What Law No. 7 means for Dubai’s real estate sector
Dubai Municipality said the updated rating system, which is expected to provide greater transparency to property developers and property owners, will assess contractors and consultants on the basis of such KPIs as financial solvency; the rate of emiratisation; participation in CSR initiatives; the timely delivery of projects; the adoption of innovative, tech-driven project designs and execution methods; and the integration of detailed feedback from property owners.
The second was the introduction of the updated contracting law (Law No. 7), under which all contractors operating in Dubai have to be classified based on their expertise, qualifications and whether they have the resources to take on a project. Further, the law stipulates that any sub-contracts can be awarded only after prior approval.
According to authorities, contractors have no option but to comply, for any failure to do so will attract penalties, including up to AED 100,000 for first-time violations and up to AED 200,000 for repeat violations with a single year, temporary suspension from carrying out any project activity, a downgrade to the contractor’s classification, and removal in full from the official contractors’ registry.
The law signals a push towards value over cost. It will induce contractors to maintain technical competence and, overall, ensure a proper track record, which will be factors in awarding contracts, as opposed to facilitating contractors to win bids on the lowest quotes during the tender process.
As Editor, I am pleased by the development, especially considering that Climate Control Middle East has always advocated for ethical practices in the buildings sector. The advocacy has been the fulcrum of The Client, Consultant, Contractor Conference, which over the years has seen stakeholders raise the need for greater accountability and ethicality in construction practices towards achieving socio-economic and sustainable development goals in an orderly manner.
Well done, Dubai! This is so much a step in the right direction.