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What you can do if your property project is on hold

What you can do if your property project is on hold

According to a recent report, 243 real estate developments in Dubai have either stalled or been cancelled. Here are six courses of action if it happens to you.

March 8, 2010 3:09 by



3. Swap properties with the developer

While some developers are still not being transparent about their projects, others have offered their investors so-called swaps, i.e. completed properties in exchange for stalled developments. And analysts say that investors should just grab the opportunity.

“A lot of developers are now offering swaps to the people that have bought in projects that are clearly not going to happen,” Craig Plumb, the head of Research at Jones Lang LaSalle told Kipp at the sidelines of a conference last month. “Take your money out and put in into projects that have been built,” he said, adding that it is important to turn your investment into an income-generating asset.

However, you have to be careful; in January this year, Dubai’s Real Estate Regulatory Agency (RERA) warned that some schemes offering property swaps between Dubai and the US were unauthorized.

“Any marketing campaign involving Dubai real estate requires the prior approval of the RERA, as stipulated by Law No. 16. We have not received any request for such approvals from firms offering to exchange properties in Dubai for properties in the US,” Marwan bin Ghalita, RERA chief executive, told Emirates Business. “None of the ordinary safeguards are applicable [in such deals], or recourse to the protection offered by the law, by RERA or by the Land Department,” he added.

4. Team up with your developer

If you don’t want to go the legal way or get stuck with a house you don’t like, you could just team up with your developer, a solution that is proving more and more popular in Dubai. Earlier this month, The National newspaper reported that a group of investors from Park Towers in Dubailand struck a deal with their developer to co-own the land.

“We think this is a good model for Dubai,” Rakesh Wifi, an investor in the project told the paper. “The developer could have forfeited our money under the law. But he has decided to make us partners. When the market recovers, we can decide to sell our land or put more money in to build it.”

And this option will not lead to any legal difficulties, according to Rera. “If this is the preferred option and there is full agreement between all parties the formal agreement should be registered with the legal section and a full financial audit carried out as the next necessary step in order to move to finalise the arrangement,” Rera’s CEO Marwan bin Ghalita, told the paper.



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3 Comments

  1. the real truth on March 8, 2010 8:20 pm

    One of the biggest scandals of all time is RERA themselves NOT canceling projects that clearly arent viable, even when the developer itself understands the project is not viable and all Investors agree it is not viable, yet they refuse to cancel and continue to show on their state of the art progress indicator that the project is continuing to progress!! Yes real big leaps have been made…with what they want you to believe at any rate!!

     
  2. neeta on March 15, 2010 11:57 am

    All the above options are being spoken about but honestly there is nothing concrete . The projects will not be cancelled since no developer wants to offically accept that he has not done his job and even started digging . One clear example is ACI , i have seen so many complaints on websites about this company that i am surprised RERA is not doing anything . I think if RERA and dubai govt needs to clear the mess all projects which havent even started and get the money back to the actual owners . The escrow accounts have details of our investments but equally the owners have spent part of it for management fees and land deals can RERA not clear all this and state that if the project is not moving and we as investors will provide proof they will cancel the licence of the developer . Someone has to get up and help everyone to move . Few of us cannot run this race and bring everyone to task .

     
  3. shabnam on March 23, 2010 9:26 am

    our project has been oficially cancelled by rera on jan/2010 . for the last 3 moths rera is not responding to any of investors in their legal department they just direct every one to dubai court.
    in dubai court also they dont take any action till you pay the court fee. so THERE IS NO HELP NO WHERE IN DUBAI. unfortunately we are all losers by investing in dubai , we are all neglected !!!!!!!!!!!!!
    there is no free legal advise+ there is no support from property court, if you dont bileve please go ahead and check.

     

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