By Andy Sambidge
UPDATE 1: Group formed by Dubai Land Dep't to offer home owners legal option.
Dubai Land Department on Monday announced a new initiative to introduce a free legal service to support home owners involved in real estate-related court cases.
The announcement follows a meeting between senior Land Department officials and representatives of law firms to finalise details of the move.
The Land Department said an agreement had been signed which would see the law firms become part of a new Legal Care Group.
The group will bring together senior lawyers, professional firms and consultants to offer free legal assistance to members of the public with "genuine real estate issues" who might otherwise be dissuaded from taking action because of the prohibitive cost of fees, the Land Department said in a statement.
Mohammed Sultan Thani, assistant director general of the Dubai Land Department, said: "The objective of this initiative is not merely to meet a need but to ensure fairness and justice is available to anyone who might have a concern which involves property, no matter their circumstances.
"This reflects the government's commitment to ensuring there is in place a comprehensive equitable system of legalizing ownership and property transactions."
He added: "Now, no one is prevented from pursuing their rights merely because of the possibility they might be priced out of the legal system."
Richard Green, head of research at CB Richard Ellis Middle East, said: "The offer of free legal advice is another step in the right direction. Overall confidence in the legal dispute system has been somewhat low due to a time lag in addressing the current case backlog.
"This announcement will go some way to renewing faith in the system as well as providing confidence to individual investors facing financial difficulties in their disputes against developers.
"Overall this is seen as another positive advancement for the Dubai market."
In August it was reported that property dispute cases that were originally submitted to the Real Estate Regulatory Agency (Rera) and Dubai Courts are now being dealt with by Dubai’s new Property Court.
The new court, which started operations in October, was set up under the First Instance Court to deal exclusively with property-related cases.
I have the same problem with CBS fake real estate company, & i need to add my case to the other ones already in court, whom should i contact, Please help.
But as always the question is : Whom shall all the victims contact - for getting this service ? Dubai Land Department or RERA Dubai ? Is this service also available for off-plan property victims ?
This seems to be a well intended approach however the advice to most of them will be as follows: 1. You purchased a property as an unsecured creditor of the developer. You should have been aware of the risks. 2. Your developer has stopped building. 3. Your developer has used monies paid into escrow to make land payments which was allowed until recently or initial infrastrcuture payments. 4. There is no money left in escrow to pay you back. 5. The developer want to say that you have breached so he can keep your money (which he doesnt have as he has paid it as a land payment to the Master Developer). 6. You want to say the developer has breached as he is not building. 7. The Master Developer does not want to get involved. If they cancel then anyone who has been paying will have to be paid back and the money is simply not there. 8. Only the court can decide whether your unwillingness to pay (as your property has halved in value) or your developer unwillingness to build (due to defaulting buyers / unsold stock) is the reason why the predicament remains. Most buyers do not deserve free advice - the risks are clear but they chose to ignore them. Technically speaking, most have not lost anything by a developers failure to build. Consider this - you have paid 30% or less for a property you agreed to buy in 2007/2008 and your developer has done nothing - what is your loss?. I would say that it is zero as you could go into the market and purchase a similar property for more than 30% less that you agreed to pay in the boom. So what have you lost. Nothing. Most people have paid 10-30% and the market has gone down by more than this. If your developer proceeded you would be handed over a property worth less. The problem is that most people want their money back because they did bad deals and agreed to buy property that they could not afford and had not arranged finance in advance - they hoped to flip before the next payment was due. If everyone kept paying the developers would build.
While the common-sense approach by Dubya seems to be pretty fair, I oppose it for one simple reason. In my contract which was signed before RERA became involved to take the developer, it clearly states that there is a cancellation fee of 10% which was my amount to lose. Thus, my paying of up to 30% leads me to conclude that I deserve 20% back. RERA cannot change a contract that precedes its new default structure. Otherwise, that makes any contract signed in Dubai worthless.
Siwash - If your contract allows you the right to terminate, then that's agreed. If you are entitled to serve notice and claim all of your money back other than 10% then my view is that the courts would uphold that. Nothing in the law changes your position. However, most contracts do not contain such a right - they contain similar rights about retention of the price where the developer terminates. They do not include an option on the buyer to terminate. In circumstances where the developer terminates, the law has a sliding scale.
Great plan. Overlooks the minor issue that litigation is FAR more expensive than legal advice. So even if the advice was to tell you have a cast iron case against the developer, what then? You're taking free advice because you cannot afford to pay - so you certainly cannot afford litigation. Without free legal aid to litigate, this move is utterly pointless other than to shut people up by having a suitably qualified expert tell them they have no case whatsoever.
Hi Dubya Can you let us know the Low college you did you exam in Low. do not try to interpret a law when their is no low in place Transparency has been always a ? in Dubai Property deals its only one way consumer have only God to turn to. look like you are trying to cover up developers let it be master or minor. How can RERA change contains of agreement with a new Low. when the agreement was executed RERA was not even born. How dare you say its Ok to loose 30% with or with out finance plan.
I completely disagree with Dubya which seem to legitimatise breaches from developers who can hold back 30% of the money. I think this kind of approach to give free legal advice has other reasons then wanting to help investors. The facts are fairly clear as mounting impatience could have devastating and long lasting consequences on Dubai as a Brand. The only reasons I see behind it are:1) to gain further time 2) to avoid that groups of investors get together and appeal to international law firms, who could easily put pressure involving the media. I don't know how many people tried to get answers from Rera and its legal department, but I can assure you more than 95% gave up.
all i was saying in is that most people havent actually lost anything due to the fall in prices - they would be in a worse position is the developer built as they would have to pay more than the property is worth by a huge margin.
As a property lawyer myself who has purchased property in Dubai myself, I am only too aware of what my contract says and that I have the right to terminate my contract and obtain a refund of the money I have paid. Despite what my contract states however, the developer in question has simply refused to refund my money. Providing free legal advice as to what people's rights are is of no use if they have no financially viable, equitable means of enforcing these rights.