Dubai off-plan contract rules to be amended

REAL ESTATE: Contract law to be revised? (Getty Images)

The Dubai Land Department will release an amended Article 11 of Law No 13 in the next two weeks, introducing new provisions for the cancellation of contracts, a top government official has said in a report carried by the newspaper Emirates Business.

As reported in Arabian Business last month the much anticipated amendment to the Real Estate Regulatory Agency's (Rera) Article 11, Law 13, has caused some confusion in the industry.

The article states that if a buyer defaults on a sales contract, after a 30-day notice period the developer may cancel the contract and return the buyer's money minus 30%.

But some investors remain confused over whether the law applies to 30% of money paid to the developer by the date in question or 30% of the total due amount for the property

Meanwhile, Dubai Land Department's Director-General, Sultan Butti bin Mejren told Emirates Business: ''We will release an amendment to Article 11 in the coming two weeks. It is something good for the market as it is more comprehensive and detailed.''

Mejren declined to give any further details, telling the newspaper: "The revised article will set new grades for properties and developers. It will be more than the 30-70 rule, which is now applicable."

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READERS' COMMENTS

project snowdome 32 group
Posted by joan macgregor, dubai, uae on Sunday 19 April 2009 at 17:21 UAE time


If you have invested your money in the snowdome project, that should have been finish Dec 2009. I would like to get in touch

I paid my deposit in March 2006 and have paid 30% the project has not even started, dispite articiles in the news paper that they had broken ground in December 2006. 32 group have not been in touch to keep us informed about our money and when the money is going to paid back. As they have not forfilled the contract

RERA OF DUBAI AND ARRA OF AJMAN CAN SAVE ALL INVESTORS AND BUYERS
Posted by Ramesh, Dubai, UAE on Thursday 9 April 2009 at 22:06 UAE time


RERA OF DUBAI AND ARRA (AJMAN REAL ESTATE REGULATORY AUTHORITY) OF AJMAN CAN SAVE ALL INVESTORS AND BUYERS IN DUBAI AND AJMAN AFTER CONSULTING THE RULERS.
Ajman is worst because 90% of the projects are just sand and no construction has started yet, so you can imagine where Ajman stands and what kind of flood of defaulters we can see in may and june 2009.
As rents kept rising and landlords demanding high rents at each and every renewal of agreement, my friends also bought apartments in Ajman only to get more stuck in this property crash, they have invested about 50-90% of their earnings in properties in Ajman and Dubai. If RERA and ARRA announce 30-70 rule where 70% of the money paid by investor and buyers will be returned by the developer if the buyer of investor cancels the agreement then my friends will be atleast safe, by keeping this 70% of money out of the total which they have paid.My friends have lost jobs, sleep, peace and hope after loosing all their savings in Dubai and Ajman. Its upto the governments to save the expats 10-20 years savings in the gulf.

Jabel Ali ZONE4 Downtown Heights.(Emirates Residential)
Posted by Dr G Sumar, LONDON, UK on Thursday 9 April 2009 at 21:56 UAE time


The credibilty of investing in Dubai or in the GULF will depend on how serious the Government and RERA are in protecting the investors. The lifeline of the Realty Investment is foreign money. I paid 10% of a whole floor, in excess of 1.2million AED FEB 2008. The developer has not even paid for the land. He is in the UK since Jan 2009!!!!. Three projects by ERCP were launched totalling US$700. This is a shame and SCAM when the regulatory body allows this to happen without checks and balances. The sooner these fly by night developers are brought to task the better for Dubai and the entire GULF.

Developers way or the highway !
Posted by Moneer, Dubai, UAE on Thursday 9 April 2009 at 01:12 UAE time


I invested in Deyaar’s project in Downtown Jebel Ali, the project has not started yet and I have so far paid 20 % “ a significant amount considering my income” of the total property value. About 2 months ago I was informed by Deyaar that the project will be delayed and that payment schedule changed because of the delay. Last month I received a call from Deyaar informing me of a delay in the said project for about 5 years and that the option I had is to swap the money I paid to one or more projects which will be ready by the end of this year. To that I responded by asking them to offset part of my invested money in one of the other project I bought from them and pay me back the remainder, however, I was told to forget about the remainder of my investment in cash and was being forced to buy more of the projects that will be ready by the end of this year or else take the highway! Where is RERA in all this ? I even told them that I had lost my job and will never be able to commit to such thing, but no hope .


My feeling is that RERA will not do anything to protect the investors and our investment is gone .

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