Tuesday, August 06, 2013

Dubai to re-fund investors in officially cancelled property projects

Dubai will liquidate several cancelled real estate projects and use the funds to repay investors who lost billions of dollars in the real estate market of the emirate, say latest reports.

As per the latest decree by the Ruler of Dubai, Sheikh Mohammed bin Rashid Al-Maktoum, a special legal committee would be formed to settle disputes pertaining to projects that have been officially cancelled by RERA.

The crash of the property market in Dubai during 2009-10, had more than halved the real estate prices in the emirate, compelling developers to scrap off hundreds of projects. While few developers shut down, others left without keeping their customers informed.

Several individuals and corporations had purchased properties and handed over the money, while the projects were still in their initial design stages, and they never saw the light of those projects till date, and they were not able to recover their money too.

Nearly 217 property projects were cancelled in Dubai during 2009-11, as per the data compiled by RERA last year. These included a Tiger-Woods branded golf course and a kilometre tall tower to be built by Nakheel.

Dubai has now almost recovered from the crisis, and prices of properties have begun to rebound, but, the legacy of unpaid debts and unsettled contracts may come in the way of recovery. The new committee will examine the financial status of the developers and analyze deposits in the case of cancelled projects.  The committee will then take the necessary actions and issue decisions that guarantee the right of those who have purchased properties falling into this category.

The new committee will supersede all courts in Dubai, including those in Dubai International Financial Centre. Several state-funded mega projects such as the Palm Deira by Nakheel, Palm Jebel Ali and the World, were sold to investors and later stalled. They will not be however, handled by the new committee, as they have not been officially scrapped, and are merely delayed indefinitely.

No comments: