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RERA to start the implementation of the governance charter by training real estate companies
(18 January 2012)

 

The Real Estate Regulatory Authority (RERA), the regulatory arm of Dubai Land Department (LD) to start training programs for real estate development companies on the Governance Charter on 25th of January 2012. This aims at achieving a quantum leap in the performance of developers and increase transparency in markets’ performance, enhance foreign investment, confidence and efficiency of real estate companies through the application of the charter. The charter is based on openness toward the companies’ activities in the market and clarity regarding the progress of the projects’ implementation and companies’ financial solvency and ability to manage quality and risks.

Engineer Marwan bin Ghalaita, CEO of RERA said: “The absence of a culture of governance in the market in general and in the real estate market particularly motivated the Dubai Land Department (LD) to apply the charter on three stages. The first one is experimental, educational and optional. The second stage focuses on training and coordination, while the third stage is for the execution of the charter and it is mandatory.

RERA CEO said the first stage aims at educating the market and property companies operating in this market through professional courses provided by Dubai Real Estate Institute (DREI), the educational arm of the LD. The first training courses already started in December by training the staff of Dubai Properties Group (DPG) on this charter.

Bin Ghalaita called on real estate development companies to get involved in the process and to register for these courses to help them to get a clear understanding of the ever changing corporate governance and its practices in the real estate sector.

The second phase will be conducted all over 2012 and the training program will be executed during the whole year in order to give companies operating in the market and registered with the LD enough time to adjust to the new rules and to meet the standards and requirements of the charter and in accordance to the charter’s text, articles, and execution mechanisms.

In the third phase which starts on January 2013, the real estate companies will be obligated to apply the charter.

Mahmoud Al Burai, Managing Director of Dubai Real Estate Institute expressed his confidence on the fruitful application of the best practices of corporate governance at the corporate and real estate projects levels in promoting confidence in our market. He added that we understand that there is a space for maturity and professionalism in the market and we realize the importance of implementing the Charter of Corporate Governance. According to him, the training session will be conducted in two days and will be available for executives, auditors and financial staff.

MD of DREI added that the training sessions will give details of the governance code launched by LD last October. The charter mainly focuses on seven criteria, on which the corporate governance charter is based on. These are:

1- The existence of a board of directors in the companies tasked with running the company.

2- Companies must have quarterly audited financial reports to clarify the financial position at a specified date and to provide financial information about the company.

3- Best practices for transparency in announcing the company’s activities, size of its projects and contracts.

4- Company’s commitment to the Charter of the ethics of the real estate development profession.

5- Company’s ability to manage, measure and evaluate risks and develop management strategies in this regard.

6- Company’s ability to manage the quality and commit to management approach to recognize and meet the needs of the investor.

7- Company’s requirement to allow DLD to audit its accounts and conduct technical auditing.

 

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