Government of Dubai Dubai Lands Department Law No.8
Posted by 7starsdubai on January 4, 2009
Government of Dubai
Draft Law No. 8 of 2007
Concerning Real Estate Development Trust
Accounts in the Emirate of Dubai
Draft Law No. 8 of 2007
concerning Real Estate Development Trust Accounts in the Emirate of Dubai
We, Mohammed bin Rashid Al Maktoum, the Ruler of Dubai,
After perusal of Federal Law No. 5 of 1985 in respect of Civil Transactions, as
Law No. 7 of 2006 in respect of real property registration in the Emirate of Dubai; and
Law No. 3 of 2006 specifying the areas where non-UAE nationals may own real
properties in Dubai,
Do hereby issue the following Law:
Definitions and General Provisions
This Law shall be named “Law No. 8 of 2007 concerning Real Estate Development
Trust Accounts in the Emirate of Dubai
In the application of this Law, unless the context requires otherwise, the following terms
and expressions shall have the meanings as set out opposite each of them:
: The Emirate of Dubai
: The Land Department
: The President of the Department
: The General Director of the Department
: The Register prepared at the Department to register
: The bank account of the real estate project in which the
amounts received from off-plan units buyers or the project
financiers will be deposited.
: The financial institution or bank approved by the Department
to manage a trust account.
: The government authorities which grant licenses to
: A natural or corporate person licensed to buy and sell real
properties for development purposes. The term shall include
the master developer and sub-developer.
Real Estate Development
: The construction of multi-storey buildings or complexes for
residential or commercial purposes.
: An allocated part of the property sold by the developer to
The provisions of this Law shall apply to developers who sell off-plan units in real estate
development projects in the Emirate and, in consideration, receive payments from
buyers or financiers.
A special register to be named “The Developers Register” shall be prepared at the
Department. The names and particulars of developers licensed to carry out real estate
development activities in the Emirate shall be recorded in the said register. No
developer may carry out the said activities unless it is registered in the said register and
licensed by the competent authorities pursuant to regulations issued in this regard.
After obtaining a written permit from the Department, a developer may advertise in local
or foreign media or participate in local or foreign exhibitions to promote selling off-plan
units in the Emirate. The Director shall issue the resolutions as required to regulate the
requirements for advertising in the media or participating in exhibitions.
Creating a Trust Account
– A developer wishing to sell off-plan units must apply to the Department to open a
trust account. The application should be accompanied with the following:
1. Trade license and Dubai Chamber of Commerce and Industry membership
2. Title deed of the plot to be developed, if any;
3. A copy of the contract between the master developer and the sub-developer;
4. Architectural designs and preliminary engineering plans approved by the
competent authorities and the master developer;
5. A financial statement of the costs, revenues and expenditure of the project
certified by a chartered auditor;
6. An undertaking by the developer to commence the project construction works
after obtaining the master developer’s approval to sell off-plan units;
7. the sale contract form between the developer and the buyer.
– The Department shall issue its approval to the developer to open a trust account if
the above documents are provided, otherwise the Department shall require the
developer in writing to complete the documents or provide the required information.
The trust account shall be created under a written agreement between the developer
and the trustee. Under the said agreement, the amounts paid by buyers of off-plan units
or received from the financiers shall be deposited in a special account to be opened in
the name of the real estate project.
The said agreement shall set out the terms for managing the account, the rights and
obligations of the contracting parties and other terms and conditions. A copy of the
contract shall be lodged with the Department.
The Department may add a note regarding the purchase agreement between the
master developer and the sub-developer in the record of the plot owned by the master
developer. Further, the buyer of an off-plan unit may apply to the Department to add a
note regarding the purchase agreement entered into with the sub-developer in the
record of the plot on which the project is to be constructed.
Subject to Article 4 of Law No. 7 of 2006 concerning real property registration in the
Emirate of Dubai, sole proprietorships or companies may obtain a license from the
competent authorities to carry out real estate development in the Emirate in accordance
with the requirements and regulations in this regard.
Management of the Trust Account
1. A trust account shall be opened in the name of the project and shall be used only
for the purposes of developing the real estate project. The amounts deposited in
the said account may not be attached in favor of creditors of the developer.
2. A developer carrying out several projects should open an independent trust
account for each such project.
The Department shall prepare a register includes names of financial institutions and
banks who act as trustees. A trustee should be proficient in managing trust accounts.
The agreement between the Department and the trustee shall set out the duties of the
trustee and the terms under which the trust account is managed.
The trustee should provide the Department with periodical statements of the revenues
and expenditure of the trust account. The Department may assign an auditor to audit
the statement and data. Further, the Department may at any time require the trustee to
provide it with such information or data as it may deem necessary.
If the Department finds any violation of the provisions hereof or the executive
regulations issued hereunder, it shall advise the trustee of such violation in writing and
request it to rectify the same within a specific period of time and advise the Department
in writing of such rectification.
The depositors or their representatives may inspect the accounting records related to
them and request copies thereof. Representatives of the official authorities may also
inspect the records and obtain copies thereof.
If the developer mortgages the project in order to obtain a loan from financing
institutions or companies, the developer should deposit the mortgage amount in the
trust account, and such amount shall be disposed of in accordance with the provisions
of this law.
1. A trustee should withhold at least 5% of the trust account deposits after the
developer obtains the completion certificate. Such withheld amounts shall be
paid to the developer only one year after the units are registered in the names of
the buyers and title deeds are issued in their names.
2. In the events of unforeseen circumstances resulting in the non-completion of the
project, the trustee should, after consultations with the Department, take
measures as required to maintain the interests of depositors.
Any person who:
1. deliberately provides the competent authorities with inaccurate documents or
data in order to obtain a license to carry out real estate development activities;
2. knowingly offers for sale units in unreal real estate projects;
3. embezzles, illegitimately uses or spends payments made to him for real estate
4. an auditor who deliberately prepares false report regarding the result of auditing
the financial position of the developer, or deliberately hides material information
in such report;
5. a consultant who knowingly certifies false documents in relation to the real estate
6. a developer who deals with a broker who is not registered in the real estate
developers register in accordance with the provision of regulation 85/2006
concerning real estate brokers in the Emirate of Dubai
shall be punished by imprisonment for no less than one month and a fine, or either
A developer shall be de-registered in the following events:
1. if it is declared bankrupt;
2. if it fails to commence the construction works within 6 months from the date of
the approval granted to it to sell off-plan units without having an acceptable
3. if the license granted to it by the competent authorities is cancelled;
4. if it commits a violation under Article 16.2, 3 or 4 hereof; or
5. if it commits a violation of the laws and regulations regulating the real estate
activity in the Emirate.
Existing developers at the time the provisions of this Law become effective should
adjust their positions to comply with the provisions hereof within 6 months from the date
this Law is published in the Official Gazette. The Department may extend the said
period as it may deem fit.
The Department may charge administrative fees against the services provided under
Any provision or procedure in any law or regulation shall be cancelled to the extent the
same is in conflict with the provisions hereof.
The President shall issue the resolutions required to implement the provisions hereof.
This Law shall be published in the Official Gazette and come into force from the date of
Mohammed bin Rashid Al Maktoum
Ruler of the Emirate of Dubai
Issued in Dubai on this day ____________2007
Corresponding to ______________1428 A.H.
An amended copy of the draft law, prepared on 14.03.2007
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