Saturday, July 12, 2008

Property residence visas

Just to go back to the subject I've posted about a couple of times in the last few days, property-linked residence visas.

To recap, Emaar, and I assume the other Master Developers, have stopped sponsoring owners as they are 'discussing changes in the process' with Immigration. Scroll down to see my previous posts with the details.

When freehold property was opened up to foreigners the promise was that Master Developers would sponsor their residence visa, if required, subject to the normal Immigration Department requirements being met.

I've posted earlier about the effects that not delivering on promises has on business confidence, the damage that such reneging on promises will have on Dubai's future, but there's also the other side to the story. That of the people who've bought property on the basis of that promise.

Not everyone who buys property needs a residence visa. Some bought simply as an investment, live overseas and lease their property. The tenant has a residence visa and arranges DEWA/Etisalat.

Many other buyers are on an employer's sponsorship for their residence visa.

But there are other buyers who do need the property-linked visa that was promised and which has been delivered over the last three years or so. Some of those visas are now coming up for renewal.

These buyers include retired people, who've moved their home to Dubai. It includes people from war-torn areas who are looking for a safe haven. These people don't need a job and an employer who will be their sponsor, they're bringing money into Dubai. They need the residence visa which was offered in return for investing in Dubai property.

Then there are the people who bought a holiday home to visit a few times a year. They don't need a residence visa to live here, but they do need one to get DEWA and Etisalat services installed in their property.

There are also many people who've lived here for decades, who've contributed to the growth and are coming up to retirement. Some would like to stay on because this has become their home. But when they retire they'll lose the employee's sponsorship. Without the property-linked residence visa they'll simply have to leave, to go 'back' to a country that's become increasingly foreign to them.

If the changes that have been proposed go ahead it's a lose-lose situation.

There's one more interesting point I should add.

The proposal to remove the promise was made by RERA and announced by its CEO Mr Marwan bin Galita.

On June 23 this was reported:

"We have submitted the proposals ... to the higher government authority in Dubai to review the visas for property buyers...There is no direct link between property ownership and residence visas."

His comments reverse the government's earlier stand. "

Now look at this May 5 report:

"Four property companies are being investigated by Dubai’s real estate watchdog over what appears to be the non-delivery of projects...RERA CEO Marwan bin Ghalita said four firms were currently being subjected to an "internal audit of transactions”...

“We cannot let people promise and not deliver in Dubai”, the newspaper quoted bin Ghalita as saying.

"We cannot let people promise and not deliver in Dubai." But that's exactly what they've now proposed the government does.

Those completely conflicting RERA stands are reported here and here.


moryarti said...

RERA is confused... to say the least

Alexander said...

My 2p worth...

Consistency is the last thing for people to expect. Where there is no right in law and the relationship between the 'owner' and the 'developer' in law is actually that between a 'tenant' and a 'landlord', you can hardly expect any promise or undertaking to hold water over a long period of time.

Consistency. If it matters to you, invest where your rights are recognised by the law, surely!!!

Seabee said...

Alexander I agree about the risk taken by buying pre-laws, that was obviously a calculated risk by buyers.

But the residence visa was a fundamental part of the freehold offer which was promised by government, and only recently reconfirmed by government. Surely people should be able to take the government at its word.

Anonymous said...

Dear Sir Madam

I must say that Dubai has no cosistancy, nor do the realestate agents tell the truth, I have a friend that just bought a studio appartment, and asked the agent if a visa would be granted, and off coarse the answer was yes, well well surprise, when on going to the ministry they said no you have to have a property worth 1,000,000, this is an absoulute disgrace, not even a visit visa, so what now just chuck the appartment away, what is wrong with investing in this country, they are not asking for hand outs, just only to be able to have a home in a secure enviroment, this is the limit and sums up how Dubai cannot get its act together and be truthfull or helpfull, what is the next step i wonder.

Shame on the agent and on Dubai

Seabee said...

Anon@3.58, I have to agree with you. I've been posting my complaints about the whole property visa issue since the changes were announced.