, overseas property investors must bear in mind that Dubai brokers can no longer sign leases on their behalf.

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