Monday, April 06, 2009

New regulation likely for termination of off-plan contracts in Dubai

The Dubai Land Department has amended the Article 11 of Law No.13 regulating the Interim Real Estate Register, and this will be released in 15 days time. Once, released the new regulation is hoped to introduce provision for cancellation of contracts, and is hoped to benefit the market.

The department had already issued an internal circular during November 2008, wherein the circular stated that in case of termination of an off-plan contract, the developer can retain 30 percent of the contract value (30 to 70 percent of the amount paid), and that this would be applicable to amounts exceeding 30 percent.

However, in case of termination of contract, the developer of the property will retain the amounts paid by the buyer, until the real estate is sold.

The Director-General of Dubai Land Department, Sultan Butti bin Mejren, has said that the revised article would establish new grades for properties and developers, and would be more than the 30-70 rule, currently applicable.

The Law No.13, Article 11, which is currently applicable states that a developer is required to keep the Land Department informed, if a buyer breaches a sales contract. Thereafter the department would notify the purchaser personally or by registered mail or email, giving him one month time to fulfill the contractual obligations. At the end of the term, the developer can cancel the contract and refund the sum paid by the buyer, after deducting an amount not more than 30 percent of the total value of the unit.

5 comments:

peter39 said...

It is imperative for Dubai in particular and the UAE in general that investor confidence in the property sector in restored as soon as possible. Without this, the future of Dubai will be less certain and so it is in the interests of the Dubai Government to ensure investors believ the new laws are fair. Therefore, any new property related law should be brought in only after consultation with Investor Groups who are known to RERA.
"Developers will come and go, but once investors lose confidence they will go and stay away."

Anonymous said...

It is very important to bost the confidence of invester over property market of Dubai that Govt should take steps to that invester can get back their money from the Develoers who has recived more than 20% from their customers but has not yet start their projects or not to intend to start it and wasting the time and money value of customer to say that it will start after long dely.these circumstances has shaken the confidence of invester over Dubai.

Anonymous said...

I've written to RERA/Land Dept regarding my investment in a project that has never started since 1year and 6months and I've never received an answer.
Can somebody advise me whom to contact ?
Abdoul Kalik Kassim

Anonymous said...

If you are based in the UAE, it is advisable to go to the RERA offices personally.
If you are unable to do this, I suggest you get a Dubai based lawyer to vist the RERA offices on your behalf and get an answer. Obviously, you will need to make sure the lawyer is properly birefed and that you get an estimate of their costs in advance otherwise they may prove to be a waste of time and money.
RERA are very busy, so writing letters won't work.

Anonymous said...

It should be imperative that a govt dept like RERA who was supposed to protect investors rights do their job - remember the press release "RERA to clamp down on developers" what happened to that? Being busy is not an excuse they are paid to do a job and that includes answering letters of complaints from investors and not to be one-sided only like they have been otherwise why have an online complaint system. Why is a developer able to do things after the fact with RERA and get away with it. Escrow accounts came out in 2007 why weren't investors notified of this and why were investors still paying into non escrow accounts? Who is able to travel to Dubai every 5 minutes and try and obtain answers from RERA which will never happen anyway. Sure the concept seemed like it was a good idea but when is it going to be put into practice. Investor confidence has diminished and Dubai will take a long time to recover because of the way investors have been ripped off. Why is RERA busy obviously the complaints from investors is too overwhelming because if there was nothing wrong and everything was right their job would be a lot easier. Stealing monies and keeping them from investors is not the way it should happen and the govt should be intervening to ensure those monies are repaid and with interest. How is it possible that any person can take money from someone and not deliver the goods for services paid. What is happening is that the waiting game is of their own making, the delays and everthing else the developer is to blame. How many investors have lost their monies already and how many more will because they are being ignored both by RERA and the developer and the justice system as there apparently is no recourse for the investor but the developer has got everything on their side including the assistance of lawyers - who's monies are paying for this? This is a a total sham and it should have been stopped long ago. Dubai deserves what they reap!