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The new Dubai property registration law real estate investors and developers

PHOTO BY ARCHIVE


New Dubai property registration law: all you need to know

 

DUBAI – The Dubai ruler on Saturday (November 11) issued an amendment to the law on interim property registration in Dubai.

The new law specifies policies and procedures  related to property sale contracts and is meant to “protect real estate investors and developers”, the government said in a statement.

Here are the key points:

In case the buyer breaches the sale contract

What is the next step?

The developer must notify the Dubai Land Department (DLD). Once the notification is received, the DLD must give a 30-day notice to the purchaser.

What kind of notice is required?

The notice must be dated and given in writing, and delivered to the purchaser directly by registered mail, electronic mail or any other method specified by the DLD

What if the developer and buyer reach a settlement?

The terms of settlement must be added to the sale contract and signed by both parties.

What if the buyer fails to fulfill the contract or accept a settlement?

The DLD may issue an official document stating that the developer has fulfilled his legal obligations, specifying the percentage of completion of the property.

What is the next step?

After the developer receives this document from the DLD, the developer is free to take any of the following actions:

If the percentage of completion is over 80 per cent, the developer can ask the purchaser to abide by the terms of the sale contract, confiscate the paid amounts and obligate the buyer to make the remainder of the payment specified in the contract or otherwise request the DLD to auction the property to collect the remaining amount.

The buyer is also obligated to pay any expenses arising from the auction.

The developer may also void the sale contract solely, retain up to 40 per cent of the sale contract’s value and return the remaining amount to the buyer within a year of the date of contract cancellation or within 60 days of the date of re-selling the property, whichever is earlier.

If the percentage of completion is between 60 per cent and 80 per cent, the developer may void the sale contract solely, retain not more than 40 per cent of the sale contract’s value and return the remaining amount to the purchaser within a year of the date of contract cancellation or within 60 days of the date of re-selling the property, whichever is earlier.

If the percentage of completion is less than 60 per cent, the developer may void the sale contract solely, retain upto 25 per cent of the sale contract’s value and return the remaining amount to the buyer within one year of the date of contract cancellation or within 60 days of the date of re-selling the property, whichever is earlier.

What if the developer did not start construction work on the property?

If the developer did not initiate the work in the property for reasons beyond his control and without negligence, the developer may void the sale contract solely, deduct not more than 30 per cent of the paid money and return the remaining amount to the purchaser within 60 days of the date of re-selling the property, whichever is earlier.

What if the Real Estate Regulatory Authority cancelled the project?

The developer must refund all payments made by the buyer, pursuant to the law concerning Escrow Accounts for Real Estate Development in Dubai.

Is the new law applicable to land sales contracts?

No. Such a sale remains subject to provisions stated in the sale contract.

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