Development management agreements (DMA) are vital for protecting success in the real estate market in Qatar, said an industry expert.

According to recent data from property developers, real estate year-on-year sales in Qatar jumped by nearly a third in June, with land purchases making up an increasing proportion of transactions.

Of the 627 deals struck in June, 446 were for plots of land, indicating increased activity from developers rather than sales of completed units or resale activity. Surging demand for property could prompt developers to launch more projects through the end of 2014 and into 2015.

"A DMA is used where an owner wishes to engage a third party to carry out a development on the owner’s behalf, and is suitable where the owner may not have the necessary skills, expertise or capacity to undertake the development," explained Simon Green, the head of real estate and construction in the Middle East at Charles Russell, a leading international law firm with offices in Bahrain and Qatar.

Green was speaking at a workshop held in Qatar to discuss the benefits of DMAs to an owner who seeks to develop land or property and wishes to appoint a developer to do so on his behalf.

"An owner may wish to engage a developer under a DMA for a number of reasons, including the owner lacking the expertise, experience or capacity to carry out the proposed development itself, or because the owner wishes to pass on the management, administration and performance responsibilities in relation to the development to a third party," stated Green.

The workshop, held at the Grand Hyatt hotel Doha was led by Green with an additional presentation from visiting partner, David Savage, the global head of property and construction. It was also attended by over 70 industry professionals.

It discussed all aspects of drafting a DMA, including; the conditions precedent, appointment of and obligations on the developer, development management fee, owner's obligations, costs, scope of services and authority, suspension and termination, as well as market trends.

"Professional guidance and expertise will minimise the risk of dispute by drafting a complete and effective DMA, where experts engaged to draft a DMA will often identify important issues that the parties had not previously considered," observed Green.

DMA was one of the significant steps towards setting a framework to regulate and support key projects in Qatar, in line with the fundamentals of the country's fast growing economy and rapid population growth, he added.-TradeArabia News Service