Saturday, January 31, 2009

Buyers can approach Property Court for terminated off-plan contracts

A senior government official has revealed that property buyers can contest their "terminated" off-plan contracts signed after 31st August 2008 in the newly established Property Court, by going through the Dubai Land Department (DLD).

The buyers can also claim compensation from the Property Court, if he establishes a ground for the termination, said Emad Eldin Farouq, Senior Legal Counsel at the DLD. The Land Department, issued a circular, which states that developers, and not buyers, will have to initiate the official procedure to cancel the off-plan transactions.

However, for sales contracts signed prior to 31st August 2008, the terms of the contract would be applicable to both the parties involved, as per the UAE Civil Code. But, these need not go through the DLD.

Detailing the meaning of the Article 11 under Law No.13, the department said that in case of termination of an off-plan contract, the developer will be entitled to 30 percent of purchase value plus 30 percent of any further investment paid over and above the purchase price.

In case of a buyer intending to contest this, the buyer could approach the Property Court, which would apply the civil jurisdiction on this. The Property Court may agree or disagree with this and the court has the right to choose to adopt or cancel these terms or apply any other rules to this. The Property Court will abide by the regulations under the Civil Code Law, clarified Farouq.

Any agreement can be terminated in a legal manner, either voluntarily, amicably or through a court order depending on the facts.

As per the Civil Coder, the buyer has the right to terminate the contract, in case of a breach by the seller. Farouq also said that investors facing cash-flow constraints can approach the Dubai Land Department for re-scheduling payments for their properties.

1 comment:

WebJunky said...

true, but look at the numbers. relative to dubai and the united states, this decline is nothing. its a natural part of the economic cycle. AD's leadership is by far more conservative, smarter and more calculated in decision making