Would you like some investor protection with that? … PSYCH!
The new 20 percent real estate development requirement is something of a double-edged sword—and the past three years has taught us enough to know which side the law benefits when the shit hits the fan.
April 1, 2012 4:17 by Eva Fernandes
Kipp’s been accused of being a bit of a whiner. We remember that foggy evening last winter when one of our readers rather candidly remarked: “Boy, you guys sure know how to complain.” Of course, there is a smidgen of truth in the matter—we are a little hard to please—but given the kind of stories we have to write, can you really blame us?
Take for instance, the proposed new law intended to ‘protect’ property investors in Dubai. Set to be enforced in the middle of 2012, the new law will ban developers from selling property to investors unless 20 percent of the property is completed.
Sultan bin Mujrin, director of the Department of Land and Property in Dubai told Alittihad: “The Department conducted a thorough study on the local property market and found that the existing legislations provide protection only to developers while there is not such protection to investors.” (Right, because you needed a ‘thorough study’ to find that out).
…“The new law will ensure protection for property investors and regulate the relationship between them and the developers in all stages of the projects….we expect the law to be enforced at the end of June.“This law will achieve the required balance between the interests and rights of investors and developers in the local market…it will cover the whole process starting from planning for the project and ending in construction and delivery.”
Now of course, for the past three years Kipp’s screamed ourselves hoarse about the very dire need for investor protection; so we will be the first to welcome this new proposed legislation.
On the other hand-merely ensuring the completion of 20 percent of the project before sales doesn’t quite qualify as protection. In fact, many investors have found themselves stuck between a rock and a hard place, because they have paid for 50 percent of a stalled project. Investors can do little to get out of a tricky situation like that and part of this reason is a genuine lack of protection in the legislation.
All of which makes us believe that this new 20 percent requirement is something of a double-edged sword—and the past three years has taught us enough to know which side the law benefits when the shit hits the fan.