The proposed Investor Protection Law, now promises real estate investors in Dubai, the right to seek cancellation of contracts and obtain complete complete refund, in case of any delay in handover of units, and failure to complete promised amenities as per sales contract.
According to the proposed law, an investor will have the right to cancel contracts and obtain complete refund, if the developer has delayed handover of the units by more than eight months.
According to another provision of the law, it is mandatory for the developer to provide all promised common amenities in the contract at the time of handover. Hence, gymnasiums, swimming pools and other promised amenities in the building will have to be ready before officially handing over the key to owners. Failure to do so, will lead to cancellation of contract.
Another proposed provision in the law states that if a unit turns out to be 30 percent smaller than actual net area in the contract, the investor will have the right to cancel the contract and obtain complete refund.
In case of off-plan sales, the draft proposes to make it mandatory for developer to obtain all RERA approvals and register all saleable units with the Oqood system of Dubai Land Department, the online registration system. The developer is obliged to register all contracts with RERA, and disclose all information about the project’s handover, escrow account etc.
The draft law mentions that a reservation form will be considered “void” if the developer has failed to offer the investor an agreement within 15 days of signing the reservation form.
The Director General of Dubai Land Department, Sultan Bin Mejren, mentioned that the department has completed finalization of the draft law regarding protection of real estate investor, and the law will be implemented by June-end.
According to Managing Partner of HPL Yamalova & Plewka, JLT, Ludmila Yamlova, mentioned that various provisions mentioned in the draft are helpful for investors, particularly, as it gives them the right to cancel, rather than just seek compensation.