Dubai mandates registration of off-plan property sales
Tuesday, August 26, 2008
It has been made mandatory that off-plan property sales in Dubai be registered with the Land Department of the emirate, and no developers will be permitted to charge transfer fee on such sales, according to a new law announced yesterday.
The Law No.13 of 2008 aims to regulate off-plan sales, and mandates registration with the land department, said Emad Eldin Farouq, Senior Legal Advisor, Land Department.
The practice of marketing residential or commercial units based on an architectural plan of the property, prior to building the structure, is termed as 'off-plan sales'.
"Any sale or disposition that transfers or restricts title will be void, if not registered in the interim real estate register," states the new law.
Hence any developer, who markets or sells other disposition prior to implementation of the law, will have to register it within 60 days, Farouq clarified.
The law also states that master developers and sub-developers will not be permitted to charge transfer fee on off-plan sales, henceforth. However, they will be permitted to accept administrative charges once it has been approved by the Land Department.
The Chief Executive Officer of Dubai Properties Group, Mohamed Binbrek, agreed that this is surely good news, as the interest of small investors and buyers will be protected, and that the Land department will now regulate the market. The new law is likely to add credibility to the market.
Last week, Dubai passed on a new mortgage law, which states that mortgage contracts need to be registered with the Land Department, and specified the size of the loan, the repayment period and the value of the property to which the loan is linked.
However, developers say that they will insist payment of a minimum of 20 to 30 percent of the property value prior to transferring to a second buyer under a resale transaction. They will also screen customer profiles prior to selling the property off-plan.
"he initial transfer and sale of off-plan properties will be permitted only after payment of 30 percent of total property value,"said an Emaar spokesperson.
Social BookmarkingThe Law No.13 of 2008 aims to regulate off-plan sales, and mandates registration with the land department, said Emad Eldin Farouq, Senior Legal Advisor, Land Department.
The practice of marketing residential or commercial units based on an architectural plan of the property, prior to building the structure, is termed as 'off-plan sales'.
"Any sale or disposition that transfers or restricts title will be void, if not registered in the interim real estate register," states the new law.
Hence any developer, who markets or sells other disposition prior to implementation of the law, will have to register it within 60 days, Farouq clarified.
The law also states that master developers and sub-developers will not be permitted to charge transfer fee on off-plan sales, henceforth. However, they will be permitted to accept administrative charges once it has been approved by the Land Department.
The Chief Executive Officer of Dubai Properties Group, Mohamed Binbrek, agreed that this is surely good news, as the interest of small investors and buyers will be protected, and that the Land department will now regulate the market. The new law is likely to add credibility to the market.
Last week, Dubai passed on a new mortgage law, which states that mortgage contracts need to be registered with the Land Department, and specified the size of the loan, the repayment period and the value of the property to which the loan is linked.
However, developers say that they will insist payment of a minimum of 20 to 30 percent of the property value prior to transferring to a second buyer under a resale transaction. They will also screen customer profiles prior to selling the property off-plan.
"he initial transfer and sale of off-plan properties will be permitted only after payment of 30 percent of total property value,"said an Emaar spokesperson.
Labels: Dubai Real Estate, Off-plan, Property Law
