Safe as houses

ONE of the kingdom's leading property professionals is calling for tough legislation to govern the industry.

Neil D'Silva set up Norwich International Consultants (NIC) in 1997. His company was initially involved in real estate marketing, being responsible, at one time, for Al Marsa floating city and also other areas of Amwaj.

Now NIC has moved behind the scenes carrying out research and development work for developers and also operating with joint venture partners around the world to promote and now build top-of-the-range, environmentally-friendly developments.

In light of the Bahrain government's plans to formulate new legislation to regulate the industry, Mr D'Silva has spoken out in the hope of encouraging reforms which could see the kingdom's property sector viewed as an example in the Gulf region for its levels of control and transparency, in much the same way as the banking sector.

He said: "We need a law which will be universal, covering everyone involved in the property sector from the developer to the contractors to the real estate agents right through to how developers and their agents deal with the end-users - the people and businesses who are actually going to be living in or using the properties.

"The end-users' interest must always be protected. After all, they are a developer's target market. Instead of developers being able to take money from people and then delivery being held up, for whatever reason, it would be a good idea that, once a certain percentage of a development is sold, say five per cent, then a 'body-corporate' is formed which includes the new owners so they know what is happening and what they are getting."

The 'body-corporate' would have the ability to oversee the construction milestones, management and facility-related activities, as stated in the brochures, and construction standards to ensure the development could stand for more than its leasehold period and common areas are maintained and priced accordingly.

Neil D'Silva said that any new law should be formulated by government departments and must have the input of professionals such as qualified engineers, environmentalists, architects, developers, real estate professionals, local and international lawyers, insurance professionals, Municipal Council members, Land Registry Directorate, Ministry of Housing, urban planners, reputable contractors and those from the real estate industry. This type of legislation would attract major developers and investors.

Such legislation is already well established in areas such as Australia, Singapore and Hong Kong.

"In this way regulations could be put in place which would establish a code of ethics and standards for the whole industry to work towards such as establishing construction milestones which have to be met during each project and which could be linked to when payments are made by purchasers," said Mr D'Silva.

"This in turn would introduce a need for insurance professionals, so that both developers and end-users are covered in the event of unexpected and unavoidable delays.

"We should be requiring every large scale project that is carried out in Bahrain to have an Environmental Impact Assessment which should be backed up with a status in law so that developers cannot ignore the effects of their construction.

"And this links into good and effective planning, for example if you're living in a five-storey building, you don't want to have a 50-storey one built next door.

"Bahrain is undergoing a period of rapid expansion and what I really don't want is to look at the island in five or 10 years time and discover that Bahrain looks as if it was built in a hurry.

"Good planning and zoning laws, formulated by people with experience, would stop this and help make Bahrain's ongoing development a much more positive prospect.

"They would also help to attract international investment to the island at a time when there is so much financial uncertainty.

"Bahrain's banking sector will be among the least affected in the region by the world recession because we have proper codes of ethics in place in the banking industry and the Central Bank of Bahrain regulates transparency.

"We should be seeking the same level of guidance and regulation for the property industry which would make it too among the most attractive in the region, not least because Bahrain still has land on which to build and there is large scale reclamation unlike Dubai, which is fast running out of available space."

The government has not taken official steps towards new legislation as yet but those in the property industry are aware it is coming and many would welcome it.

Saud Kanoo, developer and chairman of Amwaj Islands, is one of those who believes regulation could be a good thing.

Mr Kanoo said: "We have not heard anything officially as yet but if this was something that would improve the way things are done and help stop cowboy traders then it would be a good thing. But it would have to be studied from all angles, too much regulation and we would lose out on investment.

"There's a need for housing for sure. We know that but we also know that the government has not been able to deliver the necessary infrastructure.

"We don't just need legislation but also physical planning needs to take place and developers need to be aware of the government's long-term infrastructure plans.

"Legislation could take us some way along the right path and I would like to see the private sector more involved otherwise you end up with the situation where you have a 20-storey building but no-one can live in it because there is no infrastructure. In that way everyone just ends up frustrated."

And their concerns were echoed earlier this year when Abubaker Al Khouri speaking on risk management in real estate told Cityscape Abu Dhabi that quality of completion is one of the most important risk factors in Gulf real estate adding that 'If customers' expectations of quality are not met, it will have negative impacts on the market as a whole'.

Mr D'Silva concluded: "That's exactly right and Bahrain is in a great position to lead the way in the Gulf and make sure that does not happen."