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Protection at last, but too late for many

Protection at last, but too late for many

Investors in the Dubai property market aren’t legally protected half as much as they should be. You could say it is about time something was done, but is it too late?

February 15, 2011 4:02 by



“Too late” was the thought that came to mind when I read an article in Emirates 24|7 about the possible introduction of a law that would protect property investors in Dubai. Notice the use of the word ‘possible’. Because the law is still in the speculation phase, and knowing how legislation works in Dubai, it will be a considerable amount of time before I can write a piece about the way the law has been implemented.

But don’t let me get ahead of myself. The law that the article describes is one that aims to provide investors a ‘complete and comprehensive legal support’ to protect their purchase of properties in Dubai, or so says Director-General of Dubai Land Department, Sultan Butti bin Mijrin. As such the laws would allow for an investor to cancel their contract with the developer, if the developer refuses to link payments to construction milestones or if he makes material changes to specifications. In addition it promises to deal with providing the investor with a refund or replacement in the event that a developer is responsible for a delay in delivery.

Mijrin promises: “The law will provide the grounds that give the investor the right to resort to cancel the sales and purchase contract with the developer and even recover dues in full.”

Sounds long overdue, doesn’t it? But if you are anxiously hanging your hopes on the implementation of this law; I don’t mean to be callous, but don’t. According to Emirates 24|7, the law is ‘due for release this year’ which can mean anytime from tomorrow to the 31st of December. Even if I try to remain positive about this well intentioned development, I recall the difficult implementation of the strata law. The Strata Law, which was and is a welcome attempt to give joint-owners more rights for their property, was first introduced in 2007. The particulars of the law were kicked around for three years, until eventually in April 2010 owners were told they would have 6 months to register. The deadline for owners to register (October 13th) came and went without a single registration. The National reported that even a month after the supposed ‘deadline’ not a single owners association had been registered.

And even if it all went swimmingly, sadly the introduction of this law comes far too late for many.



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3 Comments

  1. Stephen Park on February 16, 2011 6:45 am

    The problem is that those who purchase with a mortgage are then told that they are not the “owner”, the bank is, and that therefore they are not eligible for any compensation and cannot cancel or seek refund of any deposits
    e.g SKYCOURTS in dubailand – completion and handover promised 2007/8
    now feb 2011 and still nothing, and developer refuses to return or refund deposits or cancel the contract, blaming force majeure for delays, and then saying it is nothing to do with “me” as i am a lessee and my mortgage bank is the legal owner anyway
    but they still ask “me” to pay for fees for handover notices (an admin charge) and snagging reports – but hang on – you just said im not the owner?!?
    it seems im the owner when they want money, but not the owner when my legal contract allows me to cancel the contract because of developer delays of more than 24mths for handover from the givern delivery date
    typical dubai, one rule for them, one for us

     
  2. abdul on February 17, 2011 7:21 am

    Imagine what some of the people who invested their life time savings and then they are chased by the developers and the banks for payments for properties which are delayed and not at all ready. What kind of life they and their family members are having since the property market crashed. Real unfortunate ones for no fault of theirs, they invested and lost everything they had, and to add to all this pains and losses , they are chased like animals by hunters. I hope the law is very strong and protects the buyers and investors We would like to thank the government for releasing this news and also the law soon.

     
  3. ramesh on February 17, 2011 10:50 am

    Thousand’s of low income families invested their children’s savings and life time savings in Dubai, Ajman and Ras-khaimah properties , and lost everything. They have lost their peace, reputation, credibility (by taking loans from relatives and friends) and most important their health also in many cases. Prices went 60% down and developers are saying either you pay the agreed price (2008 price) or be prepared to lose whatever you have paid or we will put legal cases on you and put you in jails by going to the courts. People paid Dhs 380000 for a studio which is still not ready in Ajman and today Dhs 180000 is read studio flat in International city. No one can continue investing in a project, which when finished will return you less than 50% of your investment. It is a hard choice, and people everywhere around the globe, don’t know how to come out of all this and what to do next and Therefore, I think it is time UAE government has planned to intervene and come up with a viable alternative. Its a very touching gesture by the government and we are highly thankful to them for their kind support during this very tough times. All our prayers are for them to Almighty God. Thank you a million times for the news.

     

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