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Move to regulate random real estate offices lauded

JEDDAH: A former senior official at Jeddah Chamber of Commerce and Industry has lauded the efforts of the Makkah governorate and the chamber to regulate the real estate sector.

Abdullah Al-Ahmari, former chairman of the real estate committee at the chamber, said there are more than 3,000 unregulated real estate offices in Jeddah and its surrounding areas.

"These offices are working illegally and are involved in most land transactions without possessing original title deeds," he said, attributing this mainly to the absence of any rules to classify and regulate these offices.

Speaking to Al-Eqtisadiah business daily, Al-Ahmari lauded the Makkah governorate for its initiative to expand the role of district chiefs and licensed real estate offices in regulating the real estate market. The governorate has decided to take advantage of the Shumus electronic security system to track down those engaged in illegal real estate activities.

"The system would serve the interests of both the licensed real estate offices and their beneficiaries," he said.

Al-Ahmari praised the real estate committee for its efforts to regulate this vital sector. "The committee has formed a working team to follow up cases of unregulated real estate offices in Jeddah and its surrounding areas. It is now making a count of the offices operating without a proper license and examining what types of activities they are involved in," he said.

Al-Ahmari underlined the need for working out a joint mechanism in coordination with the Ministry of Commerce and Industry, various municipalities and chambers of commerce and industry and security forces to crack down on unregulated real estate offices. These offices adopt all possible ways and reckless practices to earn a huge profit without giving any consideration to the interests of their clients, he said.

Al-Ahmari noted the chamber committee had earlier sent a formal letter to the ministry asking it to supply information with regard to real estate offices that have secured a commercial registration from the ministry as well as persons who have a license to operate real estate offices. The move was part of the committee's efforts to regulate the market, he said.

"I appreciate the efforts being made by the current committee. The working team is now doing a much appreciable job of closely following up the activities of these offices," he said.

Referring to the illegal activities being carried out by several real estate offices, Al-Ahmari said some of them are found engaged in activities without proper license. "Some of these offices undertake even contracting work in addition. They are doing these activities in clear violation of the real estate laws prevailing in the country," he said.

The official drew attention to the rules and regulations that are binding to real estate offices in the Kingdom. As per the regulations, these offices must have secured a commercial registration from the ministry. There should also be a safe to store the documents and records of real estate owners, and these owners should be given receipts for such documents. These documents should be returned to the owners in case of any failure when processing real estate transactions.

Al-Ahmari blamed unregulated real estate offices for marketing properties without original title deeds among several citizens. "These offices resort to illegal and unethical practices with an eye on earning huge profits in real estate transactions. They are also responsible for many land encroachments," he said adding that the intervention and close supervision of Makkah Gov. Prince Khaled Al-Faisal have dealt a severe blow to land grabbers in the region.

Al-Ahmari noted the chamber committee called on the Jeddah municipality and the ministry to work together and not give licenses to real estate offices that do not have a commercial registration.

"The committee demanded the ministry to furnish various chambers of commerce and industry with copies of commercial registrations given to licensed real estate offices across the Kingdom. We also sought clarifications with regard to the classification of each licensed real estate office," he said, noting this would facilitate a crack down on illegal offices, not only in the Jeddah and Makkah regions, but all other regions in the Kingdom especially Riyadh, where such offices pose a big headache even to leading real estate companies. There are several unregulated real estate offices in Riyadh that are operating without proper license, commercial registration and even offices or contact centers.

Referring to the illegal real estate offices in Jeddah, Al-Ahmari noted most of these offices are operating on the outskirts of the city or at unlicensed real estate buildings or in uninhabited areas. "On the other hand, licensed real estate offices operate at facilities authorized by the municipality," he pointed out.

Al-Ahmari said unregulated real estate offices contribute to an exorbitant increase in real estate prices and steep hike in the rent of apartments. They also undertake real estate transactions without proper documents and original title deeds.

"These offices produce an overall negative impact on the real estate sector. They triggered speculative trade in the real estate market that is harmful to the interests of both realtors and tenants as well," he said.

© Arab News 2012