Decree seen as driving away foreign investors - Decree issued to address repeated problems in recent fairs
KUWAIT: Organizers of the real estate exhibitions are not satisfied with the new strict conditions on organizing those expos set by the recently approved ministry decree No 639/2017. According to the Ministry of Commerce and Industry, this decree was issued to protect the rights of both the participating real estate companies and the clients, and came after the negativities that occurred in previous fairs.
Qais Al-Ghanem, Secretary General of the Kuwait Real Estate Union said, "This decision brought transparency. We at the union care to protect the interests of Kuwaiti investors, as individuals are usually not well experienced in the same way the professional real estate companies are. Companies cannot easily be cheated."
According to him, this law covers around 75 percent of this issue. "The permanent committee that was formed recently and is headed by the Minister of Commerce and includes the Ministry of Foreign Affairs and the union will further study the conditions for holding and organizing the real estate exhibitions. I do not think that this decree will delay people's business," added Ghanem.
The main reason behind issuing this decree was the repeated problems that took place in many real estate fairs that were held in Kuwait. "This decree will protect the investments and rights of the Kuwaiti investors abroad, and the investors will not be obliged to travel abroad before buying a property," he explained.
The law includes conditions for organizing and holding fairs in licensed locations and by legal bodies. Also, the organizers should apply for a license to hold a real estate fair, at least two months in advance. This application should include the name of the fair, its time and place, names of the participants along with a copy of their valid licenses to practice this business that are certified by the Kuwaiti embassy in their country.
The decree also banned selling apartments on 'timeshare' bases. The commerce ministry banned the participants whether they were exhibitors, developers, or marketing companies, to sell properties, sign contracts, or receive any payments during the exhibition. It also banned organizers or participants from marketing properties or projects with guaranteed returns or with investment content under any name.
Saud Murad, General Manager of Al-Masar Group said that this decree of the Ministry of Commerce will not encourage the business of real estate events in Kuwait. "Normally the government takes an action to facilitate and attract the investors to come to Kuwait and facilitate the exchange of opportunities. This decree contradicts the facts," he noted.
"This article or decree is holding the business down. The ministry has put so many terms and conditions that are not applicable in reality. This decree has one message, which is that the ministry does not encourage international real estate business by setting irrelevant conditions. There is a special department at the Ministry of Commerce that protects consumers' rights, and where complaints can be made. I understand that the ministry should secure costumers' rights, but on certain levels. The consumer also should double check the property before buying, as well as take legal consultation, and not just look for the returns of the investment," he added.
There are risks in any business. "The same concept may be applicable on shares, for instance, as many people lose the value of their shares; it is the same with property. If cheated on, there are legal channels that the customer can follow. The customer should carry part of the responsibility, and no business is risk free. Instead of this decree, the ministry can hold awareness campaigns for the customers on how to protect themselves," stressed Murad.
Murad believes that this decree has not eliminated the risk. "Customers are still exposed to risk, and the decree has only reduced the speed of the business in the country. This decree shows that we do not welcome any international business here. In fact all the international properties are under sovereign law of the country where they are located and our decree will not apply on them," he concluded.
By Nawara Fattahova