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      Criminal Complaint filed in Germany against Sheikh Maktoum Hasher Maktoum Juma Al Maktoum CEO of Dubai Developer Al Fajer Properties The Dubai Sheikh who mislead and extort a German Couple  Germany – Dubai 2011 A German elderly couple , today 80 + 50 years old who have been Dubai Tourists since a decade, bought in 2005 an apartment at Nakheel´s Dubai Residen […]
    • UAE: Human Rights Blogger, Sorbonne Lecturer Charged With ‘Humiliating' Officials
      source Human Rights Watch www.hrw.org (Beirut) - The United Arab Emirates attorney general should immediately drop all charges against five pro-democracy activists to halt their trial, Human Rights Watch said today. The charges of "humiliating" top officials relate solely to the defendants' peaceful use of speech to criticize the UAE governmen […]
    • Nakheel Dubai Sunland Case
      June 5, 2011After 21 hearings, Chris O'Donnell, the Australian chief executive of Dubai's major developer, Nakheel, came to the defence of his former colleagues Matthew Joyce and Marcus Lee. Mr Joyce and Mr Lee are accused of profiting from the sale of land that had been earmarked for a colossal high-rise development, which was to include the futur […]
    • Dubai Nakheel CEO decided to leave the company
      Dubai June 7, 2011 Nakheel said on Wednesday that its CEO Chris O'Donnell had left the company "after completing his contract terms". O'Donnell, an Australian who joined the developer in 2006, said he had decided to leave Nakheel following five years spent with the company, the statement added. O'Donnell has overseen a traumatic time […]
    • Owner of Dubai Developer Damac Hussain Sajwani files case against Egypt corruption ruling
      Dubai property developer Damac said on Tuesday it had filed an international arbitration case against Egypt over a land dispute and the conviction of its chairman and owner, Hussain Sajwani.A Cairo court last week sentenced Sajwani in his absence to jail and ordered him to pay a $40.5 million fine in connection with his 2006 purchase of land at Egypt's […]
    • Dubai Palm Jumeriah - Investors plan to take legal action
      Investors in Dubai Palm Jumeirah’s Golden Mile complex will this week serve the developer behind the project with a legal ultimatum to hand over their units or issue them with a refund.Up to ten investors in the luxury complex plan to issue Souq Residences with legal notice in a bid to force a resolution to a dispute that has been ongoing for more than a yea […]
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Posts Tagged ‘Rera property laws Dubai’

Criminal cases against Dubai Developer-Proof of Fraud

Posted by 7starsdubai on October 3, 2010


Investors can file a criminal case against a developer only if the reason for developer’s default is criminal in nature and there is evidence to
prove it, according to a lawyer.
“Investors can file a criminal case against a developer on the basis that it has not started a project and/or opened an escrow account, but
only if the reason for developer’s default is criminal in nature, and there is evidence to prove it on its face,” Ludmila Yamalova, Legal
Consultant/Partner, Al Sayyah Advocates & Legal Consultants, told Emirates Business.
Raza Mithani, Senior Associate, Al Tamimi and Company, Advocates & Legal Consultants, said: In Dubai, a criminal case may be filed
where there is evidence of fraud. Failure to open an escrow account may, depending on the circumstances, constitute evidence of fraud.”
Tatjana Fuhr, Legal Consultant at Fichte & Co Legal Consultancy and KK Sarachandra Bose, Partner and Corporate, Commercial and
Contract Lawyer, Dar Al Adalah Advocates & Legal Consultants, agreed that a buyer can file a case against a developer who has not
started the project and collected funds without opening an escrow account.

read more

proof of fraud to file a criminal case against a developer in Dubai

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Posted in Dubai Justice, Dubai Property Investors, Dubai Property legal, Fraud Dubai, Immobilien Betrug Dubai | Tagged: , , , , | Comments Off on Criminal cases against Dubai Developer-Proof of Fraud

Dubai Property Court – It´s Court Time

Posted by 7starsdubai on July 30, 2009


source Emirates Business

Abdul Qader Moosa, Chief Justice, Property Court, has said rights of real estate investors in Dubai are reserved under the laws enforced in the emirate.

He said Dubai has a specialised property court and advanced laws that go along with real estate developments and protect the rights of all parties of projects – investors, developers and contractors. Moosa told Emirates Business that Property Court judgments are more accurate and faster than those in many other Arab countries. This year the time a case takes at the Property Court of First Instance has gone down to 45 days from 57 in 2008.

Meanwhile, the time a case takes in the full [appeals] court has risen to 90 days in 2009 from 80 days last year because of the increase in the number of cases this year. It is a very short time in comparison with the years cases take in any other Arab country, he said.

A year has elapsed since the establishment of the Property Court. What are the court’s missions and achievements?

The court was established on June 15, 2008, by order of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. It was part of the establishment of several specialised courts with an economic nature. Sheikh Mohammed believed the economic activity and progress of Dubai required the establishment of such courts, which aimed at fast and cordial settlement of financial and economic disputes.

Three specialised courts were set up: commercial, civil and real estate. Now Dubai has six specialised courts of first instance, which also include the civil status, labour and criminal, in addition to the previously mentioned courts. The emirate’s court system had to be updated to go along with the development taking place at the economic level in terms of the volume of projects as well as the growing number of workers and employees.

Real estate cases are those related to disputes emerging from acts or transactions related to property or brokerage, except for rent cases that are exclusively handled by Dubai Municipality’s Rent Committee.

The partial [first instance] real estate cases cover disputes whose values do not exceed Dh100,000. Such cases are heard by a court presided over by one judge. Meanwhile, full [appeals] cases are concerned for disputes with a value of more than Dh100,000. They are heard by an appeals court with three judges. And, like other judicial disputes, each real estate dispute case is allowed three litigation degrees (first instance, appeals and cassation). Only cases with a value of no less than Dh200,000 can be heard by the Court of Cassation.

What are the most recurrent real estate cases heard by the Property Court?

The court hears various types of cases, such as those related to demands of contract termination, contract validation, writing and handover of contracts, in addition to brokerage cases.

For instance, in contract termination cases, one party asks for the termination of a contract on the basis that the second party has failed to abide by the contract’s conditions. A buyer might ask for contract termination for failure by the developer to abide by conditions such as the completion of the project as scheduled. And, if proved, the court has to order the termination of the contract and the return of instalments paid, plus the proper compensation.

What about the size of cases heard by the Property Court, the litigation time and the percentage of completion?

The Property Court of First Instance received some 12 cases in the last six months of 2008. Judgments were given in five cases. Hearings usually took three months. In the first six months of 2009 the court has received 50 cases, and 43 were decided. Hearings are still on in the remaining seven cases.

The appeals Property Court heard 137 cases during the last six months of 2008. Twenty were decided while the rest were deferred to the 2009 judicial season. Each case took three months. Meanwhile, in the first six months of this year, the court registered 883 new cases, giving a verdict in 168 over a period of three months.

What are the judicial departments affiliated to the Property Court?

The court has five judicial departments, including three full [appeals] departments, one partial [first instance] and one for the enforcement of judgments. The latter is presided over by a judge who enforces the judgments issued by notifying the parties concerned to act within 15 days or face legal measures such as seizing of bank accounts, property, cars or even stocks.

In the light of the relatively short age of the court, how useful is the Property Court for the real estate sector of Dubai?

The presence of specialised courts in any country helps boost the confidence of those dealing with the subject they speacialise in. And the reality is that the real estate sector has acquired a large percentage of the emirate’s economic activity. The presence of a specialised real estate court working according to the principles of “justice for all” and adopting accuracy and speed in the settlement of disputes contribute to making Dubai an important attraction for investors in the region’s real estate.

How has the real estate crisis reflected on the cases heard and the types of disputes?

For a start, one has to stress that the volume of cases heard does not reflect the developments under way in the real estate sector, since the court is relatively new. This is also because of the presence of other specialised bodies and institutions, such as the Land Department, the Real Estate Regulatory Agency, the Contractors Association and others. And with the start of the real estate crisis, we noticed a state of fear as investors were concerned about the money they injected in property. The launch of the court coincided with the start of the financial crisis late last year, and we used to receive many queries from investors. We were surprised with the many cases of contract termination with developers by investors who fear that projects may not start. In fact we used to reassure buyers that there was an escrow account in which went all the money paid by the buyer. We reassured them that there was no fear their rights would be lost. That period witnessed many contract termination cases for failing to pay instalments. However, the number of such cases was very small compared to the volume of the emirate’s real estate projects.

What are the challenges facing Dubai’s real estate sector now?

In the light of the volume of projects completed, as well as those under way, I believe the biggest challenge is the simultaneous development and updating of laws that regulate the sector to go along with the developments. And in the absence of co-ordination and co-operation between us and the Land Department and Rera, both strategic partners, we work to update our legislations and laws to suit the sector’s needs. Also, as a property court, we have made a strategy that aims to expedite and facilitate litigation, reactivate partnerships with the bodies concerned, and to pass accurate judgments, modernise and develop real estate legislations in the light of the cases we hear.

What about the currently enforced laws and legislations?

At present we work under a number of laws, legislations and bills, including Bill No85 of 2006 on the real estate broker register, which allows officially recognised brokers to practice. There is also Law No13 of 2008 on the primary real estate register, which regulates the registration of property between the parties, and it is mostly off-plan sales. This is in addition to Law No7 of 2006, which is related to the permanent real estate register and includes the registration of property after it is completed. There is the Property Registration Law No3 of 2006, which defines areas where non-UAE nationals can own property, and Law No8 of 2007, which obliges developers to open an escrow account for each project and where investors’ money is deposited. Each project has a separate account, and it is not allowed to seize another project’s account to collect debts due on the developer.

What advice would you give to real estate investors?

Before buying property, an investor has to make sure that the developer, broker and the project where he intends to buy, are registered. Many investors buy from non-registered brokers or developers, or buy property that is not registered with the Land Department. Also, they have to deposit their money in the escrow account of the project, which guarantees their rights in case of any dispute. They need to be aware of the laws that regulate the real estate sector and which are available on the website of the Property Court and the Rera.

PROFILE: Abdul Qader Moosa Chief Justice, Property Court

Abdul Qader Moosa holds a bachelor’s degree in law and the police sciences diploma from Dubai Police Academy. He graduated from the Police Academy in 1994 and served as Chairman of the Lawyers’ Committee. He obtained a diploma from Dubai Judicial Institute in 1998. He was appointed deputy public prosecutor in 1995 and public prosecutor in 1998. In 1999, he became a judge in the Court of First Instance. In 2005, he was promoted to a judge of the Appeals Court and was appointed the chief judge of the Court of First Instance in May the same year.

In September 2006, he became the chief judge of the Labour Court. Moosa has won several awards, including the Distinguished Judge Award under the Dubai Courts Excellence Awards.

Posted in Dubai | Tagged: , , , | Comments Off on Dubai Property Court – It´s Court Time

RERA Dubai has designated 69 proptery projects

Posted by 7starsdubai on July 17, 2009


The Real Estate Regulatory Agency has been surveying every project in Dubai with an engineer who photographs the site and gives the official state of construction. Until recently, none of these projects were designated as stalled.

Now, Rera has designated 69 projects out of 407 surveyed (so far) as “on hold”, or about 17 per cent.

Two developers, in particular, are responsible for many of these: Abyaar Real Estate Development and Al Mazaya Holding, both from Kuwait.

Abyaar has put on hold 46 groups of villas in its Acacia Avenues project in Al Sofouh alone, as well as its Pier 18 project in Dubai Marina, its Olgana tower in Al Sofouh, and its Hiliana tower in Al Sofouh. That amounts to 49 projects, according to Rera’s survey

Al Mazaya has delayed 14 of its clusters of buildings in its Q Point development in Dubailand.

Other stalled projects include Damac Development’s Admiral Bay in Maritime City; Dheeraj & East Coast LLC’s Bay Residences in Business Bay; Marina Crown Real Estate’s The Vantage in the Dubai Waterfront; the RUFI Heaven in International City; and the RUFI Luxury Heights in the Dubai Waterfront.

Most of these projects are from smaller developers, so it’s most likely just the tip of the iceberg when it comes to delay.

Posted in Dubai | Tagged: , | Comments Off on RERA Dubai has designated 69 proptery projects

Property Prices Dubai will fall further

Posted by 7starsdubai on July 6, 2009


Source Arabian Business  05 July 2009

More than 60 percent of people think UAE property prices are going to drop by another 20-30 percent this year, according to an online poll.

Arabian Business asked its readers whether they thought the real estate market had hit the bottom, with just 5 percent in agreement.

Instead, some 63.4 percent of people thought there was still another 20-30 percent correction to come.

House prices in Dubai have tumbled 50 percent from their peak during the fourth quarter of last year.

Problems of over-supply and population shrinkage, with thousands of jobless expatriates expected to return home now schools have broken up, will mean continued pressure on prices.

The poll results provide a rather more pessimistic view of the UAE real estate market than a recent Shuaa Capital survey into investor confidence.

The Dubai-based investment bank found that 19 percent of investors believed that the market had bottomed out.

The investor confidence survey, conducted between June 13 and 16, is the only one of its kind in the region. It also found the highest increase in investor confidence, rising 16.8 points to 123.8 points on the month.

However, the Arabian Business poll found that only 6.1 percent of people were optimistic, believing that the market was now on the road to recovery.

While, 25.6 percent played it safe, saying nothing was going to change until the end of the year.

Posted in Dubai | Tagged: , , , | Comments Off on Property Prices Dubai will fall further

RERA Dubai freezes developer escrow accounts

Posted by 7starsdubai on May 27, 2009


source TheNational

May 28. 2009

The Dubai Real Estate Regulatory Authority (RERA) has frozen the escrow accounts of some property developers as it awaits assurances that construction is progressing and that all homes sold have been registered with the Dubai Land Department.

This is the latest measure by the authority to safeguard the interests of property investors as the market grapples with a shortage of lending and declining property prices.

Marwan bin Ghalita, the chief executive of RERA, said some developers needed to provide technical reports to the authority’s trust account department detailing the progress of construction before they can withdraw money from the accounts.

“There can be no withdrawal until they have completed the technical report,” he said.

“Payment needs to be linked to construction progress. They also need to prove to RERA that they have registered investors rights with the Land Department.”

Mr bin Ghalita would not say how many accounts had been frozen. RERA introduced the escrow account law in February last year.

Posted in Dubai | Tagged: , , | Comments Off on RERA Dubai freezes developer escrow accounts

Questions and Answers with the Dubai Land Department

Posted by 7starsdubai on May 21, 2009


Source Zawya

There has been considerable debate in the real estate sector following the issuance of Law No 9 of 2009 amending Article 11 of Law No 13 of 2008 on the Interim Register in the Emirate of Dubai . This law concerns specifically the issue of termination of sale and purchase agreements (SPAs) for off-plan units and the damages payable.

Mohammed Kamal, Head of Real Estate-Middle East at Lovells’ Dubai office, recently met with Emad Farouq, Senior Legal Counsel at the Dubai Land Department (DLD)
and Real Estate Regulatory Authority (RERA).

Below is a summary of the question and answer session with Emad Farouq.

Law No 9 of 2009 is now in force. Can you please explain the main implications of this law and how it affects the termination of SPAs for the sale of off-plan units?
This law seeks to impose a new regime for the termination and payment of damages for SPAs for the sale of off-plan units which will apply retrospectively to all prior SPAs. It will amend the provisions of Article 11 of Law 13 which previously stated that upon termination the maximum damages payable to a developer would be 30% of monies paid to date.

The law will also override the administrative circular which was issued by the DLD
in 2008.

Under Law 9, the developer will be entitled to damages strictly according to the progress of construction for the project regardless of what has been agreed in the SPA. There are 5 categories of damages ranging from no damages (i.e. developer will refund all monies received), in cases where RERA cancels the developer’s project, to entitlement to retain all monies received and recover any shortfall if the developer has completed 80% or more of the construction. The intention behind the law is to create a balanced and fair mechanism for the termination of SPAs and assessment of damages. The vast majority of SPAs and arrangements in the market are either vague or unfair, or both. Therefore it was absolutely essential to intervene to provide certainty in the real estate sector going forward.

Can you explain the developer’s obligations under Law No.9?

Generally the developer is obliged to issue notices for termination of SPAs through the DLD
will assess the merits of the case and then decide on whether the developer is justified in terminating the SPA and will also assess the status of construction of the project in order to identify which category of damages will apply.
It is important to note that although a developer may be entitled to resell a unit, it must account to the purchaser for any surplus monies it receives once it has received any damages it is entitled to i.e. the developer cannot be unjustly enriched.

Under Law No 13 of 2008, there is a requirement for all sale and purchase agreements to be registered by 30 October 2008. Has this deadline been extended?

Yes, the deadline has been extended but will be confirmed through the Executive regulations which are being reviewed. Currently, the DLD will allow registration of SPAs after the deadline, provided there is a valid reason for the delay.

What is the Land Department’s view on the recent Property Court judgment concerning the master developer, Mizin?

In this case the Property Court (which is a division of the Dubai Courts) considered an agreement which was not registered on the interim register under Law 13 of 2008 as null and void and ordered Mizin to refund all monies paid by the purchaser. It is clear that the Property Court has taken a literal interpretation of Law 13 and in this case has made a decision which is in favour of the purchaser.

The DLD considers the decision to correspond with our understanding of the interpretation and application of Law 13. In particular, it confirms that if an agreement is not sufficiently registered under the law, then it will be considered null and void and is not enforceable as a binding agreement. Registration is conclusive evidence of rights relating to property, whether they are registered in the real register or the interim register.

Does Law No 9 cover terminations of SPAs for both sales of plots and off-plan units?

Law 9 is intended to cover sales of off-plan units only. SPAs for plots will not fall under the categories for damages under Law 9 and the parties will need to rely on the provisions related to termination and damages under the SPA and, if necessary, issue proceedings in the Property Court to settle any disputes.

Can you confirm what will be covered under the Executive Regulations following Law No 9?

The Executive Regulations under Law 9 are intended to provide guidance on the procedures and practical application of Law 9, amongst other issues. The Regulations will predominantly cover the procedure for termination of SPAs and payment of damages. They will also confirm the rights and obligations of a developer when reselling a unit upon termination and refunding any excess monies to the purchaser. The Regulations will also cover the grounds for cancellation of projects by RERA.
RERA may also request an independent third party expert report to assess the status of construction for a project.

What other laws and regulations can we expect to be issued in the coming months by
Dubai Land Department and RERA? e.g. Strata law regulations
The draft Strata regulations are being considered and will clarify the status of master community declarations, owners’ associations and the management and operation of common property.

We also expect further laws and regulations from DLD/RERA concerning Real Estate Investment Portfolios, Trust Law, Granted Land and Land Development laws and regulations on the restriction on developers collecting no more than 30% of the purchase price before commencement of construction and the requirement for developers to have paid for the land and obtained title and completed 20% construction before it can sell units off-plan.

The future…

Law 9 has been much anticipated by the real estate market and it now paves the way for a swift resolution to property disputes. The Executive Regulations must ensure that a fair balance is created between the rights of the developer and the purchaser and it will be crucial that the Property Court demonstrates consistency in the application of Law 9. Recent reports in the media have indicated that approximately 520 cases have been registered with the Property Court in 2009 and we expect many more to follow. It is expected that the Property Court will also be supplemented with a mediation centre in order to reduce the number of cases.

Lovells will remain at the forefront of new developments in the real estate sector and we aim to provide you with further updates on this topic as more information is available.

About Emad Farouq
Emad is the Senior Legal Counsel at the Dubai Land Department. Previously, he spent 15 years with the UAE Federal Chamber of Commerce and Industry. Emad has played a significant role in the last 5 years in the development of property legislation and regulations in Dubai. In December 2008, Emad was awarded “Best Government In-House Counsel” by the Dubai Corporate Counsel Group.

About Mohammed Kamal
Mohammed is the Head of Real Estate for the Middle East in Lovells’ Dubai office. He has been based in the UAE for several years and has been consistently involved with some of the largest real estate deals and projects in the region. Mohammed is recommended as one of the leading real estate lawyers in the region in Who’s Who Legal.

For further assistance please contact Mohammed Kamal, Head of Real Estate-Middle East.

© Lovells 2009

Posted in Dubai | Tagged: , , | Comments Off on Questions and Answers with the Dubai Land Department

Compensation for breach of contract – How to Avoid Court? Here’s how…

Posted by 7starsdubai on April 27, 2009


source Rootsland
Over the last 10 years, Dubai has gained international attention due to its extensive growth and progress, particularly in the projects and construction sectors. During that period, deals were often done and contracts entered into quicker than if those deals were being carried out in less dynamic markets.

 It seems that commercial parties relied heavily on their ability to negotiate solutions to any dispute rather than relying too heavily on the terms of their contracts or resorting to litigation or other formal dispute resolution procedures. The same parties may have also taken comfort from the obligation on contracting parties to act in good faith imposed by the UAE’s Civil Transactions Law (the Civil Code).

 Of course the current economic climate is very different. Now financing is more difficult to obtain. This has reduced confidence that negotiation alone will resolve disputes. As companies compete for the limited credit available, contracts are being more extensively negotiated and scrutinized by all parties (including lenders). Parties are no longer relying on the market’s continued growth to push deals through or their obligation to act in good faith. The focus is shifting towards identifying what dispute resolution procedures should apply and what remedies are available if the other contracting party breaches its contractual obligations. One of the remedies receiving greater attention is the damages payable if a contracting party is in breach of a contract. Of course, the protection provided by damages will depend heavily on the offending party’s ability to pay in this market.

Time to review

 Most contracts should have provisions dealing specifically with what will happen when a breach of contract occurs. Often an overarching termination provision exists, in addition to provisions relating to curing defaults, damages and events such as force majeure or change in law, and these all play a role in determining the options available to contracting parties in a variety of circumstances.

 The current environment highlights the need for solid contractual provisions and should be taken as an opportunity for all players in the project and construction sector to regroup and focus on contracts that they have entered into and those that they are about to enter into. Everyone involved in project and construction deals should be asking themselves what they are entitled to if the contract is breached by the other party.

 

Consideration should be given to whether contracts yet to be entered into should specifically address these issues. But what if the decision is taken not to do so or an existing contract does not address damages? The Civil Code provides an entitlement to compensation for breach of contract even where the contract itself does not provide for such compensation.

Damages under UAE Law

The purpose of damages is to compensate a party for any loss suffered as a result of default by counterparty to a contract. If damages for a breach of contract are not fixed under a provision of the law or in the contract itself, the Civil Code gives the court discretion to assess compensation “in an amount equivalent to the damage in fact suffered at the time of the occurrence”. The focus here is on the actual loss suffered by a party and gives the court a broad discretion to determine an appropriate award of damages on the basis of the facts and evidence before it. However, how is the ultimate determination made and what limits are imposed on the amount of compensation that may be awarded?

Other provisions of the Civil Code that do not specifically relate to contractual damages may give some guidance as to how compensation may be assessed by a court: “In all cases the compensation shall be assessed on the basis of the amount of harm suffered by the victim, together with loss of profit, provided that it is the natural result of the harmful act”.

 The key element of this provision is that a party suffering loss will be compensated for that loss, including any loss of profit, which flows naturally from the default. The explanatory memorandum to the Civil Code says damages are payable in respect of the actual loss suffered as well as loss of expectation (that is loss of an opportunity to obtain a benefit under a contract or to avoid a loss).

 Each type of damages claimed will need to be substantiated and shown to result from the breach. Consequential (or indirect) losses will generally only be recoverable where it can be shown that the party causing the loss did so with a malicious intent. While it is important to keep in mind the award of damages is always at the court’s discretion, a specific damages regime in a contract can have the benefit of providing greater certainty as to a party’s right to contractual damages and can assist parties negotiate ways of avoiding recourse to court in this challenging environment.

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RERA Dubai – New Law for settling Property disputes

Posted by 7starsdubai on April 23, 2009


sourche Xpress4me

Full refunds will be given to investors of real estate development projects that are officially cancelled by government property regulators under a pending law, XPRESS has learnt.

Under Law No 9 of 2009, Real Estate Regulatory Agency (Rera) has stipulated that if – after a thorough government review – a project is cancelled, all cash paid by buyers will be returned by developers upon termination of contract.

Effectiveness

Law No 9, which provides a sliding scale for refunds, has been signed and approved. The law however, only becomes official and legally binding once it gets published in Dubai’s official gazette.

Pull quote

Rera will apply the law and give directions to developers on what steps to take. Mohammad Kamal, Head of Real Estate

Pull quote

Rera officials couldn’t be reached for comment by press time. The new rules amend previous laws and will frame new procedures for “terminations of sale and purchase agreements for off-plan units and will set the damages payable to the developer depending on the progress of construction”, according to Lovells law firm.

Lovells stated that if a “developer’s project is cancelled by Rera” the “purchaser shall be refunded all monies paid to date”.

The changes may help unravel months of uncertainty by investors who have faithfully continued to pay instalments to developers who failed to begin any construction on projects to which buyers legally signed contracts.

“Law 9 will provide significant guidance to the real estate market and will clarify the uncertainty on terminations and damages,” said Lovells.

Mohammad Kamal, Lovells Head of Real Estate Middle East, said the final version of the new law contains the full refund provision for cancelled projects only.

Kamal was part of a Rera working group that helped draft the new rules.

“Rera will apply the law and give directions to developers on what steps to take,” Kamal said, noting that arbitration won’t be needed because “the disputes would be settled under the law”. Compensation rate

As previously reported by XPRESS, the new law contains a sliding scale that spells out the rate of investor compensation to be paid by developers based upon the amount of construction completed.

Roughly 875 projects are now being visited by government inspectors across Dubai to determine the progress of each development.

The new law, meanwhile, dictates that all terminations “must be served through the Dubai Land Department and the purchaser shall be given 30 days to rectify a breach”.

Sliding scale

The following is the percentage of refunds as provided for in Law No 9:

  • 80 per cent completed: Buyer forfeits 100 per cent of cash he/she has paid to date
  • 60 per cent completed: Buyer forfeits 40 per cent of purchase price
  • Less than 60 per cent completed: Buyer forfeits 25 per cent of purchase price
  • Construction hasn’t started: Buyer forfeits 30 per cent of cash he/she has paid to date
  • When project is officially cancelled by Rera: Buyer shall be refunded all cash he/she has paid to date.

(Source: Lovells)

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