What are the consequences of non-compliance with RERA regulations?

In the United Arab Emirates the Real Estate Regulatory Authority (RERA) in Dubai has a crucial task in regulation of the market. They aim at promoting the fair, efficient and transparent process of the real estate transactions. Any violation of the RERA rules and regulations is reserved and fatal for any real estate agent persona or a firm. Here’s an overview of these consequences:Here’s an overview of these consequences:

Financial Penalties

There are severe fines which one incurs if he or she does not adhere to the rules set by RERA. Such fines may be of different amounts based on the degree of violation committed by the offenders. Some of the typical violations are the non-ordination of the properties with the Ejari system, violation of advertising regulations, and improper handling of the escrow accounts. Fines and sanctions are there to ensure that no one engages in activities that are prohibited by the laid down rules and regulations.

License Suspension or Revocation

Failure to comply with any of the provision of RERA entails the suspension or cancellation of a license from real estate business either from the professional or the company. This is a big consequence since it denies the entity the legal right to engage in real estate business in Dubai. License suspension is a form of punishment as a way of caution while revocation is a harsh form of punishment usually for a serious or recurrent offense.

Laure & Dispute Management

Non-compliance may result in penalties that may bring legal actions against the participants in breach of the directive. RERA has laid down processes for wait for dispute resolution in form of mediation, arbitration or legal action. These procedures assist in the following mechanisms in containing and managing conflict between the buyer, sellers, and developers. Legal actions are not only expensive and time consuming but this underlines why compliance should be a priority.

Reputational Damage

Reputation of one’s business plays a very important role in business specifically in real estate. Failure to adhere to the set RERA regulations attracts severe reputational loss. The media can easily publish information about the regulatory breaches and hence mobilize the entire client and investor base. It can result in failure to sell its products and services which causes the company to lose its consumers effectively ruining its reputation in the market.

Operational Disruptions

Breaches of RERA regulations interferes with business operations. For instance, suspension of license entails that the company is barred from participating in real estate activities until the breach’s compliance is regained. This could eventually result in construction delays, financial losses, as well as, issues in contracts and agreements​.

These RERA regulations should be and have to be followed to the letter with regard to the sustainability and continued feasibility of the real estate operations in Dubai in particular. Failure not only means that a company receives fines, legal problems and may face multimillion dollar losses due to reputation damage, but it also has a potential for operational disruptions easily measuring in millions of dollars. The RERA has been implemented in order to protect the buyers from unreliable real estate professionals and companies and thus all the professionals and companies in the real estate field have to be precise with the guidelines stated by RERA and have to follow them in order to avoid these negative outcomes.


Quiz: Consequences of Non-Compliance with RERA Regulations

Test your knowledge based on 95dubai.com

1. What is one of the financial consequences of non-compliance with RERA regulations?



2. What can repeated breaches of RERA regulations lead to?



3. What type of action can non-compliance lead to?



4. How can non-compliance affect a company’s reputation?



5. What operational consequence can non-compliance lead to?