Help for those who help themselves
Investor protection laws are not be the best here in Dubai, but it’s no excuse for investors not being proactive when it comes to protecting their investments, thinks Eva Fernandes.
February 23, 2011 2:24 by Eva Fernandes
It has been barely a week since I wrote about how the promise of new laws to protect real estate investors is really too little too late. I argued that, post-recession, investors in the troubled Dubai property market have found themselves at the raw end of a really bad deal, because when the market went bust they discovered how little protection they had from the law. Well today, I write about the other side of the equation.
Emirates 24|7 this week carried a report about the disclosure statements developers have to send to investors. The article says that the Dubai Land Department is now instructing developers to start sending disclosure statements to all investors in projects that are under construction.
The move actually comes more than a month after the cut-off date for the implementation of the law for disclosure statements (part of the Strata law). In fact as early as September 2010, the Land Department said that developers will have to provide their investors with an extensive and detailed statement of the project when selling units in Jointly Owned Property (JOP). The law, which was to be enforced from January 13th 2011, was especially required for those investors buying off plan. If the developer was unable to provide the investor with such a statement, or if their statement was either incomplete or inaccurate, then the developer would have to pay a compensation to the investor as per the law.
Unsurprisingly (to those who know the industry), more than a month after the deadline has passed a lot of developers are still not abiding by the legislation. It will be interesting to see how they respond to the Land Department’s latest orders; in the meantime, unfortunately, a lot of investors are still not insisting on receiving disclosure statements before making payments on their purchases – or so Emirates 24|7 reports.
The reason? Apparently investors aren’t aware that the law exists. “Buyers are not asking us about any disclosure statements. We still just need the no-objection certificate from the developer to register the property with the Land Department,” one property agent told Emirates 24|7.
Arguing for better protection and more rights as investor becomes a much tougher case to push forward when basic precautionary steps aren’t being taken by the investors themselves. Investors must accept a degree of responsibility, and should try and maximize the amount of protection that is currently given (even though it may not be enough).
So if you are considering investing in a JOP in Dubai, or have done so, please do familiarize yourself with the laws here and ensure that before you sign on the dotted line or hand over more cash, your rights as an investor are being respected.