It will help streamline and license developers, brokers, valuers and owners’ associations
RERA stands for Real Estate Regulatory Authority. RERA was formed with the official issuance of Royal decree 69/2017. It was built based on the vision of HRH Prince Salman Bin Hamad Bin Isa Al Khalifa, the Crown Prince of the Kingdom of Bahrain.
What is the purpose of RERA?
The main purpose of RERA is to align the real estate regulations and practices in the Kingdom of Bahrain with international real estate markets. Some of the main aims and objectives are to increase real estate investments and economic growth, apply proper regulations in the real estate market and protect the rights of citizens and investors in the market.
In this article, we will take an overview of some of the key areas that RERA plans to regulate.
RERA will regulate all developments in the Bahrain real estate market. All developers will have to obtain a licence from RERA in order to develop projects and sell them off-plan in a way to protect buyers and create trust in the market.
The broker licence is one of the main steps implemented by RERA. The agency has introduced specific requirements in line with international standards in order to become a real estate broker in Bahrain. A few requirements include market knowledge and real estate experience. Brokers must also learn to create a proper contract between the broker and seller, which will be clear and based on guidelines. They must also provide quarterly reports on all sales transactions. This will make real estate deals clear for all parties, especially end-users.
RERA will also implement the Bahrain Valuation Standard (BVS). It has rules and guidelines derived from the International Valuation Standard (IVS) and RICS (Royal Institute of Chartered Surveyors). All valuers will have to apply for this licence. In order to avoid conflict of interest, RERA has passed a rule that a licensed broker can’t be a valuer. It has also applied the grading system which grades valuers depending on their experience and education, ranging from A grade to D.
The RERA will also focus on streamlining owners’ associations. An individual or a company can obtain the licence to be a part of an owners’ association if they comply with the code of conduct set by RERA.
Professional insurance indemnity is another key aspect covered by RERA. This has been applied in order to protect professional workers in case of any issues raised later due to any future loss or damages from negligence or breach of duties. In this case, insurance companies will compensate the damaged party on behalf of professionals.
In conclusion, the RERA will have a very positive impact on regulating the Bahrain real estate market and help build trust between all parties involved.
This article was published as part of the fourth edition of Property Finder Bahrain’s Trends Report