Property experts call for clarity on disputes

Property experts in Dubai are calling for more clarity in legal proceedings and quicker resolutions for real estate disputes, as a flurry of investors seek refunds and compensation from developers.

A lack of transparency and a slow rate of dispute resolution are among the biggest gripes of buyers, some of whom are reaching out for legal and technical support after experiencing delays or cancellations to the construction of their units.

“From an investor perspective, the current pace of dispute resolution really needs to be far quicker,” said Matt Green, head of research at property broker CBRE. “There remain a significant number of ongoing cases and whilst this wrangling continues it will cast a negative shadow on the market.

“The lack of clarity and transparency in the legal process is also acting as an inhibiter to future investment.”

Some investors have been critical of the role played by RERA in helping to resolve disputes, he said, in a market which has “historically been quite favourable to developers”.

Though lessons have been learnt from the downturn, investor protection needs to improve further as many buyers still complain of too much safeguarding of major developers, he added.

“Implementation of laws relating to Escrow accounts, Strata ownership and the regulation of real estate agents show that the market is moving towards maturity, but the actual implementation and enforcement of some regulations could still do with improvement.”

Scores of investors were burnt by the Dubai real estate crash which saw property prices plummet more than 60 percent and at least half of all projects cancelled or put on hold in the emirate as banks called in real estate loans.

Many buyers fled the market as the funding dried up, whilst others chose to wait in Dubai for their unfinished apartments and offices to be handed over.

Interviews with some of the less fortunate individuals show that many are still waiting for construction to begin on their projects, or at least get past basement level. This is despite payments of up to 50 percent being made, as well as promises from developers to complete the projects years earlier.

For those who choose to go to court, lawyers say the process is often long-winded and costly.

“There is a delay in dealing with property cases in the court, I have experienced these delays,” said Mohammed Kawasmi, head property for the northern emirates at law firm Al Tamimi and Co.

“We hope it will change, but up until now each hearing tends to last between 40 and 50 days.”

Real estate solicitor Brent Baldwin said the market might also benefit from a fast track resolution option, allowing investors and developers to resolve their issues more quickly.

“What I think would be useful here is a fast track resolution process maybe for cases that are under a certain amount, it would be good if there was a quick and easy process to get some sort of result,” he told Arabian Business.

“It’s not necessarily going to get you the result you want, but if there was an alternative to going through the long haul process, that would be very helpful.”

Dubai has already seen some cases of RERA or the courts acting in favour of investors this year, which experts also believe to be critical in a bid to boost speculators’ view of the market.

Earlier this month, investors in Dubai’s stalled Palm Springs project reached a deal with luxury developer Damac for a full, upfront refund on payments made for their uncompleted properties, after waiting eight years for construction to begin.

Homeowners at Nakheel’s Shoreline apartments, who have been locked in a dispute with the Palm Jumeirah developer over its plans to privatise the beach, pool and gym facilities, also won a reprieve against the company at the beginning of the year after RERA’s CEO said it had no right to deny access to communal facilities.