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PLEASE NOTE: If the project is canceled by Rera’s decision, the developer will have to refund all monies paid by the purchaser
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question: I plan to invest in an off-plan property in Dubai. What happens if the developer fails to deliver the property? What rights do I have in this regard?
reply: In Dubai, any off-the-plan property sold by a developer needs to be registered on a temporary real estate register maintained by the Dubai Land Department (DLD). This complies with Section 3(1) of the Dubai Temporary Immovable Property Registration Regulations.
Furthermore, Article 4, Paragraph 1, of Dubai’s Regulations on Temporary Real Estate Registration states: “A master developer or a secondary developer shall not commence implementation of a project or sell its off-plan units unless it occupies land on which the project is to be constructed and obtains the necessary approval from the competent entity in the emirate. .
“In any event, the DLD must create an entry on the real property’s register to indicate that it is being developed.”
Once you find a suitable property, you can check to see if the developer of the property has registered the project with the DLD, as per the above mentioned laws. Before the developer obtains the relevant approval from the Ministry of Land Development, he is not allowed to sign a sales contract with the purchaser. As stated in Article 10 of the Dubai Temporary Real Estate Registration Regulations.
If the developer fails to deliver the property you purchased in accordance with the terms of the sale and purchase agreement (SPA), you can demand that it fulfill its obligations. If the developer does not comply, you can contact the DLD and file a complaint.
DLD may attempt to resolve the issue amicably between you and the developer. This is in line with Clause 14 of Executive Council Resolution No. 6 of 2010, which states: “In the event of any dispute between the developer and the purchaser, the DLD may undertake mediation efforts to preserve their contractual relationship and may propose any settlement it deems fit. To achieve this.If the developer and the purchaser reach an amicable settlement, this settlement shall be recorded in a written agreement signed by the developer and the purchaser or their respective representatives.After the DLD approves the agreement, it will be binding on both parties force.”
The Dubai Real Estate Regulatory Authority (Rera) can also cancel a project on technical grounds if the developer does not meet the conditions – such as failing to start construction work without justification; if the authorities are convinced that the developer has no real intention (in good faith) to continue the project ; The developer fails to implement the project due to major negligence and other reasons. This is in accordance with Article 23 of Executive Committee Resolution No. 6 of 2010.
Furthermore, if the project is canceled due to Rera’s decision, the developer is required to refund all monies paid by the purchaser. This is in line with Section 11(b) of Dubai’s Temporary Immovable Property Registration Regulations as amended in 2017.
If the developer does not refund the payment, Rera may take all necessary measures to safeguard your rights as a purchaser. This is in accordance with Article 27 of Executive Committee Resolution No. 6 of 2010 which states: “If the developer fails to refund the money owed to the buyer within the period specified in Article 26 of this Resolution (60 days), Rera must take all necessary actions to maintain purchaser’s rights, including referring the matter to the competent judicial authorities.”
As a purchaser, you can also seek termination of the SPA from the competent courts in Dubai. This is in accordance with Article 20 of Executive Committee Resolution No. 6 of 2010. However, the developer may be granted protection under Article 21 of Executive Committee Resolution No. 6 of 2010 if due to reasons beyond the handover of the property due to reasons beyond its control (force majeure), such as the authorities taking over the property in the public interest; Suspension of the project for purposes such as re-planning.
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