EXCLUSIVE: Investors should use force majeure to withhold payments – RERA

"If a developer can use it, why can't I?" - Bin Ghalaita
(ITP Images)
By Damian Reilly
Wed 08 Dec 2010 11:42 AM

Investors in construction projects in Dubai in which developers are blaming delays on force majeure (an act of God) should withhold payments for the same reason, Marwan bin Ghalaita, CEO of Dubai real estate watchdog RERA, has said.

He added Dubai’s real estate sector was a lawyers’ market.

Asked if recession could be considered a force majeure, Bin Ghalaita said: “If I am an investor I will say ‘I am not paying because of force majeure’. I am not a judge. But my answer is: if I am an investor I will not pay because of force majeure. If they can use it, so can I. And this is my answer. If a developer can use it, why can’t I?”

He added that investors in projects that had been delayed beyond delivery deadlines could seek legal redress in the courts for loss of income:

“If my construction is delayed, and it is beyond my delivery date, what should I do? You have a choice to ask for liquidity damage…. I am suffering because of the delay, because I bought this apartment to move in, and now I am paying rent. You can go to a court and ask for that, for compensation. Because this is a breach of the contract.

“Because the delivery date is there…. And people should seek proper legal advice from lawyers. It was a buying market, then a selling market, then an agents’ market, then I tell people there is a period in Dubai where it is a lawyers’ market. Where lawyers make a lot of money.”

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