Developers in Dubai have grown too accustomed to leniency when it comes to delivering what they promise in their sales purchase agreements, and a proposed law set to pass in 2012 is designed to remedy that. The new Investor Protection Law states that buyers will be entitled to a full refund if developers fail to hand over property on time, or if the properties’ common amenities (pools, gyms and other contracted facilities) are not complete. Additionally, buyers will be entitled to a full refund if the sale property is 30% smaller in area than the actual net area in the contract. For more on this continue reading the following article from Property Wire.
Dubai property investors are set to get a full refund if developers default on handover under a proposed new Investor Protection Law that could be in force by the end of June 2012.
The proposal also makes it mandatory for developers to provide all promised common facilities. It means that if there are delays and failures investors will be eligible for cancellation of their contracts and get a full refund.
It also means that swimming pools, gyms or any other promised facilities will have to be ready before officially handing over the keys to the new owners.
This comes as a growing number of developers have failed to provide the facilities mentioned in their sales purchase agreements (SPAs) or marketing material. Until now, buyers did not have much recourse and could only hope that the facilities would get completed at some point in time.
Developers will also face fines if the units they promise are not delivered on time, or to agreed specifications.
A proposed provision of the draft law also says that if a unit turns out to be 30% smaller than the actual net area in the contract, the investor will have the right to cancel the contract and obtain a full refund.
In case of off plan sales, the draft proposes to make it mandatory for a developer to get all approvals from the Real Estate Regulatory Agency (RERA) and to register all saleable units with the Dubai Land Department’s online registration system.
The developer is also obliged to register all contracts with RERA and to provide all information regarding the project’s handover, escrow account, etc.
According to Sultan Bin Mejren, director general of the Dubai Land Department, the new law could be implemented by the end of June.
Following the global economic slowdown of 2008, there are still hundreds of property projects on hold in Dubai. According to the latest figures from 165 projects have been completed since the beginning of 2009, 291 projects are on hold, 291 projects are likely to be completed in due course, and 29 projects have not yet been started.
This article was republished with permission from Property Wire.